OneSpaWorld Holdings Ltd. Q1 FY2025 earnings call

• Captured new ship growth with cruise line partners, introduced medi-spa on Norwegian Cruise Lines’ Prima Plus Class ship and have 8 new ships set to launch this year; executed new agreement with P&O Cruise Lines and Cunard.
• Expanded high-value services like medi-spa, IV therapy, acupuncture; medi-spa services on 148 ships, expecting 151 this year; new technologies like FLX and CoolSculpting Elite drove over 20% growth in Q1.
• Enhanced health and wellness center productivity with growth in key metrics; focus on staff retention, training, and redesigned talent management; pre-booking revenue at 23%, introduced on Virgin Voyages fleet.
• Enhanced capital structure: board approved $75 million share repurchase program; strong balance sheet with $23.8 million cash, $73.8 million liquidity, total debt $97.4 million.

Total revenues increased 4% to $219.6 million compared to $211.2 million in the first quarter of 2024. Income from operations was $16.8 million (including $2.5 million nonrecurring severance expense), compared to $17 million in the first quarter of 2024. Adjusted EBITDA increased 5% to $26.6 million (including $1.1 million nonrecurring cash severance expense), compared to $25.3 million in the first quarter of 2024. At quarter end, the company operated health and wellness centers on 199 ships with an average ship count of 193 for the quarter, up from 193 ships and an average ship count of 188 ships in the first quarter of 2024. Cruise ship personnel were 4,240 at quarter end, compared to 4,082 in the first quarter of 2024.

Reaffirmed annual guidance: total revenue expected $950 million to $970 million, adjusted EBITDA $115 million to $125 million. Second quarter 2025: total revenue $235 million to $240 million, adjusted EBITDA $28 million to $30 million. Confident in navigating economic environment with positive momentum.

Q: Steve Wieczynski asks about spend patterns and whether consumers are changing behaviors.

A: Leonard Fluxman says no significant decline seen in April, spend continues to increase, and high-end services remain in demand.

Q: Steve Wieczynski inquires about what would cause the guidance to be at the low end.

A: Stephen Lazarus states the low end assumes moderation in onboard spending but no significant deterioration has been seen.

Q: Sharon Zackfia asks about pre-booking trends.

A: Leonard Fluxman says there was a slight pickup in pre-booking, with 23% of revenues from pre-booking, and cruise lines are receptive.

Q: Laura Champine asks about sensitivity of buyback to business softening.

A: Stephen Lazarus says buybacks aren't necessarily contingent on growth staying strong, more about stock value.

Q: Gregory Miller asks about spend trends post-tariffs.

A: Leonard Fluxman says no changes were seen during cruising, as people had already set their budgets.

Q: Assia Georgieva asks about pre-booked revenue for Q2/Q3.

A: Stephen Lazarus and Leonard Fluxman say it's too early to comment.

Q: Assia Georgieva asks about medi-spa product prices.

A: Stephen Lazarus says providers of medi-spa products aren't expecting price increases to OneSpaWorld.

Q: Assia Georgieva asks about land-based closings.

A: Leonard Fluxman says no significant changes are anticipated.