Financial Data and Key Metrics Changes - Total revenue for Q2 2025 increased sequentially to approximately $7.7 million from $7.0 million in Q1 2025, but decreased year-over-year from $9.3 million in Q2 2024 [20] - Total cost of sales decreased year-over-year to $5.9 million from $6.2 million, while general and administrative expenses also decreased to $4.3 million from $4.7 million [20] - Operating loss for Q2 2025 was approximately $2.7 million compared to an operating loss of approximately $1.9 million in Q2 2024 [20] - Net loss attributable to ExWell was approximately $2.3 million compared to a net loss of approximately $2.0 million in the prior year [20] - As of June 30, 2025, cash and cash equivalents were approximately $5.3 million, with total assets of approximately $11.8 million and no long-term debt [20] Business Line Data and Key Metrics Changes - Revenue from EXPRESS PA locations was approximately $4.9 million, while Express Test contributed approximately $2.2 million [20] - Revenue from Naples Wax Center was approximately $647,000, indicating a diversified revenue stream [20] Market Data and Key Metrics Changes - The partnership with the Orlando Magic enhances brand visibility and engagement in the Florida market, which is a strategic priority for the company [6][7] - The expanded relationship with Priority Pass broadens access to wellness offerings across U.S. and international airport spa networks [7] Company Strategy and Development Direction - The company is executing a multi-pronged strategy to broaden operational footprint and deepen customer engagement [5] - Plans to expand beyond airport environments into local markets with new brick-and-mortar wellness centers [11] - Introduction of a flexible membership model to enhance accessibility and customer loyalty [13] - Strategic acquisitions of medical spas in key metropolitan markets are being pursued to tap into the growing wellness market [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to meet increasing demand for integrated wellness solutions [18] - The company is focused on managing resources responsibly and optimizing efficiencies to drive profitability [19] - Positive momentum in operating results reflects the strength of execution and market recognition [16] Other Important Information - The redesigned digital platform integrates all brands into a seamless user experience, enhancing customer engagement [10] - The company has secured a three-year extension of its traveler-based genomic surveillance program in partnership with the CDC [15] Q&A Session Summary - No specific questions or answers were provided in the content, indicating that the conference call concluded without a Q&A segment [23]

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

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

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]

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].