ONESPAWORLD HOLDINGS Ltd

Previous wording

OneSpaWorld Holdings Limited (“OneSpaWorld,” the “Company,” “we,” “our, “us” and other similar terms refer to OneSpaWorld Holdings Limited and its consolidated subsidiaries) is the pre-eminent global operator of health and wellness centers onboard cruise ships and a leading operator of health and wellness centers at destination resorts worldwide. Our highly trained and experienced staff offer guests a comprehensive suite of premium health, fitness, beauty and wellness services and products onboard cruise ships and at destination resorts globally. We are the market leader at more than 18x the size of our closest maritime competitor. Over the last 50 years, we have built our leading market position on our depth of staff expertise, broad and innovative service and product offerings, expansive global staff recruitment, training and logistics platform, global operations infrastructure, as well as decades-long relationships with cruise line and destination resort partners. Throughout our history, our mission has been simple: helping guests look and feel their best during and after their stay.

Current wording

OneSpaWorld Holdings Limited (“OneSpaWorld,” the “Company,” “we,” “our, “us” and other similar terms refer to OneSpaWorld Holdings Limited and its consolidated subsidiaries) is the pre-eminent global operator of health and wellness centers onboard cruise ships and a leading operator of health and wellness centers in destination resorts worldwide. Our highly trained and experienced staff offer guests a comprehensive suite of premium health, fitness, beauty and wellness services and products onboard cruise ships and at destination resorts globally. We are the market leader at more than 18x the size of our closest maritime competitor. Over the last 50 years, we have built our leading market position on our depth of staff expertise, broad and innovative service and product offerings, expansive global staff recruitment, training and logistics platform, global operations infrastructure, and decades-long relationships with our cruise line and destination resort partners. Throughout our history, our mission has been simple: helping guests look and feel their best during and after their stay.

Previous wording

At our core, we are a global services company. We serve a critical role for our cruise line and destination resort partners, operating a complex and increasingly important aspect of their overall guest experience. Decades of investment and know-how have allowed us to construct an unmatched global infrastructure to manage the complexity of our operations. We have consistently expanded our onboard offerings with innovative and leading-edge service and product introductions, and developed the powerful recruiting, training and logistics platforms to manage our operational complexity, maintain our industry-leading quality standards, and maximize revenue and profitability per health and wellness center. The combination of our renowned recruiting and training platform, deep proprietary labor pool, global logistics and supply chain infrastructure, and proven health and wellness center and revenue management capabilities represents a significant competitive advantage that we believe is not economically feasible to replicate.

Current wording

At our core, we are a global services company. We serve a critical role for our cruise line and destination resort partners, operating a complex and increasingly important aspect of their overall guest experience. Decades of investment and know-how have allowed us to construct an unmatched global infrastructure to manage the complexity of our operations. We have consistently expanded our onboard offerings with innovative and leading-edge service and product introductions, and developed our powerful recruiting, training and logistics platforms to manage our operational complexity, maintain our industry-leading quality standards, and maximize revenue and profitability per health and wellness center. The combination of our renowned recruiting and training platform, deep proprietary labor pool, global logistics and supply chain infrastructure, and proven health and wellness center and revenue management capabilities represents a significant competitive advantage that we believe is not economically feasible to replicate.

Previous wording

Service revenues. Service revenues consist primarily of sales of health and wellness services, including a full range of massage treatments, facial treatments, nutritional/weight management consultations, teeth whitening, mindfulness and medi-spa services to cruise ship passengers and destination resort guests. We bill our services at rates which inherently include an immaterial charge for products used in the rendering of such services, if applicable.

Current wording

Service revenues. Service revenues consist primarily of sales of health and wellness, aesthetics and fitness services, including a full range of body care, skin care, hair care, cosmetics, medi-spa, acupuncture, nutrition/weight management and mindfulness services, among others, to cruise ship passengers and destination resort guests. We bill our services at rates which inherently include an immaterial charge for products used in the rendering of such services, if applicable.

Previous wording

Product revenues. Product revenues consist primarily of sales of health and wellness products, such as facial skincare, body care, orthotics, and detox supplements to cruise ship passengers, destination resort guests andtimetospa.com customers.

Current wording

Product revenues. Product revenues consist primarily of sales of health and wellness products, such as skincare, body care, hair care, orthotics, and nutritional supplements to cruise ship passengers, destination resort guests andtimetospa.comcustomers.

Previous wording

Cost of services. Cost of services consists primarily of an allocable portion of payments to cruise lines (which are derived as a percentage of service revenues or a minimum annual rent or a combination of both), an allocable portion of wages paid to shipboard employees, an allocable portion of staff-related shipboard expenses, costs related to recruitment and training of shipboard employees, wages paid directly to destination resort employees, payments to destination resort venue owners, the allocable cost of products consumed in the rendering of a service, and health and wellness center depreciation. Cost of services has historically been highly variable; increases and decreases in cost of services are primarily attributable to a corresponding increase or decrease in service revenues. Cost of services has improved as a percentage of revenue due to higher revenues and cost efficiencies.

Current wording

Cost of services. Cost of services consists primarily of an allocable portion of payments to cruise line partners (which are derived as a percentage of service revenues or a minimum annual rent or a combination of both), an allocable portion of wages paid to shipboard employees, an allocable portion of staff-related shipboard expenses, wages paid directly to destination resort employees, payments to destination resort partners, the allocable cost of products consumed in the rendering of services, and health and wellness center depreciation. Cost of services has historically been highly variable; increases and decreases in cost of services are primarily attributable to corresponding increases or decreases in service revenues. Cost of services has remained generally consistent as a percentage of service revenues.

Previous wording

Cost of products. Cost of products consists primarily of the cost of products sold through our various methods of distribution, an allocable portion of wages paid to shipboard employees and an allocable portion of payments to cruise lines and destination resort partners (which are derived as a percentage of product revenues or a minimum annual rent or a combination of both). Cost of products has historically been highly variable; increases and decreases in cost of products are primarily attributable to corresponding increases or decreases in product revenues and includes impairment of the carrying value of inventories. Cost of products has improved as a percentage of revenue due to higher revenues and cost efficiencies.

Current wording

Cost of products. Cost of products consists primarily of the cost of products sold through our various methods of distribution, an allocable portion of wages paid to shipboard employees and an allocable portion of payments to cruise line and destination resort partners (which are derived as a percentage of product revenues or a minimum annual rent or a combination of both). Cost of products has historically been highly variable; increases and decreases in cost of products are primarily attributable to corresponding increases or decreases in product revenues and includes impairment of the carrying value of inventories. Cost of products has remained generally consistent as a percentage of product revenues.

Previous wording

Amortization of intangible assets. Amortization of intangible assets are comprised of the amortization of intangible assets with definite useful lives (e.g. retail concession agreements, destination resort agreements, licensing agreements)and amortization expenses associated with the business combination in March 2019.

Current wording

Amortization of intangible assets. Amortization of intangible assets are comprised of the amortization of intangible assets with definite useful lives (e.g. retail concession agreements, destination resort agreements, licensing agreements).

Previous wording

Other (expense) income. Other (expense) income consists of interest income, interest expense and changes in the fair value of warrant liabilities.

Current wording

Other income (expense). Other income (expense) consists of interest income, interest expense and changes in the fair value of warrant liabilities.

Previous wording

Net income. Net income consists of income from operations less other (expense) income and income tax expense.

Current wording

Net income. Net income consists of income from operations less other income (expense) and income tax expense.

Previous wording

Collaboration with cruise line partners, including targeted marketing and promotion initiatives, as well as implementation of proprietary technologies to increase center utilization via pre-booking and pre-payment of health and wellness services. We directly market and promote to onboard passengers as a result of increasing collaboration with our cruise line partners. We also utilize our proprietary health and wellness services pre-booking and pre-payment technology platforms integrated with certain of our cruise line partners’ pre-cruise planning systems. These areas of increased collaboration with cruise line partners are resulting in higher productivity, revenue generation, and profitability across our health and wellness centers.

Current wording

Collaboration with cruise line partners, including targeted marketing and promotion initiatives, and implementation of proprietary technologies to increase our health and wellness center utilization via pre-booking and pre-payment of health and wellness services. We directly market and promote to onboard passengers as a result of increasing collaboration with our cruise line partners. We also utilize our proprietary health and wellness services pre-booking and pre-payment technology platforms integrated with certain of our cruise line partners’ pre-cruise planning systems. These areas of increased collaboration with cruise line partners are resulting in higher productivity, revenue generation, and profitability across our health and wellness centers.

Previous wording

Comparison of Results for the Three Months Ended March 31, 2025 and 2024

Current wording

Comparison of Results for the three months ended June 30, 2025 compared to three months ended June 30, 2024

Previous wording

Revenues. Revenues for the three months ended March 31, 2025 and 2024 were $219.6 million and $211.2 million, respectively. The increases in each of service revenues and product revenues were driven by a 2% increase in Revenue Days, which impacted revenue by $5.3 million, and a 2% increase in average guest spend, which positively impacted revenue by $4.7 million. Contributing to the increased volume and spend was $2.3 million in increased pre-booked revenues on health and wellness centers included in our ship count as of March 31, 2025. This was offset by a $1.5 million decrease in our land-based spa business, partially due to the closure of hotels where we had previously operated.

Current wording

Revenues. Revenues for the three months ended June 30, 2025 and 2024 were $240.7 million and $224.9 million, respectively. The increases in Service revenues and Product revenues were driven by a 4% increase in average guest spend, which positively impacted revenues by $8.5 million, 1% increase in Revenue Days, which impacted revenues by $4.5 million, and by fleet expansion, which contributed $3.5 million. Contributing to the increased volume and spend was $2.7 million in increased pre-booked revenues at health and wellness centers included in our ship count as of June 30, 2025. This was offset by a $0.9 million decrease in our destination resorts business, partially due to the closure of hotels where we had previously operated.

Previous wording

Other (expense) income. Other (expense) income includes interest expense and change in the fair value of the warrant liabilities. Interest expense, net for the three months ended March 31, 2025 was $1.1 million, a decrease of $1.8 million, or 61%, compared to $3.0 million for the three months ended March 31, 2024. The decrease was primarily attributable to lower debt balances and lower effective interest rates. Since the year ended December 31, 2023, we have repaid a total of $60.9 million in debt instruments. The change in fair value of the outstanding warrants during the three months ended March 31, 2025 was zero compared to a gain of $7.7 million during the three months ended March 31, 2024. The Company had no outstanding warrants during the three months ended March 31, 2025; accordingly, there was no impact on the Condensed Consolidated Statement of Operations during this period.

Current wording

Other expense. Other expense includes interest expense and change in the fair value of the warrant liabilities. Interest expense, net for the three months ended June 30, 2025 was $1.4 million, a decrease of $0.8 million, or (37%), compared to $2.2 million for the three months ended June 30, 2024. The decrease was primarily attributable to lower debt balances and lower effective interest rates. Since the year ended December 31, 2023, we have repaid a total of $62.1 million in debt instruments. The change in fair value of the outstanding warrants during the three months ended June 30, 2025 was zero compared to a loss of $46 thousand during the three months ended June 30, 2024. The Company had no outstanding warrants during the three months ended June 30, 2025; accordingly, there was no impact on the condensed consolidated statement of operations during this period.

Previous wording

Cost of services. Cost of services for the three months ended March 31, 2025 were $148.2 million, an increase of $4.1 million, or 3%, compared to $144.0 million for the three months ended March 31, 2024. The increase was primarily attributable to costs associated with increased service revenues of $178.5 million in the quarter from our operating health and wellness centers at sea and on land, compared with service revenues of $172.2 million in the first quarter of 2024.

Current wording

Cost of services. Cost of services for the six months ended June 30, 2025 were $309.4 million, an increase of $14.6 million, or 5%, compared to $294.8 million for the six months ended June 30, 2024. The increase primarily was attributable to costs associated with increased Service revenues of $371.9 million in the six months ended June 30, 2025 from our operating health and wellness centers at sea and on land, compared with Service revenues of $353.1 million in the six months ended June 30, 2024.

Previous wording

Cost of products. Cost of products for the three months ended March 31, 2025 were $35.3 million, an increase of $1.8 million, or 5%, compared to $33.5 million for the three months ended March 31, 2024. The increase was primarily attributable to costs associated with increased product revenues of $41.1 million in the quarter from our operating health and wellness centers at sea and on land, compared to product revenues of $39.0 million in the first quarter of 2024.

Current wording

Cost of products. Cost of products for the six months ended June 30, 2025 were $75.3 million, an increase of $4.6 million, or 7%, compared to $70.7 million for the six months ended June 30, 2024. The increase primarily was attributable to costs associated with increased Product revenues of $88.5 million in the six months ended June 30, 2025 from our operating health and wellness centers at sea and on land, compared to Product revenues of $83.1 million in the six months ended June 30, 2024.

Previous wording

Salaries, benefits and payroll taxes. Salaries, benefits and payroll taxes for the three months ended March 31, 2025 were $11.0 million, an increase of $2.5 million, or 29%, compared to $8.5 million for the three months ended March 31, 2024. The increase was primarily attributable to expenses associated with the termination of employment of the Company’s former Chief Commercial Officer, including $1.1 million of severance expense and $1.4 million of expense related to vesting treatment in respect to restricted stock units and performance stock units.

Current wording

Salaries, benefits and payroll taxes. Salaries, benefits and payroll taxes for the six months ended June 30, 2025 were $19.8 million, an increase of $2.1 million, or 12%, compared to $17.7 million for the six months ended June 30, 2024. The increase was primarily attributable to expenses associated with the termination of employment of the Company’s former Chief Commercial Officer, including $1.1 million of severance expense and $1.4 million of expense related to vesting treatment in respect to restricted stock units and performance stock units.

Previous wording

Income tax expense. Income tax expense for the three months ended March 31, 2025 was $0.4 million, a decrease of $0.2 million, or 28%, compared to an expense of $0.6 million for the three months ended March 31, 2024. The decrease is primarily attributable to a lower effective tax rate, driven by higher earnings in foreign jurisdictions and lower earnings in the U.S.

Current wording

Income tax expense. Income tax expense for the six months ended June 30, 2025 was an expense of $1.2 million, a decrease of $0.2 million, or (13%), compared to $1.4 million tax expense for the six months ended June 30, 2024. The decrease was primarily attributable to mix of income earned in lower taxed jurisdictions.

Previous wording

Net income. Net income for the three months ended March 31, 2025 was $15.3 million, a decrease of $5.9 million, or 28%, compared to a net income of $21.2 million for the three months ended March 31, 2024. The change was primarily attributable to a $7.7 million benefit resulting from the change in the fair value of warrant liabilities in the first quarter of 2024. The first quarter of 2025 benefited from a $1.8 million decrease in Interest expense.

Current wording

Net income. Net income for the six months ended June 30, 2025 was $35.2 million, a decrease of $1.7 million, or (5%), compared to a net income of $36.9 million for the six months ended June 30, 2024. The $1.7 million decrease in net income was primarily attributable to the non-recurrence of a $7.7 million gain recognized in the prior-year period resulting from the change in the fair value of warrant liabilities. This unfavorable impact was partially offset by a $2.6 million decrease in interest expense and a $3.2 million improvement in income from operations.

Previous wording

We fund our operations principally with cash flow from operations. Our principal uses for our liquidity have been funding the operations of our health and wellness centers onboard 199 cruise ships and in 50 destination resorts, including associated working capital investment and capital expenditures; capital expenditures in technology and infrastructure assets to enhance our complex global operating platform; debt service, including $1.2 million repayment of our Term Loan Facility; payment of our $4.2 million quarterly dividend; and purchasing 2,094,000 of our common shares under our 2024 Share Repurchase Program, among other uses of our liquidity.

Current wording

We fund our operations principally with cash flow from operations. Our principal uses for our liquidity have been funding the operations of our health and wellness centers onboard 200 cruise ships and in 51 destination resorts, including associated working capital investment and capital expenditures; capital expenditures in technology and infrastructure assets to enhance our complex global operating platform; debt service, including $2.5 million repayment of our Term Loan Facility; payment of $8.3 million in dividends to shareholders; and purchasing 2,094,000 of our common shares under our 2024 Share Repurchase Program, among other uses of our liquidity.

Previous wording

The following table shows summary cash flow information for the three months ended March 31, 2025 and 2024.

Current wording

The following table shows summary cash flow information for the six months ended June 30, 2025 and the six months ended June 30, 2024.

Previous wording

Operating activities. Our net cash provided by operating activities for the three months ended March 31, 2025 and 2024 were $10.1 million and $15.0 million, respectively. This decrease of $4.9 million was due to a change in working capital of ($7.8) million offset by an increase in Net income, net of non-cash items of $2.9 million. The increase in Net income, net of non-cash items was primarily attributable to: (i) increased revenues from a higher number of health and wellness center guests on our existing fleet, expansion of our fleet by five ships, and higher guest spend, and (ii) reduced Interest expense, which was attributable to lower debt balances. For further discussion, see “Results of Operations”, above. The $7.8 million change in working capital was attributable to cash outflows of $15.0 million and $7.2 million for the three months ended March 31, 2025 and 2024, respectively. The cash outflows from working capital for the three months ended March 31, 2025, were primarily driven by a $5.1 million net payment of bonuses to employees, a payment of $7.3 million to cruise line partners related to fees accrued, and a $3.4 million increase in Inventories, as a result of increased purchases reflecting the growth in Revenues and anticipation of increased shipments in the second quarter of 2025. The cash outflows from working capital for the three months ended March 31, 2024 were primarily driven by a $22.1 million increase in Other non-current assets reflecting capitalized contract costs incurred to enter into new or to renew long-term contracts, partially offset by an increase in other long-term liabilities of $7.3 million, which relate to fees accrued to cruise line partners and a $7.0 million increase in Accounts payable, primarily related to the timing of vendor payments.

Current wording

Operating activities. Our net cash provided by operating activities for the six months ended June 30, 2025 and 2024 were $30.4 million and $33.6 million, respectively. This decrease of $3.2 million was due to a change in working capital of ($10.4) million offset by an increase in Net income, net of non-cash items of $7.2 million. The increase in Net income, net of non-cash items was primarily attributable to: (i) increased revenues from a higher number of health and wellness center guests on our existing fleet, expansion of our fleet, and higher guest spend, and (ii) reduced interest expense, which was attributable to lower debt balances. For further discussion, see “Results of Operations”, above. The ($10.4) million change in working capital was attributable to cash outflows of $23.1 million and $12.6 million for the six months ended June 30, 2025 and 2024, respectively.

Previous wording

Investing activities. Our net cash used in investing activities for the three months ended March 31, 2025 and 2024 were $1.7 million and $1.2 million, respectively. During the three months ended March 31, 2025, we continued to make investments in technology hardware and software, including artificial intelligence, and medi-spa equipment.

Current wording

Investing activities. Our net cash used in investing activities for the six months ended June 30, 2025 and 2024 were $4.4 million and $2.3 million, respectively. During the six months ended June 30, 2025, we continued to make investments in technology hardware and software, including artificial intelligence, and medi-spa equipment.

Previous wording

Financing activities. Our net cash (used in) provided by financing activities for the three months ended March 31, 2025 and 2024 were ($43.3) million and $24.0 million, respectively. For the three months ended March 31, 2025, the Company utilized $37.9 million to repurchase 2,094,000 of our common shares, repaid $1.2 million on the Term Loan Facility and paid Dividends of $4.2 million. For the three months ended March 31, 2024, the Company received proceeds from the exercise of public and private warrants of $51.7 million, repaid $20.0 million on its prior term loan facility, which was fully paid off and terminated as of December 31, 2024, and utilized $7.7 million to repurchase 606,386 of our common shares.

Current wording

2,094,000 of our common shares, repaid $2.5 million on the Term Loan Facility and paid Dividends of $8.3 million. For the six months ended June 30, 2024, the Company received proceeds from the exercise of public and private warrants of $51.7 million, repaid $35 million on the First Lien Term Loan Facility, paid $5.4 million of deleveraging fee on the First Lien Credit Facilities and utilized $7.7 million to repurchase 606,386 of our common shares.

Previous wording

As of March 31, 2025, our net future contractual obligations have not changed significantly from the amounts disclosed in our 2024 Form 10-K.

Current wording

As of June 30, 2025, our future contractual obligations have not changed significantly from the amounts disclosed in our 2024 Form 10-K.

Previous wording

Management’s discussion and analysis of financial condition and results of operations is based upon our condensed consolidated unaudited financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated unaudited financial statements and the reported amount of revenues and expenses during the reporting period. Actual results may differ from these estimates under different assumptions or conditions. At least quarterly, management reevaluates its judgments and estimates, which are based on historical experience, current trends and various other assumptions that are believed to be reasonable under the circumstances.

Current wording

Management’s discussion and analysis of financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual results may differ from these estimates under different assumptions or conditions. At least quarterly, management reevaluates its judgments and estimates, which are based on historical experience, current trends and various other assumptions that are believed to be reasonable under the circumstances.

Previous wording

Our critical accounting policies are included in our 2024 Form 10-K. We believe that there have been no significant changes during the three months ended March 31, 2025 to the critical accounting policies disclosed in our 2024 Form 10-K.

Current wording

Our critical accounting policies are included in our 2024 Form 10-K. We believe that there have been no significant changes during the six months ended June 30, 2025 to the critical accounting policies disclosed in our 2024 Form 10-K.