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ONESPAWORLD HOLDINGS Ltd (OSW) Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered record results: revenue $217.2M (+11% YoY), income from operations $17.2M (+37% YoY), adjusted EBITDA $26.7M (+14% YoY). FY 2024 set records with revenue $895.0M (+13%), income from operations $78.1M (+44%), adjusted EBITDA $112.1M (+26%) .
  • FY 2025 guidance was reaffirmed; Q1 2025 guidance introduced at revenue $215–$220M and adjusted EBITDA $25–$27M, with a ~$4.3M revenue headwind from one less operating day and elevated dry docks; nine new ship builds to open in FY25, mostly in Q4 .
  • Capital allocation strengthened: quarterly dividend of $0.04 per share, $38.7M remaining under buyback authorization, year-end cash $58.6M and total liquidity $108.6M; total debt reduced to ~$98.6M net of DFC .
  • Management highlighted strong MedSpa momentum (same-spa revenue up >30% YoY), continued prebooking attachment (+30% spend uplift vs non-prebook), and operating productivity as core drivers; acknowledged margin guidance is flat given focus on absolute dollars and no pricing assumed yet .

What Went Well and What Went Wrong

What Went Well

  • Record Q4 and FY performance driven by fleet expansion, higher guest spend (+5% in Q4), and improved onboard penetration; Q4 revenue drivers: $11.2M fleet expansion, $8.6M guest spend, $3.7M penetration, plus $3.5M increased pre-booked revenue .
  • MedSpa momentum: same-spa revenue up >30% YoY; expansion to 147 ships by year-end with plans to reach 151 ships in 2025; mix and staffing initiatives boosting high-value services .
  • Capital structure improvements and shareholder returns: debt reduced to ~$100M; initiated dividend and continued buybacks, with $38.7M remaining authorization; total liquidity $108.6M at year-end .

What Went Wrong

  • Services gross margin expansion decelerated vs recent quarters; management attributed this to Q3’s higher revenue base covering semi-fixed costs rather than fundamental pressure, implying normalization in Q4 .
  • Near-term revenue headwinds in Q1 2025 from a non-recurring calendar effect (one less day vs 2024) and more dry docks; combined ~$4.3M Q1 revenue impact .
  • Market reaction to the release was negative per Q&A context; management indicated potential tactical buyback responsiveness if the price meets internal thresholds .

Financial Results

Sequential Comparison (Q2 2024 → Q3 2024 → Q4 2024)

MetricQ2 2024Q3 2024Q4 2024
Total Revenues ($USD Millions)$224.9 $241.7 $217.2
Net Income ($USD Millions)$15.8 $21.6 $14.4
Diluted EPS ($USD)$0.15 $0.20 $0.14
Income from Operations ($USD Millions)$18.8 $25.0 $17.2
Adjusted EBITDA ($USD Millions)$27.1 $33.0 $26.7

Year-over-Year Comparison (Q4 2023 → Q4 2024)

MetricQ4 2023Q4 2024
Total Revenues ($USD Millions)$194.8 $217.2
Service Revenues ($USD Millions)$158.9 $175.8
Product Revenues ($USD Millions)$35.9 $41.4
Cost of Services ($USD Millions)$131.8 $145.3
Cost of Products ($USD Millions)$30.7 $35.0
Income from Operations ($USD Millions)$12.6 $17.2
Net Income ($USD Millions)($7.3) $14.4
Diluted EPS ($USD)($0.07) $0.14
Adjusted Net Income ($USD Millions)$12.5 $21.4
Adjusted EBITDA ($USD Millions)$23.4 $26.7

Segment Breakdown (Service vs Product)

MetricQ2 2024Q3 2024Q4 2024
Service Revenues ($USD Millions)$180.8 $194.4 $175.8
Product Revenues ($USD Millions)$44.0 $47.3 $41.4

KPIs

KPIQ2 2024Q3 2024Q4 2024
Period End Ship Count197 196 199
Average Ship Count188 195 188
Average Weekly Revenues per Ship ($)$88,034 $91,019 $83,913
Average Revenues per Shipboard Staff per Day ($)$586 $602 $550
Revenue Days——17,307
Period End Resort Count52 52 50
Average Weekly Revenues per Resort ($)$14,028 $11,860 $13,219

Note: Revenue Days disclosed for Q4 2024; not provided in the Q2/Q3 tables .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent/Prelim/ActualChange
Total Revenues ($USD Millions)Q4 2024$210–$215 Prelim: $211–$216 ; Actual: $217.2 Raised vs prior; Actual beat upper end of prelim
Adjusted EBITDA ($USD Millions)Q4 2024$25–$27 Prelim: $25.5–$27.5 ; Actual: $26.7 Raised vs prior; Actual near high-end
Total Revenues ($USD Millions)FY 2024$888–$893 Prelim: $889–$894 ; Actual: $895.0 Raised vs prior; Actual above prelim
Adjusted EBITDA ($USD Millions)FY 2024$110–$112 Prelim: $110.5–$112.5 ; Actual: $112.1 Raised vs prior; Actual in upper half
Total Revenues ($USD Millions)Q1 2025—$215–$220; ~$4.3M headwind from leap year/drydocks New
Adjusted EBITDA ($USD Millions)Q1 2025—$25–$27 New
Total Revenues ($USD Millions)FY 2025Intro: $950–$970 Reaffirmed: $950–$970 Maintained
Adjusted EBITDA ($USD Millions)FY 2025Intro: $115–$125 Reaffirmed: $115–$125 Maintained
DividendOngoingInitiated $0.04/qtr Declared $0.04 in Q4 release Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
MedSpa expansion and performanceOngoing service innovation; record maritime operating metrics ; continued productivity gains Same-spa revenue up >30% YoY; expanding to 151 ships; staffing (doctors/nurses) drives throughput Strengthening
Prebooking attachment and spendFocus on guest experience, retail attachment; record revenue per passenger/day Prebooked services at ~22% of services; prebook spends >30% more; incremental prebook revenue in Q4 ($3.5M) Improving
Pricing transformation and SKU rationalizationOperating productivity and mix improvements Continuing SKU rationalization and pricing work, banner-by-banner testing and tweaks Ongoing optimization
Margin outlookStrong EBITDA growth Q2/Q3 FY25 margin profile guided flat; no price increases assumed; focus on absolute dollars Stable (flat guidance)
Capital structure, buybacks, dividendDebt paydown; dividend initiation; buybacks in Q3 $58.6M cash; $108.6M liquidity; $38.7M buyback capacity; opportunistic buyback if valuation meets algorithm; dividend maintained Shareholder-friendly
Capacity additions and partnershipsOperated on 197 ships; new term loan and revolver; increased guidance Operating on 199 ships; 9 new ship builds in FY25 (mostly Q4); 7-year extension with RCL/Celebrity Visible growth (back-half loaded)
Operational cadence: dry docks and calendarGuidance updates; operational efficiency Q1 headwind from leap year and more dry docks (~$4.3M revenue impact) Near-term headwind, transitory
Macro demand/wave seasonStrong demand underpinning metrics Management sees strong ticket yields and demand; limited discounting; supportive for onboard spend Supportive

Management Commentary

  • “We delivered a strong finish to an excellent year with fiscal 2024 marking another record for Total revenues, Income from operations and Adjusted EBITDA… We begin fiscal 2025 strongly positioned and expect to deliver another year of record performance.” — Leonard Fluxman, CEO .
  • “We ended the year with total cash of $58.6 million and full availability of our $50 million revolving loan facility, giving us total liquidity of $108.6 million… reducing debt to $100 million… we affirm our recently provided full fiscal year 2025 guidance.” — Stephen Lazarus, CFO/COO .
  • “Prebooking… remained strong at 22%… passengers that prebook spend more than 30% more than those that do not… same Spa revenue overall up more than 30% year-over-year.” — Leonard Fluxman (prepared remarks) .
  • “With our strong 2024 performance and a positive outlook, we are affirming… FY25… high single-digit growth… For Q1 2025… the leap year effect and dry docks… expected to negatively impact total revenue by approximately $4.3 million.” — Stephen Lazarus .

Q&A Highlights

  • MedSpa growth drivers: Volume plus staffing (more doctors/nurses) drove >30% same-spa revenue growth; facility utilization algorithm allows repurposing space to maximize throughput .
  • Services gross margin: Q4 expansion slower vs recent quarters due to Q3’s higher revenue covering semi-fixed costs; no fundamental pressure identified .
  • Margin guidance: FY25 margin profile guided flat; no pricing embedded; management focused on absolute dollar generation; potential modest upside if pricing opportunities emerge .
  • Capital allocation: Buybacks opportunistic if valuation meets internal algorithm; dividend expected to grow over time with excess cash .
  • Q1 operational impacts: Norovirus incidents not material to outlook; dry dock cadence normal; ship adds by quarter: 1 in Q1, 2 in Q2, 1 in Q3, remainder in Q4 .

Estimates Context

  • Wall Street consensus (S&P Global) estimates for Q4 2024 and forward quarters were unavailable at the time of this analysis due to provider limits; as a result, we cannot quantify beats/misses versus SPGI consensus for revenue or EPS in the tables above [Values retrieved from S&P Global]*.
  • Given the strong YoY metrics and reaffirmed FY25 guidance, sell-side models may need to reflect: (i) transitory Q1 headwinds (~$4.3M revenue impact), (ii) back-half FY25 volume uplift from Q4 ship launches, and (iii) flat margin profile absent price actions .

Key Takeaways for Investors

  • Strong Q4 and FY 2024 execution with record revenue, operating income, and adjusted EBITDA; productivity and MedSpa expansion underpin growth .
  • Near-term Q1 2025 headwinds are calendar/drydock-related and transitory; FY25 remains on track with back-half capacity adds (mostly Q4), suggesting potential H2 acceleration .
  • Margin guidance is flat, reflecting no pricing assumptions; upside could emerge if pricing and mix initiatives (prebooking, SKU rationalization) continue to scale .
  • Capital returns and balance sheet strength provide downside support: $0.04 quarterly dividend and opportunistic buybacks with $38.7M remaining authorization; liquidity $108.6M .
  • Watch MedSpa rollout pace and staffing as key alpha driver; same-spa revenue growth >30% signals durable demand .
  • Monitor prebooking attachment growth and banner-level execution; prebook customers spend >30% more, a tangible lever for spend per guest .
  • Narrative likely sensitive to Q1 prints (calendar/drydocks) and clarity on Q4 new ship ramps; any announcements on pricing actions or additional partner contracts could be positive catalysts .
Footnote: *S&P Global estimates data unavailable at time of request due to provider limits; comparisons to consensus cannot be provided.

Appendix: Additional Data and Reconciliations

  • Non-GAAP reconciliations: Adjusted net income and Adjusted EBITDA tables provided in the press release; add-backs include change in fair value of warrant liabilities, D&A, impairments, stock-based compensation, and business combination costs .
  • FY 2024 balance sheet highlights: cash $58.6M; total debt (net of deferred financing costs) $98.6M; undrawn $50M revolver .
  • Operating network: Year-end ship count 199; average ship count 188 in Q4; staff count 4,352 on vessels .

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