OneSpaWorld Holdings Limited Q4 FY2025 earnings call

• Leonard Fluxman noted the record fourth quarter performance, with double-digit growth in total revenues and adjusted EBITDA, 19 consecutive quarters of year-over-year growth. They advanced strategic priorities like capturing new ship growth, expanding higher-value services, enhancing health and wellness center productivity, and having a strong balance sheet. - Stephen Lazarus discussed revenue enhancements with a machine-learning algorithmic engine and dynamic price optimization model, early success with the onboard virtual assistant, and automation and streamlining initiatives for operational efficiency and scalability.

During the fourth quarter, total revenue increased 11% to $242.1 million compared to $217.2 million in the same period of 2024. Growth was driven by fleet expansion from 2025 new ship builds, a 2% increase in revenue days and a 1% increase in average guest spend. Maritime total revenue growth was offset by a $1.3 million decrease in destination resorts total revenue. For the fiscal year, total revenue of $961 million increased 7% compared to $895 million from the prior year. Adjusted net income rose 15% to $102.9 million and adjusted EBITDA increased 10% to $123.3 million. At year-end, the company operated health and wellness centers on 206 ships with an average ship count of 199 for the quarter, compared to 199 ships and an average of 188 ships in fiscal 2024. There were 4,582 cruise ship personnel on vessels at year-end, up from 4,352 in fiscal 2024. Medi-Spa services were available on 153 ships at year-end, expected to be on 157 ships by year-end 2026.

The company is reaffirming its fiscal 2026 outlook. It expects fiscal 2026 total revenues to be in the range of $1.01 billion to $1.03 billion, representing high single-digit increases at the midpoint from 2025 results (excluding exited and reorganized operations). Adjusted EBITDA is expected in the range of $128 million to $138 million. For the first quarter of 2026, total revenue is expected in the range of $241 million to $246 million, with adjusted EBITDA expected in the range of $30 million to $32 million.

Q: Dig in further on AI integration, potential benefits, impact on margins, and cadence of showing meaningful impact.

A: Stephen Lazarus said they will talk more specifically after the second quarter results, remain on track, encouraged by initial results, and current guidance doesn't include potential impact from these initiatives.

Q: Consumer trends, attachment rates, discounting, and ability to take price in 2026.

A: Stephen Lazarus said in 2025 they didn't take service price increases, in 2026 will evaluate, so far year-to-date seeing higher prices accepted, net going to customer remains high.

Q: Detail on dynamic price optimization model rollout.

A: Stephen Lazarus said first place will be on prebooking, covering 94% of vessels on that platform, phases include pre-booking rollout then to remaining vessels, back half of the year.

Q: Broader rollout of reformatting spa menus.

A: Leonard Fluxman said they condensed the menu to focus on more popular items, narrowing aperture to higher treatment rates, no intention of broadening as extensive menu wasn't purposeful before.