OneSpaWorld (OSW 4.62%), a leading global operator of health and wellness centers at sea and on land, reported its financial results on July 30, 2025. The company's GAAP revenue of $240.7 million surpassed analyst expectations of $237.9 million, while Non-GAAP earnings per share came in at $0.25, ahead of the $0.24 consensus estimate. Adjusted EBITDA reached $30.5 million, up 13.0% from a year earlier. The period showed steady expansion in both operating profit and margin compared to the second quarter of 2024. as cruise activity and guest spending increased. On the whole, the quarter outperformed expectations, with strong results in cruise wellness services somewhat tempered by continued softness at land-based resorts.
| Metric | Q2 2025 | Q2 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.25 | $0.24 | $0.20 | 25.0% |
| Revenue (GAAP) | $240.7 million | $237.9 million | $224.9 million | 7.0% |
| Adjusted EBITDA | $30.5 million | $27.1 million | 13.0% | |
| Net Income | $19.9 million | $15.8 million | 27.0% | |
| Income from Operations | $22.1 million | $18.8 million | 17.6% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Strategic Focus
OneSpaWorld is the top provider of spa, fitness, and wellness services primarily on cruise ships, with a network of 200 ships and 51 resort locations at quarter end. The company's services include spa treatments, fitness classes, medi-spa procedures such as minimally invasive cosmetic treatments, and product retail through exclusive partnerships with leading beauty and wellness brands.
The company’s business model is asset-light, meaning its cruise partners cover most costs for building and maintaining wellness centers. This keeps capital expenditures low and helps maximize cash flow. Long-term contracts with major cruise lines, averaging five years in length, provide steady, predictable revenue. High contract renewal rates—about 97% over the last 15 years—help secure its dominant market share and recurring business base. Its success centers on its position in the growing cruise and wellness tourism sectors, strong industry relationships, and ability to innovate with new services and technology, including recent investments in artificial intelligence (AI) solutions for operations and guest experience.
Quarter Highlights: Financials and Segment Performance
During Q2 FY2025, OneSpaWorld saw revenue (GAAP) increase by 7.0% over the prior year, outpacing its own and market expectations. This top-line growth came from a 7% rise in service revenue and an 8% increase in product revenue (GAAP). Product sales represented approximately 19% of total company revenue in FY2024.
Higher activity at sea was the primary growth driver. The company added 3 new ships year over year, ending the quarter serving 200 ships, with an average ship count of 191. Shipboard staff increased 1.5% to 4,365 compared to Q2 FY2024, helping to deliver a 5.6% rise in weekly revenue per ship compared to Q2 FY2024, and a 3.8% bump in revenue per staff member per day compared to Q2 FY2024. Average guest spend on board cruise ships rose 4%, lifting total revenue by $8.5 million, while fleet expansion and higher pre-booking rates contributed further gains. The company noted that pre-booking of spa services—a key indicator of demand and revenue predictability—remained at strong levels, bolstered by a rollout with cruise partners like Virgin Voyages.
Income from operations rose 17.0% to $22.1 million, while Net income (GAAP) jumped 27.0% to $19.9 million. Adjusted EBITDA, which is a measure of operating cash flow that adds back non-cash and non-recurring charges, came in at $30.5 million. Cost increases generally tracked revenue growth, but the company reduced administrative expenses by 7% compared to the second quarter of 2024 and lowered payroll costs by 4% through reductions in incentive compensation.
The land-based resort segment was a weak point, with both resort count and average weekly revenue per resort declined compared to Q2 2024. The company ended the period with 51 destination resorts, compared to 52 in Q2 FY2024. Weekly revenue at these properties dropped from $14,028 in Q2 2024 to $13,019 in Q2 2025. Management cited hotel closures as a contributing factor to this softness, but does not expect further significant attrition in the segment this year.
Innovation in products and services was a focus, with further expansion in medi-spa offerings, now making up 8–9% of the on-board service mix as of Q1 FY2025. Medi-spa services, which include higher-value treatments, continued to see firm demand. Partnership renewals, such as a multi-year extension with Windstar Cruises and the launch of new operations with Oceania Allura, added to the company’s recurring business and network depth. AI-driven technology initiatives aimed at boosting guest experience and operational productivity were also announced.
The company's strong balance sheet enabled it to return capital to shareholders. Its cash balance was $36.2 million at the end of Q2 FY2025, down from $58.6 million as of December 31, 2024, mainly due to $37.9 million spent on share buybacks. Total debt was $96.2 million as of June 30, 2025, and available liquidity, including credit facilities, stood at $86.2 million as of June 30, 2025. Capital expenditure remained modest at $2.7 million, due to its asset-light structure. The quarterly dividend of $0.04 per share was reaffirmed, and $75 million of share repurchase authorization remained available.
Outlook and What Comes Next
OneSpaWorld raised its adjusted EBITDA guidance for FY2025 from $115–$125 million to $117–$127 million. Revenue guidance for FY2025 remains $950–$970 million, reflecting high single-digit growth. For Q3 FY2025, the company expects revenue between $255 million and $260 million, and adjusted EBITDA of $33–$35 million.
Management does not currently see signs of weaker guest demand or cruise bookings, and assumes continued strong activity in the cruise segment, with robust bookings and onboard spend reported by cruise line partners. The leadership highlighted that guidance does not assume any major deterioration in consumer behavior or macroeconomic environment. Network expansion is expected to continue via new ships coming online, maintaining the company’s dominant market share. Investors should monitor trends in guest spending, the land-based segment’s stability, and the pace of product and service innovation, as these are key to sustaining current performance levels.
OSW does pay a quarterly dividend. The quarterly dividend was reaffirmed at $0.04 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
