OneSpaWorld Holdings Limited Q1 FY2026 earnings call

Key priorities: First, captured new ship growth with current cruise line partners, introduced health and wellness centers on two new ship builds and on track to introduce on six new shipbuilds this year. Second, expanded high-value service and products, higher-value services like MediSpar, IV therapy, acupuncture saw growth, MediSpar services available on 155 ships up from 148 in first quarter of 2025. Third, enhanced health and wellness center productivity with increases in key operating metrics, pre-book revenues grew 17%, staff retention at 77% improved. Fourth, maintained strong balance sheet and generated robust free cash flow, returned $5.1 million to shareholders through quarterly dividend and reduced debt by $1.3 million. Also, integrating AI technologies into operations, refined machine learning algorithmic engine on 190 vessels, AI assistant deployed on 191 vessels, working on customer-facing chatbots and automation/streamlining for efficiency.

Total revenues increased 13% to $247.6 million. Income from operations increased 36% to $22.9 million. Net income increased 40% to $21.3 million. Adjusted EBITDA increased 21% to $32.2 million. At quarter end, operated health and wellness centers on 208 ships with an average ship count of 202 for the quarter, compared to 199 ships and average ship count of 193 in first quarter of fiscal 2025. Cruise ship health and wellness centers were staffed with 4,585 personnel compared to 4,240 in March 31st, 2025. Revenue contribution is mainly from cruise ship health and wellness center operations.

Full year 2026: Expect total revenue in range of $1.014 billion to $1.034 billion and adjusted EBITDA in range of $129 to $139 billion, representing 9% growth at midpoint. Second quarter 2026: Total revenue range of $257 million to $262 million and adjusted EBITDA range of $32.5 million to $34.5 million, 10% growth at midpoint.

Geopolitical backdrop could cause cancellations or hold off of bookings, which may impact demand. Also, softness in North American to Europe demand and potential drop-off in demand need to be considered.

Q: Randy Connick with Jefferies asked about rise in higher value services, penetration change and high-value services chosen, and penetration of high-value services.

A: Continues to innovate with new services in MediSpa, rolling out more, and added new person in resorts to drive business development and strategy.

Q: Steve Wyszynski with Stiefel asked about productivity improvement, revenue per staff per day, and guidance for back half of year.

A: Newer ships and innovation drive revenue per staff per day, cognizant of geopolitical backdrop and included in guidance.

Q: Max Recklandschel with TD Callen asked about improving pre-booking revenues and AI in pre-booking.

A: Pre-booking services up 17%, AI initiative for dynamic pricing not yet in play.

Q: Gregory Miller with Truist Securities asked about impact of Caribbean itineraries and Europe itineraries.

A: Concentration in Caribbean is positive, no material difference in earnings from Eastern Med vs Western or Northern Europe.

Q: Essia Georgieva with Infinity Research asked about pre-booking growth in Q2, Q3 ship impact, and Europe itineraries.

A: Focus on pre-booking improvement, monitoring Europe situation, seven-night cruising is sweet spot