OneSpaWorld Raises Outlook as Service Revenue Drives Growth
Adjusted EBITDA rose 13% to $34.4 million as margins widened.
OneSpaWorld Holdings (OSW), the cruise-ship health-and-wellness operator, raised its full-year outlook after second-quarter revenue increased 9% to $261.2 million.
The quarter extended OneSpaWorld’s growth while marking a moderation from the first quarter, when revenue rose 13%. Revenue increased 5.5% sequentially from $247.6 million, and net income rose 16% from a year earlier to $23.2 million, compared with 40% growth in the prior quarter.
Adjusted EBITDA growth also slowed from 21% in the first quarter, though profitability continued to improve. Adjusted EBITDA margin expanded to about 13.2% from 12.7% a year earlier and 13.0% in the first quarter. Operating income increased 11% to $24.5 million.
Higher activity across the maritime network drove the quarter. Revenue days increased 4% and contributed $14.5 million of growth, while new-ship health-and-wellness centers added $4.8 million. A 1.2% increase in average guest spending contributed another $2.7 million, reflecting a moderation in spending growth even as service volumes held firm.
Service revenue rose 11% to $214.4 million, concentrating the company’s growth in its core offering. Product revenue declined 1% to $46.8 million as OneSpaWorld reorganized its operations in the U.K. and Italy. Pre-booked services contributed $4.7 million of revenue growth, and the company recorded initial gains after deploying artificial-intelligence-driven strategies to substantially all of its health-and-wellness centers at sea.
The cruise network ended the quarter at 208 ships, unchanged sequentially and up from 200 a year earlier. OneSpaWorld also opened a center aboard Royal Caribbean’s Legend of the Seas and began expanding spa facilities across Azamara Cruises vessels. Its destination-resort footprint continued to contract as it exited Asian operations, falling to 25 locations from 51 a year earlier, while average weekly revenue per resort increased about 34% to $17,433.
OneSpaWorld now expects full-year revenue of $1.018 billion to $1.038 billion, raising both ends of its prior range by $4 million. Its Adjusted EBITDA forecast increased by $1 million at both ends to $130 million to $140 million. For the third quarter, the company expects revenue of $268 million to $273 million and Adjusted EBITDA of $35 million to $37 million, implying slower revenue growth of roughly 4% to 6% from a year earlier.