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]

PART I - FINANCIAL INFORMATION [Item 1. Unaudited Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) Presents OneSpaWorld's unaudited Q1 2025 condensed consolidated financial statements, including balance sheets, operations, comprehensive income, equity, cash flows, and notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------ | :-------------------- | | Cash and cash equivalents | $22,605 | $57,439 | $(34,834) | | Total current assets | $129,439 | $161,505 | $(32,066) | | Intangible assets, net | $525,899 | $530,032 | $(4,133) | | Total assets | $708,715 | $746,423 | $(37,708) | | Total current liabilities | $74,668 | $79,405 | $(4,737) | | Long-term debt, net | $92,376 | $93,557 | $(1,181) | | Total liabilities | $178,151 | $191,926 | $(13,775) | | Total shareholders' equity | $530,564 | $554,497 | $(23,933) | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | YoY Change (%) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------------- | | Service revenues | $178,519 | $172,209 | $6,310 | 3.66% | | Product revenues | $41,111 | $39,017 | $2,094 | 5.37% | | Total revenues | $219,630 | $211,226 | $8,404 | 3.98% | | Income from operations | $16,837 | $16,977 | $(140) | -0.82% | | Interest expense, net | $(1,147) | $(2,955) | $1,808 | -61.18% | | Change in fair value of warrant liabilities | $0 | $7,723 | $(7,723) | -100.00% | | Net income | $15,271 | $21,166 | $(5,895) | -27.85% | | Basic EPS | $0.15 | $0.21 | $(0.06) | -28.57% | | Diluted EPS | $0.15 | $0.21 | $(0.06) | -28.57% | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Net Income | $15,271 | $21,166 | $(5,895) | | Foreign currency translation adjustments | $111 | $(38) | $149 | | Net unrealized (loss) gain on derivative | $(559) | $267 | $(826) | | Amount realized and reclassified into earnings | $(228) | $(947) | $719 | | Total other comprehensive loss, net of tax | $(676) | $(718) | $42 | | Total comprehensive income | $14,595 | $20,448 | $(5,853) | [Condensed Consolidated Statements of Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Balance, December 31 | $554,497 | $434,069 | | Net income | $15,271 | $21,166 | | Stock-based compensation | $3,560 | $2,094 | | Repurchase and retirement of common shares | $(37,901) | $(7,736) | | Dividends | $(4,187) | $0 | | Exercise of Sponsor and Public Warrants | $0 | $57,628 | | Balance, March 31 | $530,564 | $515,536 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Net cash provided by operating activities | $10,107 | $14,954 | $(4,847) | | Net cash used in investing activities | $(1,697) | $(1,206) | $(491) | | Net cash (used in) provided by financing activities | $(43,347) | $23,962 | $(67,309) | | Net (decrease) increase in cash and cash equivalents and restricted cash | $(34,834) | $37,686 | $(72,520) | | Cash and cash equivalents and restricted cash, End of period | $23,803 | $66,588 | $(42,785) | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes provide context for financial statements, covering business, accounting policies, intangible assets, debt, equity, stock-based compensation, revenue recognition, and other financial instruments - OneSpaWorld is a global provider of health, wellness, fitness, and beauty services and products on cruise ships and in land-based destination resorts, with its predominant business based on cruise ship and resort operations[25](index=25&type=chunk) - The company's net intangible assets were **$525.9 million** as of March 31, 2025, primarily consisting of retail concession agreements, with amortization expense of **$4.1 million** for the quarter[36](index=36&type=chunk) - Long-term debt, net, decreased slightly to **$92.4 million** as of March 31, 2025, following a new credit agreement in September 2024 including a **$100 million** term loan and a **$50 million** undrawn revolving facility, with quarterly amortization payments of **1.25%** on the term loan[37](index=37&type=chunk)[38](index=38&type=chunk)[41](index=41&type=chunk) - A quarterly dividend of **$0.04 per share** was paid on March 26, 2025, and the company repurchased **2,094,498 common shares** for **$37.9 million** during Q1 2025, approving a new **$75.0 million** share repurchase program on April 30, 2025[45](index=45&type=chunk)[47](index=47&type=chunk)[77](index=77&type=chunk) - Stock-based compensation expense increased to **$3.6 million** in Q1 2025 from **$2.1 million** in Q1 2024, primarily due to **$1.4 million** in incremental expense from accelerated vesting related to an executive departure[48](index=48&type=chunk)[49](index=49&type=chunk) - The company uses interest rate swap agreements with a notional amount of **$98.7 million** to hedge its exposure to changes in cash flows from its variable rate Term Loan Facility, designated as cash flow hedges[69](index=69&type=chunk) - Income tax expense decreased to **$0.4 million** in Q1 2025 from **$0.6 million** in Q1 2024, driven by a lower effective tax rate due to higher earnings in foreign jurisdictions and lower earnings in the U.S[73](index=73&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operating results for Q1 2025, highlighting key performance indicators, revenue drivers, liquidity, and future performance factors [Overview](index=27&type=section&id=Overview) - OneSpaWorld is the leading global operator of health and wellness centers on cruise ships and a significant operator at destination resorts, holding an **18x market share advantage** over its closest maritime competitor[80](index=80&type=chunk) - The company's competitive advantage stems from its extensive global infrastructure, deep staff expertise, broad service offerings, and robust recruitment, training, and logistics platforms[81](index=81&type=chunk) [Key Performance Indicators](index=27&type=section&id=Key%20

Financial Data and Key Metrics Changes - Total revenues increased by 4% to $219.6 million compared to $211.2 million in Q1 2024 [7][14] - Income from operations was $16.8 million, including $2.5 million of nonrecurring severance expense, compared to $17 million in Q1 2024 [7][14] - Adjusted EBITDA rose by 5% to $26.6 million, which included $1.1 million of nonrecurring cash severance expense, compared to $25.3 million in Q1 2024 [8][16] - Net income was $15.3 million or $0.15 per diluted share, down from $21.2 million or $0.21 per diluted share in Q1 2024 [15][16] Business Line Data and Key Metrics Changes - Health and wellness centers operated on 199 ships, with an average ship count of 193 for the quarter, compared to 193 ships and an average of 188 ships in Q1 2024 [8][14] - Revenue per passenger per day, weekly revenue, and revenue per staff per day showed growth, driven by staff retention and enhanced sales training [11] Market Data and Key Metrics Changes - Prebooking revenue as a percentage of total revenues remained strong at 23% [12] - Increased prebooking revenues contributed $2.3 million to overall revenue growth [14] Company Strategy and Development Direction - The company aims to invest in cruise line and destination resort partnerships, innovate guest experiences, and enhance productivity [5][7] - New health and wellness centers were introduced on Norwegian Cruise Line's first PRIMA plus class ship, with plans for additional centers on eight new ships [9] - A new $75 million share repurchase program was approved, extending a previous $50 million program, reflecting a commitment to enhance shareholder value [12][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the dynamic economic environment and reaffirmed annual guidance [6][7] - Strong bookings and onboard spending from cruise line partners were noted, with consumers prioritizing experiences [7][20] - The company expects high single-digit revenue and adjusted EBITDA growth rates for fiscal 2025 compared to fiscal 2024 [20] Other Important Information - The company reported a strong balance sheet with total cash of $23.8 million after share repurchases and dividend payments [17] - The majority of operations are not impacted by tariffs, as products for cruise ships are held in a free trade zone [19] Q&A Session Summary Question: Understanding spend patterns on board - Management noted that there has been no significant increase in discounting and that spending continues to increase, with high demand for high-end services [25][26] Question: Full year guidance sensitivity - The low end of the guidance range assumes a moderation in spending on board, but there are no indicators suggesting a significant deterioration in spending [28][30] Question: Prebooking trends and cruise lines' willingness to invest - Prebooking remains stable at 23%, with no significant pullback from cruise lines in investing to reduce friction in prebooking engines [35][36] Question: MediSpa performance and potential slowdown - Demand for MediSpa services remains strong, with no early signs of deterioration even in high-end services [45][46] Question: Buyback sensitivity to business softening - The decision to buy back shares is based on stock value rather than business performance, indicating continued buybacks even if business softens [54][55] Question: Impact of tariffs on spending behavior - No changes in spending activity were observed immediately after tariffs were announced, as consumers continued to spend while on vacation [58][60]

Financial Data and Key Metrics Changes - Total revenues increased by 4% to $219.6 million compared to $211.2 million in Q1 2024 [6][14] - Income from operations was $16.8 million, including $2.5 million of nonrecurring severance expense, compared to $17 million in Q1 2024 [6][14] - Adjusted EBITDA rose by 5% to $26.6 million, which included $1.1 million of nonrecurring cash severance expense, compared to $25.3 million in Q1 2024 [7][16] - Net income was $15.3 million or $0.15 per diluted share, down from $21.2 million or $0.21 per diluted share in Q1 2024 [15][16] - Adjusted net income was $22.6 million or $0.22 per diluted share, compared to $19.3 million or $0.19 per diluted share in Q1 2024 [16] Business Line Data and Key Metrics Changes - Health and wellness centers operated on 199 ships, with an average ship count of 193 for the quarter, compared to 188 ships in Q1 2024 [7][10] - Sales productivity increased due to the introduction of higher value services such as MediSpa, IV therapy, and acupuncture [9][10] - Revenue per passenger per day, weekly revenue, and revenue per staff per day showed growth driven by staff retention and enhanced sales training [10] Market Data and Key Metrics Changes - Cruise line partners experienced strong bookings and onboard spending, with consumers prioritizing cruising as a value alternative [6][8] - Prebooking revenue as a percentage of total revenues remained strong at 23% [10][11] Company Strategy and Development Direction - The company aims to invest in cruise line and destination resort partnerships, innovate guest experiences, and enhance productivity [5][6] - New health and wellness centers were introduced on Norwegian Cruise Line's first PRIMA plus class ship, with plans for additional centers on eight new ships [8][10] - A new $75 million share repurchase program was approved, extending a previous $50 million program, reflecting the company's commitment to enhancing shareholder value [11][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the dynamic economic environment and reaffirmed annual guidance [6][19] - The company expects high single-digit revenue and adjusted EBITDA growth rates for fiscal 2025 compared to fiscal 2024 [19][20] - Positive trends were noted at the start of Q2, with expectations for continued strong performance [12][20] Other Important Information - The company maintained a strong balance sheet with total cash of $23.8 million after share repurchases and dividend payments [17] - Total debt net of deferred financing costs was $97.4 million, down from $98.6 million at the end of 2024 [17] Q&A Session Summary Question: Understanding spend patterns on board - Management noted that there has not been a significant increase in discounting, and spending continues to increase, with high demand for high-end services [24][25] Question: Full year guidance sensitivity - The low end of the guidance range assumes a moderation in spending on board, but no significant deterioration is currently anticipated [27][29] Question: Pre-booking trends - Pre-booking remains stable at 23%, with no significant pullback from cruise lines in investing to reduce friction in pre-booking engines [33][35] Question: MediSpa performance and potential slowdown - Demand for MediSpa services remains strong, with no early signs of deterioration observed [44][45] Question: Impact of tariffs on spending - No changes in spending activity were noted immediately following tariff announcements, as consumers continued to spend while on board [56][60]

Company Performance - OneSpaWorld (OSW) reported quarterly earnings of $0.22 per share, exceeding the Zacks Consensus Estimate of $0.21 per share, and up from $0.19 per share a year ago, representing an earnings surprise of 4.76% [1] - The company posted revenues of $219.63 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.18%, and compared to revenues of $211.23 million in the same quarter last year [2] - Over the last four quarters, OneSpaWorld has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Outlook - OneSpaWorld shares have declined approximately 11.4% since the beginning of the year, while the S&P 500 has decreased by 5.5% [3] - The current consensus EPS estimate for the upcoming quarter is $0.22 on revenues of $236.44 million, and for the current fiscal year, it is $0.94 on revenues of $952.15 million [7] Industry Context - The Leisure and Recreation Services industry, to which OneSpaWorld belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact OneSpaWorld's stock performance [5]