Financial Performance - Total revenues for Q1 2025 were $219.6 million, a 4% increase from $211.2 million in Q1 2024[6] - Net income for Q1 2025 was $15.3 million, down from $21.2 million in Q1 2024, primarily due to a $7.7 million benefit from fair value changes in warrant liabilities in the prior year[6] - Adjusted EBITDA increased by 5% to $26.6 million compared to $25.3 million in Q1 2024[6] - Service revenues increased by 4% to $178,519, while product revenues rose by 5% to $41,111 compared to the same period last year[25] - Net income decreased by 28% to $15,271 from $21,166 in Q1 2024, with net income per share at $0.15[25][34] - Adjusted net income for Q1 2025 was $22,592, up from $19,298 in Q1 2024, resulting in adjusted net income per diluted share of $0.22[34] - Adjusted EBITDA for Q1 2025 was $26,576, compared to $25,280 in Q1 2024, reflecting a year-over-year increase[35] Future Projections - The company expects Q2 2025 total revenues to be between $235 million and $240 million, and adjusted EBITDA to be between $28 million and $30 million[17] - The company anticipates high-single digit growth in total revenues and adjusted EBITDA for fiscal 2025[3] - The company forecasts a period-end ship count of 200 and an average ship count of 192 for Q2 2025[25] Shareholder Returns - The board declared a quarterly dividend of $0.04 per share and authorized a new $75 million share repurchase program[2] - The company repurchased 2.1 million shares for $37.9 million during Q1 2025, with a total of 2.8 million shares repurchased for $49.1 million since the program's initiation[15] Operational Metrics - The average ship count for Q1 2025 was 193, consistent with the previous year, while the company operates health and wellness centers on 199 ships[5] - The company operates 50 destination resort health and wellness centers, down from 51 in Q1 2024[10] - Average weekly revenue per ship increased to $84,177, up from $81,708 in the previous year[26] - Average revenue per shipboard staff per day rose to $562, compared to $549 in Q1 2024[26] - Capital expenditures for Q1 2025 were $1,697, an increase from $1,206 in Q1 2024[26] - The period-end resort count remained stable at 50, with an average resort count also at 50 for the forecasted year[25]

Core Viewpoint - OneSpaWorld Holdings Limited (OSW) is positioned for growth due to new ship additions, strong service demand, and strategic partnerships, while facing concerns over fluctuations in fuel and commodity prices [1][6]. Growth Drivers - The company is benefiting from expanding cruise line partnerships, robust demand for wellness services, a diversified service portfolio, and disciplined execution [2]. - OneSpaWorld's fleet presence has increased to 199 ships by the end of 2024, up from 193 the previous year, with further expansion planned for fiscal 2025, showcasing operational agility and scalability [3]. - Strong demand for premium wellness services such as Medi-Spa, IV therapy, cryotherapy, and LED facial treatments has led to a 30% year-over-year increase in same-spa revenues during Q4 2024 [4]. Competitive Advantages - A data-driven approach enhances the guest experience, with customers who prebook services spending over 30% more than those who do not, and prebooked revenues accounting for 22% of total services [5]. - The company expects continued momentum in fiscal 2025, supported by new ship additions and strong service demand, while focusing on wellness innovation and operational efficiency [6]. Concerns - OneSpaWorld's operations are vulnerable to fluctuations in fuel and commodity prices, which can significantly impact its cost structure and financial performance [7][10]. - Rising fuel prices can increase transportation costs for shipboard employees and shipping products, potentially affecting consumer travel expenses and discretionary spending on wellness services [9][10].

Group 1: OneSpaWorld (OSW) - OneSpaWorld shares increased by 17.6% to close at $17.64, following a 13.5% loss over the past four weeks, indicating a significant recovery in investor sentiment [1] - The surge in OneSpaWorld's stock price was attributed to President Trump's announcement to suspend U.S. tariffs on most countries for 90 days, which renewed investor optimism [1] - The company is expected to report quarterly earnings of $0.21 per share, reflecting a year-over-year increase of 10.5%, with revenues projected at $219.23 million, up 3.8% from the previous year [2] Group 2: Earnings Estimates and Trends - The consensus EPS estimate for OneSpaWorld has been revised 4.7% lower over the last 30 days, which typically does not correlate with price appreciation [3] - Despite the recent stock price increase, the negative trend in earnings estimate revisions suggests caution for future price movements [3] - OneSpaWorld is ranked 3 (Hold) by Zacks, indicating a neutral outlook compared to other stocks in the same industry [3] Group 3: Industry Comparison - OneSpaWorld operates within the Zacks Leisure and Recreation Services industry, which includes other companies like Xponential Fitness [3] - Xponential Fitness experienced a significant decline of 37.9% over the past month, closing at $7.75, while its EPS estimate has been revised down by 56.9% to $0.15, representing a 6.3% decrease from the previous year [4] - Xponential Fitness currently holds a Zacks Rank of 5 (Strong Sell), contrasting with OneSpaWorld's neutral position [4]

Core Insights - The investment approach focuses on fundamental analysis, emphasizing companies with a strong competitive moat, consistent growth in free cash flow, and robust financial performance [1] - The philosophy is rooted in long-term investing, avoiding short-term trading tactics and options, which is believed to unlock value over time [1] - The aim is to provide insightful, actionable advice by uncovering undervalued stocks poised for growth and identifying overvalued stocks to be cautious of [1] Company and Industry Analysis - The analyst has a background in business and economics, providing a solid foundation for investment analysis [1] - The current role is within a local brokerage firm, contributing to the investment community through articles that offer deep analytical insights [1] - The writing for Seeking Alpha is seen as a way to contribute to collective investor wisdom and refine investment strategies in a dynamic market [1]

Financial Performance - The company achieved revenues of $895.0 million, net income of $72.9 million, and adjusted EBITDA of $112.1 million for the year ended December 31, 2024[21]. - Total revenues for 2024 reached $895.0 million, a 12.7% increase from $794.0 million in 2023[204]. - Service revenues increased to $723.3 million in 2024, up from $648.1 million in 2023, representing an 11.6% growth[204]. - Product revenues rose to $171.7 million in 2024, compared to $146.0 million in 2023, marking a 17.7% increase[204]. - Net income for 2024 was $72.9 million, a significant recovery from a net loss of $2.97 million in 2023[204]. - Adjusted EBITDA for 2024 was $112.1 million, up from $89.2 million in 2023, reflecting a 25.7% increase[207]. - Total assets increased to $746.4 million in 2024, compared to $706.1 million in 2023[204]. - Total liabilities decreased to $191.9 million in 2024, down from $272.1 million in 2023, indicating improved financial health[204]. - Working capital improved to $23.5 million in 2024, up from $17.0 million in 2023[204]. - The company reported a significant reduction in interest expense, from $21.4 million in 2023 to $10.0 million in 2024[207]. - The change in fair value of warrant liabilities showed a positive shift, with a gain of $7.7 million in 2024 compared to a loss of $37.6 million in 2023[207]. Market Position and Growth - The health and wellness centers served over 26 million guests in 2024, with guests spending approximately $297 per visit on average[17][19]. - Approximately 19% of the company's revenues were derived from the sale of retail products during the year ended December 31, 2024[19]. - The global wellness tourism market was valued at $830.2 billion in 2023, with a projected market size of $1.35 trillion by 2028, reflecting a compound annual growth rate of 10.2%[28]. - The cruise industry is forecasted to grow at least 10% from 2024 to 2028, with global passenger volume reaching nearly 40 million by 2027[23]. - The company operates 199 health and wellness centers onboard cruise ships and 50 destination resort centers, addressing a captive audience of over 26 million passengers annually[26]. - OneSpaWorld operates health and wellness centers on 199 ships, with expectations to grow as 19 new ships are introduced by existing partners by the end of 2026[39]. - OneSpaWorld is the market leader in the health and wellness industry, with a size more than 18 times that of its closest maritime competitor[212]. - Over the last 50 years, OneSpaWorld has developed strong relationships with cruise line and destination resort partners, enhancing its market position[212]. Operational Efficiency - The company maintains a contract renewal rate of approximately 97% based on ship count over the last 15 years, including 100% for ships larger than 3,500 berths[16]. - The company has entered into agreements with new cruise line partners, including Adora Cruises and Crystal Cruises, while renewing contracts with existing partners[16]. - The company employs up to 83 highly trained professionals in its health and wellness centers, which can range in size up to over 30,000 square feet[18]. - The average remaining term per ship for cruise line agreements is approximately four years as of December 31, 2024[53]. - The company has implemented a dynamic pricing model across its full cruise fleet to optimize demand and maximize utilization[56]. - The company focuses on maximizing profitability through effective management of health and wellness center operations[213]. Marketing and Customer Engagement - Medi-spa services have been highly successful, with guests spending on average up to 5x more than those purchasing traditional services[41]. - Product sales accounted for approximately 19% of revenues in 2024, with over 1,100 branded product SKUs offered[45]. - Onboard spend for the two largest cruise operators increased by $7.7 billion from $5.8 billion to $13.5 billion between 2013 and 2024[42]. - OneSpaWorld's principal cruise line partners accounted for 41.2% (Carnival), 27.9% (Royal Caribbean), and 16.8% (Norwegian) of total revenues in 2024[50]. - Pre-booked guests spend approximately 30% more than those who book services onboard[56]. - The company’s marketing strategies include targeted promotions through various channels, resulting in increased service spend and booking frequency[55]. Sustainability and Compliance - The company is committed to sustainability practices, including reducing paper and plastic usage and sourcing products from environmentally responsible brands[64]. - The company is obligated to make minimum annual payments regardless of revenue, which could exceed collected amounts[97]. - Potential changes in tax laws, including the OECD's BEPS project, could increase the company's tax liabilities and adversely affect financial results[123]. - The Bahamas is implementing an International Business Income Tax in compliance with the OECD's Pillar Two, which could impact the company's effective tax rate starting January 1, 2026[123]. - The company may incur costs related to compliance with environmental regulations, which could affect profitability[141]. Risks and Challenges - The company faces risks from potential bankruptcies of cruise lines, which could terminate agreements and eliminate anticipated income[86]. - The company relies on key officers and qualified employees, with potential adverse effects from their unexpected loss[103]. - The company’s agreements with cruise lines allow for termination with limited notice, posing risks to revenue stability[84]. - Increased fuel costs could adversely impact financial results, affecting transportation and delivery costs[100]. - Economic slowdowns can lead to reduced occupancy rates at destination resorts, directly impacting the sales of health and wellness services[126]. - The company faces competition from various passenger activity alternatives on cruise ships, which could affect its market share[128]. - International operations expose the company to various risks, including currency fluctuations and compliance with local laws, which could adversely affect financial performance[130]. - Political unrest in regions where the company operates health and wellness centers has negatively impacted operations, particularly in the Middle East[133]. - Compliance with evolving data privacy regulations, such as the EU GDPR, poses significant legal and financial risks, including potential fines and reputational damage[143]. - The company is subject to examination of income tax returns, which could adversely affect profitability if findings are unfavorable[144]. Corporate Governance and Shareholder Relations - The company declared a quarterly dividend of $0.04 per common share on July 23, 2024, and another $0.04 on October 24, 2024[195]. - The declaration and payment of future dividends depend on various factors including financial condition and capital requirements[196]. - The company’s common shares are traded on The Nasdaq Capital Market under the symbol "OSW" with 16 registered holders as of February 20, 2025[194]. - The company has a classified Board serving staggered terms of three years, which may delay or prevent a change in control[179]. - The market price and trading volume of the company's common shares have been volatile and may continue to fluctuate significantly due to various risk factors[172]. Cybersecurity and Technology - Cybersecurity remains a top priority, as the company faces threats from cyberattacks that could disrupt operations and lead to increased costs[164]. - The company has a comprehensive cybersecurity program aimed at managing risks and enhancing resilience against threats[181]. - The use of artificial intelligence presents security risks and potential operational inefficiencies, impacting business performance[149]. - The company may face competitive risks if unable to adopt AI technologies while peers leverage these advancements[150].

Financial Data and Key Metrics Changes - Total revenues increased 11% to $217.2 million compared to $194.8 million in Q4 2023 [11] - For the full year, total revenues increased 13% to a record $895 million compared to $794 million in fiscal year 2023 [11] - Income from operations increased 37% to $17.2 million compared to $12.6 million in Q4 2023 [11] - Adjusted EBITDA increased 14% to $26.7 million compared to $23.4 million in Q4 2023 [12] - Net income was $14.4 million or $0.14 per diluted share compared to a net loss of $7.3 million or $0.07 per diluted share in Q4 2023 [28] Business Line Data and Key Metrics Changes - Same Spa revenue overall was up more than 30% year-over-year, driven by increased participation in Medi-Spa services [20][43] - Medi-Spa services were available on 147 ships, up from 139 ships at the end of fiscal year 2023 [20] - The company expects to have Medi-Spa offerings increasing to 151 ships this year [21] Market Data and Key Metrics Changes - The company operated health and wellness facilities on 199 ships at year-end, compared to 193 ships at the end of fiscal 2023 [13] - The average ship count increased from 184 ships to 188 ships [13] Company Strategy and Development Direction - The company is focused on expanding higher-value services and products, including Medi-Spa IV therapy and Acupuncture [16] - A new seven-year agreement was entered into with Royal Caribbean International and Celebrity Cruises, extending a long-term relationship [15] - The company aims to enhance health and wellness center productivity through increased staff training and retention [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering another year of record performance in fiscal 2025, supported by strong financial results and operational accomplishments [10][24] - The company affirmed its fiscal 2025 guidance, expecting total revenue in the range of $950 million to $970 million [35] Other Important Information - The company reduced its debt to $100 million and ended the year with $58.6 million in cash [22][32] - An ongoing quarterly cash dividend payment and share repurchase program were initiated [22] Q&A Session Summary Question: What drove the 30% increase in same spa revenue for Medi-Spa? - The increase was primarily due to more passengers participating in Medi-Spa services, with a focus on adding more staff to meet demand [43][44] Question: Is the services gross margin at a normalized run rate? - There is nothing fundamentally weighing down the gross margin; the decrease in the fourth quarter was due to revenue levels and fixed costs [48][49] Question: Why is there no expected margin expansion despite higher prebooking activity? - There are no headwinds on the cost side, and the company is comfortable with a flat margin profile for the upcoming year [55] Question: How is the company balancing dividend growth versus share repurchases? - The company will evaluate stock buybacks based on market conditions and expects to grow dividends over the next couple of years [59] Question: Were norovirus incidents impactful to the Q1 '25 outlook? - No, norovirus incidents did not materially impact the outlook for Q1 [67] Question: Can you provide details on the dry dock impact for the year? - The first quarter was normal, and there is no anticipation of above-average dry docks in the second quarter [69] Question: Is the restructuring of product architecture still ongoing? - Yes, the company continues to rationalize its product offerings and focus on pricing transformation [73] Question: How does the current spending trend look for the rest of the year? - Current spending trends appear strong, with demand for services remaining high and no significant changes in discounting [95]

Core Viewpoint - OneSpaWorld reported quarterly earnings of $0.20 per share, missing the Zacks Consensus Estimate of $0.21 per share, but showing an increase from $0.12 per share a year ago, indicating a mixed performance in earnings expectations [1][2]. Financial Performance - The company posted revenues of $217.21 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.11% and showing an increase from $194.81 million year-over-year [2]. - Over the last four quarters, OneSpaWorld has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2]. Stock Performance - OneSpaWorld shares have increased approximately 13.1% since the beginning of the year, outperforming the S&P 500's gain of 4% [3]. - The current consensus EPS estimate for the upcoming quarter is $0.22 on revenues of $228.81 million, and for the current fiscal year, it is $0.99 on revenues of $964.6 million [7]. Industry Outlook - The Leisure and Recreation Services industry, to which OneSpaWorld belongs, is currently ranked in the top 18% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8].

Financial Performance - Total revenues for fiscal year 2024 increased 13% to $895.0 million compared to $794.0 million for fiscal year 2023[5] - Income from operations for fiscal year 2024 increased 44% to $78.1 million compared to $54.2 million for fiscal year 2023[5] - Adjusted EBITDA for fiscal year 2024 increased 26% to $112.1 million compared to $89.2 million for fiscal year 2023[5] - Fourth quarter 2024 total revenues increased 11% to $217.2 million compared to $194.8 million for the fourth quarter of 2023[5] - Fourth quarter 2024 income from operations increased 37% to $17.2 million compared to $12.6 million for the fourth quarter of 2023[5] - Fourth quarter 2024 adjusted EBITDA increased 14% to $26.7 million compared to $23.4 million for the fourth quarter of 2023[5] - Service revenues for Q4 2024 reached $175.81 million, an increase of 11% compared to Q4 2023[24] - Product revenues for Q4 2024 were $41.40 million, reflecting a 15% increase year-over-year[24] - Net income for Q4 2024 was $14.39 million, a significant increase of 297% compared to a net loss of $7.30 million in Q4 2023[24] - The company reported an income from operations of $17.23 million for Q4 2024, representing a 37% increase from $12.62 million in Q4 2023[24] - Adjusted net income for Q4 2024 was $21,432,000, compared to $12,500,000 in Q4 2023, representing a 71.5% increase[32] - Adjusted net income for the year ended December 31, 2024, was $89,678,000, compared to $61,894,000 for the year ended December 31, 2023, a growth of 44.9%[32] - Adjusted EBITDA for the year ended December 31, 2024, reached $112,076,000, up from $89,192,000 in 2023, representing a 25.6% increase[35] Cash Flow and Liquidity - The company ended fiscal year 2024 with total cash of $58.6 million and total liquidity of $108.6 million[3] - The company expects to generate positive cash flow from operations for fiscal year 2025[11] Future Guidance - Fiscal year 2025 guidance includes total revenues of $950 to $970 million and adjusted EBITDA of $115 to $125 million[15] - The company plans to open health and wellness centers on board nine new ship builds in fiscal 2025[15] Operational Metrics - The average weekly revenues per ship increased to $83,913 in Q4 2024, compared to $75,903 in Q4 2023[24] - The forecast for Q1 2025 indicates a period-end ship count of 199 and an average ship count of 193[26] - The company plans to maintain a period-end resort count of 50 for FY 2025[26] Interest Expense and Depreciation - The company experienced a significant reduction in interest expense, netting $1.21 million in Q4 2024, an 86% decrease from $8.43 million in Q4 2023[24] - Total depreciation and amortization for Q4 2024 was $6,186,000, compared to $5,542,000 in Q4 2023, reflecting an increase of 11.6%[35] - The company incurred interest expense of $1,209,000 in Q4 2024, down from $8,427,000 in Q4 2023, a decrease of 85.6%[35] Share Metrics - The company reported a diluted weighted average shares outstanding of 105,478,000 for Q4 2024, compared to 100,232,000 for Q4 2023, an increase of 5.0%[32] Non-GAAP Measures - Adjusted EBITDA figures are included in the financial measures not calculated in accordance with GAAP[27] - The company highlighted the importance of non-GAAP measures for providing further insight into profitability and performance comparisons over time[30]

Core Insights - OneSpaWorld Holdings Limited (OSW) reported preliminary results for Q4 and fiscal 2024, highlighting strong operational performance and effective management of its complex business model [1] Financial Performance - For Q4 fiscal 2024, OSW anticipates total revenues between $211 million and $216 million, reflecting a 10% year-over-year increase from $194.8 million in Q4 fiscal 2023 [2] - The company projects total revenues for fiscal 2024 to be in the range of $889 million to $894 million, indicating a 12% increase from $794 million in fiscal 2023 [3] - Adjusted EBITDA for Q4 is expected to be between $25.5 million and $27.5 million, representing a 13% increase from $23.4 million in fiscal 2023 [4] - For fiscal 2024, adjusted EBITDA is projected to be between $110.5 million and $112.5 million, marking a 25% increase from $89.2 million in fiscal 2023 [5] Future Guidance - OSW is optimistic about maintaining positive momentum into fiscal 2025, with expected total revenues between $950 million and $970 million and adjusted EBITDA anticipated to be between $115 million and $125 million [6] Stock Performance - OSW shares have increased by 11.2% over the past three months, outperforming the industry average growth of 3.5% [8] - The company is benefiting from strong consumer demand, particularly in premium wellness services, and has introduced advanced treatments that have contributed to revenue growth [8][9] Strategic Initiatives - OSW plans to launch new products and services, enhance staff training on cruise ships, improve operational efficiency through technology upgrades, and secure new contracts to drive growth [10]

OneSpaWorld Holdings Limited (OSW) stock has witnessed a decent run in the past month, outperforming the S&P 500 and the industry. In the same time frame, OSW has gained 10.9% compared with the industry and the S&P 500’s 9.1% and 2.9% growth, respectively.As of Monday, the stock closed at $19.30, marginally below its 52-week high of $19.69 but well above its 52-week low of $11.59. In the same time frame, other stocks like Carnival Corporation & plc (CCL) , Norwegian Cruise Line Holdings Ltd. (NCLH) and Roya ...