OneSpaWorld Holdings Ltd. Q3 FY2024 earnings call

• Record performance: Total revenues, income from operations, adjusted EBITDA, and unlevered after-tax free cash flow all reached records. - Strategic priorities: Captured new ship growth, ramped higher value services like cryotherapy with double-digit Q3 revenue growth vs Q2, enhanced health and wellness center productivity with growth in key maritime metrics, expanded Medi-Spas (available on 144 ships), and improved capital structure via refinancing and share repurchases. - Productivity and staffing: Growth in revenue passenger per day, weekly revenue, and revenue per staff per day driven by increased cruise guests and treatments per guest; experienced staff retention improved with more staff signing on for additional contracts.

Total revenues increased 12% to a record $241.7 million in Q3 2024. Ship count grew year-over-year; at quarter end, operated health and wellness centers on 196 ships with an average of 195 for the quarter. For cruise ship health and wellness centers, revenue passenger per day, weekly revenue, and revenue per staff per day grew due to increased cruise guests and treatments per guest. New ship growth included opening on Utopia of the Seas, with 5 new ship builds in the first nine months. Land-based resorts saw same spa revenue up double-digit year-over-year but were impacted by renovations and softness in Asia, with average weekly revenue affected by construction and occupancy issues.

• Fiscal 2024: Increased guidance to total revenues $888 million to $893 million (previously $870 million to $890 million) and adjusted EBITDA $110 million to $112 million (previously $102 million to $108 million). - Fourth quarter: Expected total revenue $210 million to $215 million, adjusted EBITDA $25 million to $27 million. - Long-term: Confident in high single-digit revenue growth, with 10 new builds coming in 2025, making high single-digit growth achievable.

• Tariffs: Majority of products enter bonded warehouse and go to international waters, so minimal impact from tariffs. - Land-based resorts: Impact from renovations and softness in Asia affecting revenue. - Election: No significant tariff risk anticipated related to the election.

Q: Steve Wieczynski asked about margin expansion.

A: Salary and payroll taxes down due to even spread of performance-based comp; service margin due to strong onboard demand and minimal promotions.

Q: Steven Wieczynski asked about land-based vs maritime revenue.

A: Land-based impacted by renovations and Asia softness; expecting improvement in 2025.

Q: Max Rakhlenko asked about pricing and margins.

A: Demand robust, opportunities for small price increases; 2024 EBITDA margin as jumping off point, optimistic for 2025.

Q: Sharon Zackfia asked about tariff risk and election.

A: Minimal tariff impact; long-term revenue growth achievable but cautious on revising algorithm.

Q: Gregory Miller asked about private islands and services.

A: Feedback from passengers drives addition of services; pre-booking and passenger demand key.

Q: Assia Georgieva asked about pre-booked rates and data sharing.

A: Pre-booked rate at 22%, potential to increase with cruise line focus; data sharing from cruise lines unlikely.

Q: Laura Champine asked about pre-bookings and data.

A: Pre-booking improvements via better website navigation and cruise line marketing focus.