Company Performance & Financials - OneSpaWorld delivered a record third quarter in 2025, marking the 18th consecutive quarterly period of year-over-year growth in Total Revenues and Adjusted EBITDA[18] - The company expects fiscal 2025 annual Total Revenues to increase by 8% and Adjusted EBITDA to increase by 10% at the mid-point of the guidance ranges from actual fiscal 2024 annual results[18] - FY 2025 Revenue is projected to be between $958.5 million and $963.5 million, with Adjusted EBITDA between $122 million and $124 million[20] - FY 2026 Revenue is projected to be between $1.01 billion and $1.03 billion, with Adjusted EBITDA between $128 million and $138 million[21] - In Q3 2025, Passenger Cruise Days ("PCD"s) are at 116%+ of Q3 2019 levels, and bookings are ~55% above Q3 2019[39] Market Position & Growth Drivers - OneSpaWorld holds a >90% market share at sea in the outsourced health and wellness market[17] - The company is nearly 20x larger than its nearest maritime competitor[12] - The company has access to a ~23 million annual captive audience[12] - Cruise industry passenger bookings have rebounded, with 2025 expected to eclipse 2019 levels[34] - Onboard spend per PCD (Passenger Cruise Day) was up ~22% in 2024 vs 2019[39] Strategic Advantages - OneSpaWorld operates on 204 ships[17] and 49 resorts[17] - The company has long-term agreements with the largest and most reputable cruise lines, with an average cruise line relationship history of 20+ years and a ~97% historical contract renewal rate[25]

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]