ONESPAWORLD HOLDINGS Ltd

Previous wording

The number of health and wellness centers we operate on cruise ships and in destination resorts. The number of cruise ships on which we operate during each period is primarily impacted by our renewal of existing cruise ship partner agreements, introductions of new ships to service under our existing agreements, agreements with new cruise line partners, ships temporarily out of service for maintenance and repair, ships temporarily out of service undergoing enhancements to their facilities and operations, including enhancements to our health and wellness centers, ships and itineraries impacted by temporary adverse weather conditions, and ships prevented from sailing due to outbreaks of illnesses, among other factors. The number of destination resorts in which we operate during each period is primarily attributable to renewal of existing agreements with destination resort partners, certain of our health and wellness centers undergoing renovations to enhance operations, and destination resorts temporarily prevented from operating due to adverse weather conditions and outbreaks of illnesses, among other factors.

Current wording

The number of health and wellness centers we operate on cruise ships and in destination resorts. The number of cruise ships on which we operate during each period is primarily impacted by our renewal of existing cruise line partner agreements, introductions of new ships to service under our existing agreements, agreements with new cruise line partners, ships temporarily out of service for maintenance and repair, ships temporarily out of service undergoing enhancements to their facilities and operations, including enhancements to our health and wellness centers, ships and itineraries impacted by temporary adverse weather conditions, and ships prevented from sailing due to outbreaks of illnesses, among other factors. The number of destination resorts in which we operate during each period is primarily attributable to renewal of existing agreements with destination resort partners, certain of our health and wellness centers undergoing renovations to enhance operations, and destination resorts temporarily prevented from operating due to adverse weather conditions and outbreaks of illnesses, among other factors.

Previous wording

The size and offerings of new health and wellness centers. We have focused on innovating and implementing higher value added and price point services such as medi-spa and advanced facial techniques, which require treatment rooms equipped with specific equipment and staff trained to perform these services. As our cruise line partners continue to invest in new ships and enhancing existing vessels with enhanced health and wellness centers that allow for more advanced treatment rooms and larger staff sizes, we are able to increase the availability of these services, driving an overall shift towards a more profitable service mix.

Current wording

The size and offerings of new and enhanced health and wellness centers. We have focused on innovating and implementing higher value added and price point services such as medi-spa and advanced facial techniques, which require treatment rooms equipped with specific equipment and staff trained to perform these services. As our cruise line partners continue to invest in new ships and optimize existing vessels with enhanced health and wellness centers that allow for more advanced treatment rooms and larger staff sizes, we are able to increase the availability of these services, driving an overall shift towards a more profitable service mix.

Previous 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.

Current wording

Revenues. Total revenues increased 7% to $276.5 million compared to $258.5 million in the third quarter of 2025, driven by a 3.3% increase in average guest spend, fleet expansion due to 2026 vessel newbuilds, and higher volumes, primarily reflecting a 1.8% increase in revenue days net of 2026 fleet expansion and an increase in guest count, contributing $8.2 million, $7.0 million and $4.3 million, respectively, to the increase in total revenues for the period. Contributing to the increased volume and spend was $6.9 million in increased pre-booked revenues at health and wellness centers included in our ship count as of September 30, 2026. Growth in our maritime total revenues was partially offset by a $1.4 million decrease in our destination resorts total revenues, due in part 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, which decreased product revenues by $1.3 million.

Previous wording

The break-down of revenue growth between service and product revenues was as follows:

Current wording

The breakdown of revenue growth between service and product revenues was as follows:

Previous wording

Product revenues. Product revenues for the three months ended June 30, 2026 were $46.8 million, a decrease of $0.5 million, or (1)%, compared to $47.4 million for the three months ended June 30, 2025.

Current wording

Product revenues. Product revenues for the three months ended September 30, 2026 were $50.2 million, a decrease of $0.3 million, or (1)%, compared to $50.5 million for the three months ended September 30, 2025.

Previous 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.

Current wording

Cost of services. Cost of services for the three months ended September 30, 2026 was $184.3 million, an increase of $12.2 million, or 7%, compared to $172.1 million for the three months ended September 30, 2025. The increase was primarily attributable to costs associated with increased Service revenues of $226.4 million in the quarter from our operating health and wellness centers at sea and on land, compared with Service revenues of $208.0 million in the third quarter of 2025.

Previous 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.

Current wording

Cost of products. Cost of products for the three months ended September 30, 2026 was $42.6 million, a decrease of $0.3 million, or (1)%, compared to $42.9 million for the three months ended September 30, 2025. The decrease was primarily attributable to costs associated with decreased Product revenues of $50.2 million in the quarter from our operating health and wellness centers at sea and on land, compared to Product revenues of $50.5 million in the third quarter of 2025.

Previous 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.

Current wording

Administrative. Administrative expenses for the three months ended September 30, 2026 were $7.0 million, an increase of $2.4 million, or 52%, compared to $4.6 million for the three months ended September 30, 2025. The increase was primarily due to $2.1 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

Salaries, benefits and payroll taxes. Salaries, benefits and payroll taxes were $8.8 million for both the three months ended June 30, 2026 and 2025. The consistency reflects a reduction in internal personnel costs during the three 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.

Current wording

Salaries, benefits and payroll taxes. Salaries, benefits and payroll taxes for the three months ended September 30, 2026 were $8.7 million, an increase of $0.3 million, or 4%, compared to $8.4 million for the three months ended September 30, 2025. The increase was primarily attributable to annual merit increases and higher incentive-based compensation, partially offset by a reduction in internal personnel costs resulting from the transition of certain management and logistics services to third-party providers.

Previous 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.

Current wording

Interest expense, net. Interest expense, net was $1.2 million for the three months ended September 30, 2026, compared to $1.4 million for the three months ended September 30, 2025. The decrease was primarily due to a $15.0 million reduction in the principal balance of the Term Loan Facility since September 30, 2025, including $13.8 million of voluntary prepayments during the nine months ended September 30, 2026, of which $11.3 million was prepaid in the third quarter of 2026, which satisfied all remaining scheduled amortization prior to maturity.

Previous wording

Net income. Net income for the six months ended June 30, 2026 was $44.5 million, an increase of $9.3 million, or 27%, compared to net income of $35.2 million for the six months ended June 30, 2025. This increase was primarily attributable to an $8.4 million improvement in operating income, a $0.6 million decrease in income tax expense, and a $0.3 million decrease in interest expense, net.

Current wording

Net income. Net income for the three months ended September 30, 2026 was $28.2 million, an increase of $3.9 million, or 16%, compared to a net income of $24.3 million for the three months ended September 30, 2025. This increase was primarily attributable to a $3.6 million improvement in operating income and a $0.2 million decrease in interest expense, net, as discussed above.

Previous wording

Revenues. Total revenues increased 11% to $508.9 million compared to $460.4 million for the six months ended June 30, 2025, driven by a 4% increase in revenue days, a 2% increase in average guest spend, and fleet expansion, contributing $37.6 million, $7.7 million and $6.0 million, respectively, to the increase in Total revenues, of which $10 million was attributable to increased pre-booked revenues at health and wellness centers included in our ship count as of June 30, 2026. This was offset by a $2.5 million decrease in our land-based spa business, partially due to the closure of hotels where we had previously operated.

Current wording

Revenues. Total revenues increased 9% to $785.4 million compared to $718.9 million for the nine months ended September 30, 2025, driven by a 1.9% increase in average guest spend, fleet expansion due to 2026 vessel newbuilds, and higher volumes, primarily reflecting a 3.0% increase in revenue days net of 2026 fleet expansion and an increase in guest count, contributing $15.9 million, $13.0 million and $41.9 million, respectively, to the increase in total revenues for the period. Contributing to the increased volume and spend was $17.0 million in increased pre-booked revenues at health and wellness centers included in our ship count as of September 30, 2026. Growth in our maritime total revenues was partially offset by a $3.9 million decrease in our destination resorts total revenues, due in part to the closure of hotels where we had previously operated.

Previous wording

The break-down of revenue between service and product revenues was as follows:

Current wording

The breakdown of revenue growth between service and product revenues was as follows:

Previous wording

Service revenues. Service revenues for the three months ended June 30, 2026 were $214.4 million, an increase of $21.1 million, or 11%, compared to $193.4 million for the three months ended June 30, 2025.

Current wording

Service revenues. Service revenues for the nine months ended September 30, 2026 were $644.4 million, an increase of $64.5 million, or 11%, compared to $579.9 million for the nine months ended September 30, 2025.

Previous wording

Cost of services. Cost of services for the six months ended June 30, 2026 were $345.2 million, an increase of $35.8 million, or 12%, compared to $309.4 million for the six months ended June 30, 2025. The increase was primarily attributable to costs associated with increased Service revenues of $418.1 million in the six months ended June 30, 2026 from our operating health and wellness centers at sea and on land, compared with Service revenues of $371.9 million in the six months ended June 30, 2025.

Current wording

Cost of services. Cost of services for the nine months ended September 30, 2026 was $529.5 million, an increase of $48.0 million, or 10%, compared to $481.5 million for the nine months ended September 30, 2025. The increase was primarily attributable to costs associated with increased Service revenues of $644.4 million in the nine months ended September 30, 2026 from our operating health and wellness centers at sea and on land, compared with Service revenues of $579.9 million in the nine months ended September 30, 2025.

Previous wording

Cost of products. Cost of products for the six months ended June 30, 2026 were $77.6 million, an increase of $2.3 million, or 3%, compared to $75.3 million for the six months ended June 30, 2025. The increase was primarily attributable to costs associated with increased Product revenues of $90.8 million in the six months ended June 30, 2026 from our operating health and wellness centers at sea and on land, compared to Product revenues of $88.5 million in the six months ended June 30, 2025.

Current wording

Cost of products. Cost of products for the nine months ended September 30, 2026 was $120.2 million, an increase of $2.0 million, or 2%, compared to $118.1 million for the nine months ended September 30, 2025. The increase was primarily attributable to costs associated with increased Product revenues of $141.0 million in the nine months ended September 30, 2026 from our operating health and wellness centers at sea and on land, compared to Product revenues of $139.0 million in the nine months ended September 30, 2025.

Previous wording

Administrative. Administrative expenses for the six months ended June 30, 2026 were $13.4 million, an increase of $4.8 million, or 55%, compared to $8.6 million for the six months ended June 30, 2025. The increase was primarily due to $3.9 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.

Current wording

Administrative. Administrative expenses for the nine months ended September 30, 2026 were $20.3 million, an increase of $7.2 million, or 54%, compared to $13.2 million for the nine months ended September 30, 2025. The increase was primarily due to $6.0 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

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.

Current wording

Salaries, benefits and payroll taxes. Salaries, benefits and payroll taxes for the nine months ended September 30, 2026 were $25.9 million, a decrease of $2.3 million, or (8)%, compared to $28.2 million for the nine months ended September 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 nine months ended September 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

Amortization of intangible assets. Amortization expense was $8.1 million and $8.3 million for the six-month periods ended June 30, 2026 and 2025, respectively.

Current wording

Amortization of intangible assets. Amortization expense was $12.2 million and $12.4 million for the nine-month periods ended September 30, 2026 and 2025, respectively.

Previous wording

Interest expense, net. Interest expense, net was $2.2 million for the six months ended June 30, 2026, compared to $2.5 million for the six 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.

Current wording

Interest expense, net. Interest expense, net was $3.4 million for the nine months ended September 30, 2026, compared to $3.9 million for the nine months ended September 30, 2025. The decrease was primarily due to a $15.0 million reduction in the principal balance of the Term Loan Facility since September 30, 2025, including $13.8 million of voluntary prepayments during the nine months ended September 30, 2026, which satisfied all remaining scheduled amortization prior to maturity.

Previous 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.

Current wording

Net income. Net income for the nine months ended September 30, 2026 was $72.8 million, an increase of $13.2 million, or 22%, compared to net income of $59.6 million for the nine months ended September 30, 2025. This increase was primarily attributable to a $12.1 million improvement in operating income, a $0.7 million decrease in income tax expense, and a $0.5 million decrease in interest expense, net, as discussed above.

Previous 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.

Current wording

We fund our operations principally with cash flow from operations. Our principal uses for our liquidity during the nine months ended September 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) $37.5 million of share repurchases, which completed the 2025 Share Repurchase Program; (iii) $13.8 million in voluntary prepayments on our Term Loan Facility; and (iv) the payment of $15.2 million in dividends.

Previous wording

We have concluded that our existing cash and available credit facilities, combined with cash flow from operations, will be sufficient to satisfy our existing and planned capital requirements and to comply with all debt covenants as required by our debt agreements over the next twelve months and for the foreseeable future beyond that period. Additional information regarding our Revolving Facility, letter of credit capacity, and debt covenants is included in the notes to our consolidated financial statements.

Current wording

As of September 30, 2026, we had $48.8 million available under the Revolving Facility, net of a $1.2 million outstanding standby letter of credit, and no borrowings outstanding. We have concluded that our existing cash and available credit facilities, combined with cash flow from operations, will be sufficient to satisfy our existing and planned capital requirements and to comply with all debt covenants as required by our debt agreements over the next twelve months and for the foreseeable future beyond that period. Additional information regarding our Revolving Facility, letter of credit capacity, and debt covenants is included in the notes to our condensed consolidated financial statements.

Previous 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.

Current wording

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

Previous wording

Operating activities. Net cash provided by operating activities was $42.4 million and $30.4 million for the six months ended June 30, 2026 and 2025, respectively, an increase of $12.0 million. This increase was due to a $10.4 million increase in net income, net of non-cash items, and a $1.6 million favorable change in working capital.

Current wording

Operating activities. Net cash provided by operating activities was $88.2 million and $63.6 million for the nine months ended September 30, 2026 and 2025, respectively, an increase of $24.6 million. This increase was due to a $14.8 million increase in net income, net of non-cash items, and a $9.8 million favorable change in working capital.

Previous wording

The $1.6 million favorable change in working capital reflected cash outflows of $21.5 million and $23.1 million for the six months ended June 30, 2026 and 2025, respectively.

Current wording

The $9.8 million favorable change in working capital reflected cash outflows of $13.4 million and $23.1 million for the nine months ended September 30, 2026 and 2025, respectively.

Previous 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.

Current wording

The $13.4 million cash outflow from working capital for the nine months ended September 30, 2026 was primarily driven by: (i) a $4.0 million increase in other current assets, primarily related to estimated income tax payments and the timing of collections of other receivables; (ii) a $5.6 million increase in other non-current assets, primarily reflecting capitalized contract costs paid to enter into new contracts or to renew long-term contracts; (iii) a $2.6 million increase in accounts receivable due to higher revenues relative to the prior year period; (iv) a $2.0 million increase in prepaid expenses, primarily due to an increase in prepaid software costs; and (v) a $1.2 million increase in inventories, reflecting increased purchases due to revenue growth and in anticipation of increased shipments in the fourth quarter of 2026. These outflows were partially offset by a $2.7 million increase in accrued expenses, primarily related to the timing of payments, including accrued contract costs for new long-term agreements. The remaining changes in working capital, including accounts payable, contributed an additional $0.7 million net use of cash.

Previous 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.

Current wording

Investing activities. Our net cash used in investing activities for the nine months ended September 30, 2026 and 2025 was $7.0 million and $10.0 million, respectively. The decrease in cash used was primarily driven by lower capital expenditures of $8.8 million, compared to $10.0 million in the prior year period, as we continued to invest in technology hardware and software, including artificial intelligence, and $1.8 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 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.

Current wording

Financing activities. Our net cash used in financing activities for the nine months ended September 30, 2026 and 2025 was $66.5 million and $81.7 million, respectively. For the nine months ended September 30, 2026, the Company utilized $37.5 million to repurchase 1,428,708 shares of our common stock, made $13.8 million in voluntary prepayments on the Term Loan Facility and paid dividends of $15.2 million. For the nine months ended September 30, 2025, the Company utilized $55.5 million to repurchase 2,910,000 shares of our common stock, repaid $13.8 million on the Term Loan Facility and paid dividends of $12.4 million.

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 six months ended June 30, 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 nine months ended September 30, 2026 to the critical accounting policies disclosed in our 2025 Form 10-K.