ONESPAWORLD HOLDINGS Ltd

Previous wording

Average Weekly Revenue Per Destination Resort. A key indicator of productivity per destination resort health and wellness center. Revenue per destination resort health and wellness center in a period can be affected by the geographic mix of health and wellness centers in operation for such period. Typically, our U.S. and Caribbean health and wellness centers are larger and produce substantially more revenues per location than our Asian centers. Additionally, average weekly revenue can also be negatively impacted by renovations of our destination resort health and wellness centers.

Current wording

Average Weekly Revenue Per Destination Resort. A key indicator of productivity per destination resort health and wellness center. Revenue per destination resort health and wellness center in a period can be affected by the geographic mix of health and wellness centers in operation for such period. Typically, our U.S. and Caribbean health and wellness centers are larger and produce substantially more revenues per location than our Asia centers. Additionally, average weekly revenue can also be negatively impacted by renovations of our destination resort health and wellness centers.

Previous 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.

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, systemic detoxification and nutrition regimens, 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, wellness, aesthetics and fitness related products, such as facial skincare, body care, orthotics and detox supplements to cruise ship passengers, destination resort guests andtimetospa.com customers.

Previous wording

Comparison of Results for the Three Months Ended March 31, 2026 and 2025

Current wording

Comparison of Results for the three months ended June 30, 2026 compared to three months ended June 30, 2025

Previous wording

Revenues. Total revenues increased 13% to $247.6 million compared to $219.6 million for the first quarter of 2025, driven by a 4% increase in revenue days, a 2% increase in average guest spend, and health and wellness center expansion from 2026 new ship builds, contributing $23.1 million, $5.0 million and $1.2 million, respectively, to the increase in Total revenues, of which $5.4 million was attributable to increased guest pre-booked services. Growth in our Maritime Total revenues was offset by a $1.2 million decrease in destination resorts Total revenues, partially due to the closure of hotels where we had previously operated.

Current wording

Revenues. Total revenues increased 9% to $261.2 million compared to $240.7 million for the second quarter of 2025, driven by a 4% increase in revenue days, health and wellness center expansion from 2026 new ship builds, and a 1.2% increase in average guest spend, contributing $14.5 million, $4.8 million and $2.7 million, respectively, to the increase in total revenues, of which $4.7 million was attributable to increased guest pre-booked services. Growth in our Maritime Total revenues was offset by a $1.3 million decrease in destination resorts total revenues, partially due to the closure of hotels where we had previously operated. The decrease in Product revenues was driven by the previously announced reorganization of operations in the United Kingdom and Italy.

Previous wording

Cost of services. Cost of services for the three months ended March 31, 2026 were $168.3 million, an increase of $20.2 million, or 14%, compared to $148.2 million for the three months ended March 31, 2025. The increase was primarily attributable to costs associated with increased service revenues of $203.7 million in the quarter from our operating health and wellness centers at sea and on land, compared with service revenues of $178.5 million in the first quarter of 2025.

Current wording

Cost of services. Cost of services for the three months ended June 30, 2026 were $176.9 million, an increase of $15.6 million, or 10%, compared to $161.2 million for the three months ended June 30, 2025. The increase was primarily attributable to costs associated with increased Service revenues of $214.4 million in the quarter from our operating health and wellness centers at sea and on land, compared with Service revenues of $193.4 million in the second quarter of 2025.

Previous wording

Cost of products. Cost of products for the three months ended March 31, 2026 were $37.8 million, an increase of $2.5 million, or 7%, compared to $35.3 million for the three months ended March 31, 2025. The increase was primarily attributable to costs associated with increased product revenues of $44.0 million in the quarter from our operating health and wellness centers at sea and on land, compared to product revenues of $41.1 million in the first quarter of 2025.

Current wording

Cost of products. Cost of products for the three months ended June 30, 2026 were $39.8 million, a decrease of $0.2 million, or (1)%, compared to $40.0 million for the three months ended June 30, 2025. The decrease was primarily attributable to costs associated with decreased Product revenues of $46.8 million in the quarter from our operating health and wellness centers at sea and on land, compared to Product revenues of $47.4 million in the second quarter of 2025.

Previous wording

Administrative. Administrative expenses were $6.2 million, compared to $4.2 million in the first quarter of 2025. The increase was primarily due to $1.9 million in third-party fees for certain management and logistic services as a result of our previously announced restructuring, which were previously performed internally by company staff, and as such, the related costs have shifted from Salaries, benefits and payroll taxes to Administrative.

Current wording

Administrative. Administrative expenses for the three months ended June 30, 2026 were $7.2 million, an increase of $2.8 million, or 63%, compared to $4.4 million for the three months ended June 30, 2025. The increase was primarily due to $2.0 million in third-party fees for certain management and logistics services as a result of our previously announced restructuring, which were previously performed internally by company staff, and as such, the related costs have shifted from Salaries, benefits and payroll taxes to Administrative.

Previous wording

Amortization of intangible assets. Amortization of intangible assets was $4.1 million for each of the three months ended March 31, 2026 and 2025.

Current wording

Amortization of intangible assets. Amortization of intangible assets was $4.1 million for each of the three-month periods ended June 30, 2026 and 2025.

Previous wording

Interest expense, net. Interest expense, net was $1.2 million for the three months ended March 31, 2026, compared to $1.1 million for the three months ended March 31, 2025. The nominal increase was primarily due to a $0.2 million decrease in interest income resulting from lower average interest-bearing cash balances. This was partially offset by a decrease in interest expense driven by a $15.0 million reduction in the principal balance of the Term Loan Facility since March 31, 2025, which included a $10.0 million discretionary prepayment in the third quarter of 2025 and $5.0 million in scheduled principal payments.

Current wording

Interest expense, net. Interest expense, net was $1.1 million for the three months ended June 30, 2026, compared to $1.4 million for the three months ended June 30, 2025. The decrease was primarily due to a $15.0 million reduction in the principal balance of the Term Loan Facility since June 30, 2025, including a $10.0 million discretionary prepayment in the third quarter of 2025 that satisfied scheduled amortization through 2027.

Previous wording

Net income. Net income for the three months ended March 31, 2026 was $21.3 million, an increase of $6.1 million, or 40%, compared to a net income of $15.3 million for the three months ended March 31, 2025. This increase was primarily attributable to a $6.0 million improvement in operating income.

Current wording

Net income. Net income for the three months ended June 30, 2026 was $23.2 million, an increase of $3.3 million, or 16%, compared to a net income of $19.9 million for the three months ended June 30, 2025. This increase was primarily attributable to a $2.4 million improvement in operating income, a $0.6 million decrease in income tax expense, and a $0.3 million decrease in interest expense, net.

Previous wording

Salaries, benefits and payroll taxes. Salaries, benefits and payroll taxes for the three months ended March 31, 2026 were $8.4 million, a decrease of $2.6 million, or (24)%, compared to $11.0 million for the three months ended March 31, 2025. The decrease was primarily attributable to the non-recurrence of $2.5 million in separation-related expenses incurred during the first quarter of 2025 associated with the termination of the Company’s former Chief Commercial Officer. The variance also reflects a reduction in internal personnel costs in the first quarter of 2026 resulting from the transition of certain management and logistics services to third-party providers, as discussed above, partially offset by annual merit increases and higher incentive-based compensation.

Current wording

Salaries, benefits and payroll taxes. Salaries, benefits and payroll taxes for the six months ended June 30, 2026 were $17.2 million, a decrease of $2.6 million, or (13)%, compared to $19.8 million for the six months ended June 30, 2025. The decrease was primarily attributable to the non-recurrence of $2.5 million in separation-related expenses incurred during the first quarter of 2025 associated with the termination of employment of the Company’s former Chief Commercial Officer. The variance also reflects a reduction in internal personnel costs in the six months ended June 30, 2026 resulting from the transition of certain management and logistics services to third-party providers, as discussed above, partially offset by annual merit increases and higher incentive-based compensation.

Previous wording

We fund our operations principally with cash flow from operations. Our principal uses for our liquidity during the three months ended March 31, 2026, included (i) funding investment in support of the operations of our health and wellness centers onboard cruise ships and in destination resorts, including working capital and capital expenditures for technology, infrastructure, and global operating infrastructure; (ii) a $1.3 million principal payment on our Term Loan Facility; and (iii) the payment of $5.1 million in Dividends.

Current wording

We fund our operations principally with cash flow from operations. Our principal uses for our liquidity during the six months ended June 30, 2026 included (i) funding investment in support of the operations of our health and wellness centers onboard cruise ships and in destination resorts, including working capital and capital expenditures for technology, infrastructure, and global operating infrastructure; (ii) a $2.5 million principal payment on our Term Loan Facility; and (iii) the payment of $10.2 million in Dividends.

Previous wording

The following table shows summary cash flow information for the three months ended March 31, 2026 and 2025.

Current wording

The following table shows summary cash flow information for the six months ended June 30, 2026 and the six months ended June 30, 2025.

Previous wording

Operating activities. Our net cash provided by operating activities for the three months ended March 31, 2026 and 2025 were $9.1 million and $10.1 million, respectively. This decrease of $1.0 million was due to a change in working capital of $(6.6) million offset by an increase in net income, net of non-cash items of $5.6 million. The increase in net income, net of non-cash items was primarily attributable to: increased revenues from a higher number of health and wellness center guests on our existing fleet, expansion of our fleet by nine ships, and higher guest spend. For further discussion, see “Results of Operations”, above. The $(6.6) million change in working capital was attributable to cash outflows of $21.6 million and $15.0 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

The increase in net income, net of non-cash items was primarily attributable to: (i) increased revenues resulting 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 attributable to lower debt balances. For further discussion, see “Results of Operations” above.

Previous wording

The $21.6 million cash outflows from working capital for the three months ended March 31, 2026 was primarily driven by: (i) a payment of $7.3 million to a cruise line partner for previously accrued fees; (ii) a $6.4 million decrease in accounts payable due to the timing of vendor payments; (iii) a $5.2 million increase in inventory, reflecting increased purchases due to revenue growth and in anticipation of increased shipments in the second quarter of 2026; (iv) a $1.5 million increase in prepaid expenses resulting from the timing of various service contracts; and (v) a $1.3 million increase in accounts receivable driven by higher revenue.

Current wording

The $21.5 million cash outflow from working capital for the six months ended June 30, 2026 was primarily driven by: (i) a $10.1 million decrease in accounts payable, primarily related to the timing of vendor payments; (ii) a $5.7 million increase in accounts receivable due to higher revenues relative to the prior year period; (iii) a $2.7 million increase in prepaid expenses, primarily due to an increase in prepaid software costs; and (iv) a $2.4 million use of cash related to accrued expenses.

Previous wording

The $15.0 million cash outflows from working capital for the three months ended March 31, 2025, was primarily driven by (i) a $5.1 million net payment of bonuses to employees; (ii) a payment of $7.3 million to a cruise line partner related to accrued fees, and (iii) 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.

Current wording

The $23.1 million cash outflows from working capital for the six months ended June 30, 2025 was primarily driven by (i) a $9.7 million increase in Inventories, reflecting increased purchases due to revenue growth and in anticipation of increased shipments in the third quarter of 2025; (ii) an $8.5 million use of cash related to Accrued expenses; (iii) a $3.2 million increase in Other non-current assets primarily reflecting capitalized contract costs paid to enter into new contracts or to renew long-term contracts; and (iv) a $1.9 million payment for income taxes.

Previous wording

Investing activities. Our net cash used in investing activities for the three months ended March 31, 2026 and 2025 were $3.0 million and $1.7 million, respectively. The increase in cash used was driven by continued investments in technology hardware and software, including artificial intelligence, partially offset by $1.3 million in proceeds received from the divestiture of two immaterial subsidiaries previously disclosed in our 2025 Form 10-K.

Current wording

Investing activities. Our net cash used in investing activities for the six months ended June 30, 2026 and 2025 was $5.3 million and $4.4 million, respectively. The increase in cash used was primarily driven by continued investments in technology hardware and software, including artificial intelligence, partially offset by $1.3 million in proceeds received from the divestiture of two immaterial subsidiaries previously disclosed in our 2025 Form 10-K.

Previous wording

Financing activities. Our net cash used in financing activities for the three months ended March 31, 2026 and 2025 were $(6.3) million and $(43.3) million, respectively. For the three months ended March 31, 2026, the Company repaid $1.3 million on the Term Loan Facility and paid dividends of $5.1 million. For the three months ended March 31, 2025, the Company utilized $37.9 million to repurchase 2,094,000 of our common shares, repaid $1.3 million on the Term Loan Facility and paid dividends of $4.2 million.

Current wording

Financing activities. Our net cash used in financing activities for the six months ended June 30, 2026 and 2025 was $13.0 million and $48.7 million, respectively. For the six months ended June 30, 2026, the Company utilized $0.4 million to repurchase 16,134 of our common shares, repaid $2.5 million on the Term Loan Facility and paid Dividends of $10.2 million. For the six months ended June 30, 2025, the Company utilized $37.9 million to repurchase 2,094,000 of our common shares, repaid $2.5 million on the Term Loan Facility and paid Dividends of $8.3 million.

Previous wording

As of March 31, 2026, our net future contractual obligations have not changed significantly from the amounts disclosed in our 2025 Form 10-K.

Current wording

As of June 30, 2026, our future contractual obligations have not changed significantly from the amounts disclosed in our 2025 Form 10-K.

Previous wording

Our critical accounting policies are included in our 2025 Form 10-K. We believe that there have been no significant changes during the three months ended March 31, 2026 to the critical accounting policies disclosed in our 2025 Form 10-K.

Current wording

Our critical accounting policies are included in our 2025 Form 10-K. We believe that there have been no significant changes during the six months ended June 30, 2026 to the critical accounting policies disclosed in our 2025 Form 10-K.