OneSpaWorld Holdings Limited

Good day and welcome to the One Spa World first quarter 2025 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Allison Malkin of ICR. Please go ahead.

Thank you. Good morning, and welcome to One Spell World's first quarter 2025 earnings column webcast. Before we begin, I'd like to remind you that certain statements and information made available on today's column webcast may be deemed to constitute forward-looking statements. These forward-looking statements reflect our judgment and analysis, only as of today, and actual results may differ materially from current expectations based on a number of factors affecting our business. Accordingly, you should not place undue reliance on these forward-looking statements. For a more thorough discussion of the risks and uncertainties associated with the forward-looking statements to be made in this conference call and webcast, We refer you to the disclaimer regarding forward-looking statements that is included in our first quarter 2025 earnings release, which was furnished to the SEC today on form 8 . We do not undertake any obligation to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise. In addition, the company may refer to certain adjusted non-GAAP metrics on this call. An explanation of these metrics can be found in our earnings release issued earlier this morning. Joining me today are Leonard Flexman, Executive Chairman and Chief Executive Officer, and Steven Lazarus, President, Chief Operating Officer, and Chief Financial Officer. Leonard will begin with a review of our first quarter 2025 performance and provide an update on our key priorities. Then Stephen will provide more details on the financials and guidance. Following our prepared remarks, we will turn the call over to the operator to begin the question and answer portion of the call. I would now like to turn the call over to Leonard.

Thank you. Thank you, Alison. Good morning and welcome to One Spa World's first quarter 2025 earnings conference call. It is a pleasure to speak to you today and share a strong start to the year, which continues the sustained positive momentum in our business into 2025. Our team delivered first quarter results at the high end of our guidance with our performance reflecting the impact of our mission to invest in our cruise line and destination resort partnerships, continuously innovate our guest experiences, and enhance our productivity and profitability across our business. This led to increases across all key operating metrics during the quarter, the addition of new ships to our fold, and new agreements with longstanding partners. As outlined in our earnings release issued earlier this morning, based on our performance and with continued positive momentum, we remain confident in our ability to navigate the increasingly dynamic economic environment which is reflected in our reaffirmation of our annual guidance. In addition to our strategic growth drivers, our cruise line partners continue to experience strong bookings and onboard spend, and consumers continue to prioritize experiences with cruising, a value alternative to other vacation choices. Turning to the highlights of the quarter, total revenues increased 4% to $219.6 million compared to $211.2 million in the first quarter of 2024. Income from operations of $16.8 million included $2.5 million of non-recurring severance expense and compared to $17 million in the first quarter of 2024. And adjusted EBITDA increased 5% to $26.6 million which included $1.1 million of non-recurring cash severance expense and compared to $25.3 million in the first quarter of 2024. At quarter end, we operated health and wellness centers on 199 ships with an average ship count of 193 for the quarter. This compares with a total of 193 ships and an average ship count of 188 ships at the end of the first quarter of fiscal 2024. Also at quarter end, we had 4,240 cruise ship personnel on vessels compared with 4,082 cruise ship personnel on vessels at the end of first quarter of fiscal 2024. The quarter marked meaningful progress and our key priorities. Let me share some of those highlights with you. First, we captured highly visible new ship growth with current cruise line partners and added new cruise line partnerships to our fold. In support of this priority, we introduced a new health and wellness center on Norwegian Cruise Line's first Prima Plus class ship, Norwegian Aqua, in the first quarter and remain on track to introduce health and wellness centers on an additional eight new ships commencing voyages later this year. In addition, following quarter end, we executed a new agreement to operate health and wellness centers on 11 ships for P&O Cruise Lines and Cunard, which recognizes our strong performance and continues our longstanding partnerships. Second, we continue to expand high-value services and products. These higher-value services, including MediSpa, IV therapy, and acupuncture, to name a few, help to grow sales productivity as we introduce these services to more ships and expand offerings with latest innovations. To this end, the quarters saw us elevate the innovation in our MediSpar services with the continued rollout of next generation technology with Samaj, FLX, and CoolSculpting Elite, which offer improved results and reduced treatment time by up to 50%. These new technologies generated over 20% growth for these treatments in Q1 versus last year. In addition, acupuncture remains a sought-after service with strong adoption of LED light therapy as a high-conversion add-on treatment. At quarter end, MediSpar services were available on 148 ships up from 142 ships at the end of the 2024 first quarter. We continue to expect to have MediSpar offerings 151 ships this year. Third, we focused on enhancing health and wellness center productivity. This is best reflected in the delivery across the board growth in key operating metrics, including revenue per passenger per day, weekly revenue, pre-cruise revenue, and revenue per staff per day, which are driven by one, staff retention, which remains a key contributor to our consistent gains in operating metrics, as experienced team members are driving incremental revenue through more effective customer recommendations. We continue to invest in best-in-class training and have recently redesigned our talent management process to further support productivity and long-term growth in our operating metrics. Our enhanced sales training continues to feel increases in the number of guests using the spa, service frequency, service spend, and retail and average spend per guest. Additionally, pre-booking revenue as a percentage of revenues remains strong at 23%. During the quarter, we introduced pre-booking on the Virgin Voyages fleet of three vessels. And fourth, we enhanced our capital structure and strengthened our balance sheet again. In recognition of our strong competitive and financial position in our consistent free cash flow generation, our board of directors approved a new 75 million share repurchase program, extending our prior 50 million share repurchase program that we substantially completed in the first quarter. Together with our quarterly cash dividend, this program demonstrates our commitment to enhance shareholder value through our enterprise growth and capital allocation strategies. As we look ahead, we are experiencing favorable trends at the start of the second quarter and expect our proven operating strategies and strong competitive and financial position further buoyed by decades of long experience and the resilience of our business across economic cycles to have us poised to achieve our annual guidance. Overall, we believe we are well positioned to provide increasingly valuable services to our partners, experiences to our guests, and results for our stakeholders and shareholders in fiscal 2025 and beyond. With that, I'll turn the call over to Stephen, who will provide more details on our first quarter results and guidance.