Onespaworld Holdings ((OSW)) has held its Q1 earnings call. Read on for the main highlights of the call.
The recent earnings call for OneSpaWorld Holdings reflected a strong overall performance, marked by notable revenue and adjusted EBITDA growth. The company highlighted its expansion in medi-spa services and new partnerships, despite facing challenges such as a decline in net income and land-based spa revenue. Nevertheless, the sentiment remained optimistic, with a focus on future growth and enhancing shareholder value.
Revenue Growth
OneSpaWorld reported a 4% increase in total revenues, reaching $219.6 million compared to $211.2 million in the first quarter of 2024. This growth underscores the company’s ability to enhance its financial performance despite industry challenges.
Adjusted EBITDA Increase
The company saw a 5% rise in adjusted EBITDA, climbing to $26.6 million from $25.3 million in the previous year. This increase indicates improved operational efficiency and profitability.
Expansion of Medi-Spa Services
OneSpaWorld’s medi-spa services experienced over 20% growth in the first quarter, driven by new technologies. These services are now available on 148 ships, up from 142, showcasing the company’s commitment to expanding its offerings.
New Cruise Line Partnerships
The company introduced health and wellness centers on Norwegian Cruise Lines’ first Prima Plus Class ship and secured agreements to operate centers on 11 ships for P&O Cruise Lines and Cunard, highlighting strategic partnerships to broaden its market presence.
Strong Cash Flow and Shareholder Returns
OneSpaWorld returned $42 million to shareholders through dividends and share repurchases and approved a new $75 million share repurchase program, demonstrating its focus on delivering shareholder value.
Net Income Decline
Net income decreased to $15.3 million from $21.2 million, primarily due to a $7.7 million benefit from the change in fair value of warrant liabilities in the prior year, reflecting some financial headwinds.
Decrease in Land-Based Spa Business
The company faced a $1.5 million decline in land-based spa revenue, partly due to hotel closures, indicating challenges in this segment of their business.
Nonrecurring Severance Expenses
OneSpaWorld reported $2.5 million in nonrecurring severance expenses, impacting income from operations but highlighting efforts to streamline operations.
Forward-Looking Guidance
Looking ahead, OneSpaWorld provided robust guidance, projecting high single-digit growth in revenue and adjusted EBITDA for fiscal 2025. They anticipate total revenue between $950 million and $970 million, and adjusted EBITDA between $115 million and $125 million. For the second quarter, they expect revenues ranging from $235 million to $240 million, with adjusted EBITDA between $28 million and $30 million. The company also emphasized a strong balance sheet and a commitment to shareholder value through a new $75 million share repurchase program.
In conclusion, OneSpaWorld Holdings showcased a positive earnings call, with strong revenue and EBITDA growth, strategic partnerships, and a focus on expanding medi-spa services. Despite some challenges, the company’s forward-looking guidance and shareholder value strategies reflect optimism for continued growth and success.