OneSpaWorld (NASDAQ:OSW) reported what management called a record fourth quarter to close fiscal 2025, citing continued growth across its maritime health and wellness centers, ongoing expansion of higher-value services, and early progress on artificial intelligence initiatives aimed at improving revenue and operating efficiency.
Record quarter caps fourth straight year of growth
Executive Chairman and CEO Leonard Fluxman said the fourth quarter “capped a year of exceptional performance,” driven by innovation across the company’s global operating platform and execution for cruise line and destination resort partners. Management highlighted 19 consecutive quarters of year-over-year growth and a fourth consecutive year of record total revenue and adjusted EBITDA.
Ship builds, MedSpa expansion, and productivity initiatives
Management pointed to continued momentum from new ship growth with existing cruise partners. During the quarter, OneSpaWorld introduced two new health and wellness centers aboard new ship builds, Disney Destiny and Star Seeker, bringing total ship builds to eight for the year. Looking ahead, Fluxman said the company expects to introduce health and wellness centers on six new ship builds in 2026, with three expected to commence voyages in the first half of the year.
The company also emphasized its focus on expanding higher-value services and products, including Medi-Spa and acupuncture. Fluxman said OneSpaWorld continued to roll out new MedSpa technologies such as Morpheus8, FLX CoolSculpting Elite, and Acupuncture LED, which he said offer improved results and reduce treatment time by up to 50%. According to management, these technologies generated between 23% and 40% revenue growth in the fourth quarter versus the prior year, and LED light therapy with acupuncture has remained a “high conversion add-on.”
At year-end, MedSpa services were available on 153 ships, up from 147 ships at the end of fiscal 2024. The company expects to have MedSpa offerings on 157 ships by year-end 2026.
Productivity gains were another focus, with Fluxman citing increases in several operating metrics including revenue per passenger per day, weekly revenue, pre-cruise revenue, and revenue per staff per day. He also said onboard employee initiatives helped drive a four percentage point increase in staff retention versus 2024, noting that more experienced staff generate higher revenue per day than first-contract staff.
AI initiatives focus on pricing, utilization, and efficiency
President, COO, and CFO Stephen Lazarus said the company has invested in “breakthrough technology applications” and described several AI-related initiatives. He said OneSpaWorld has implemented a machine learning algorithmic engine intended to improve revenue and utilization, and has begun work on a “true dynamic price optimization model” for pre-booking.
Lazarus noted the company has more than 11,500 itineraries open for pre-booking and said this volume makes it “virtually impossible” to manage true dynamic pricing solely with humans. In response to an analyst question, management said the first implementation of dynamic pricing optimization will begin with pre-booking and initially cover about 94% of vessels on the pre-booking platform. Lazarus said a broader rollout would follow, but described the effort as still in early stages and suggested timing that extends “into the back half of the year.”
On the cost and efficiency side, Lazarus said the rollout of an onboard virtual assistant has shown early success by helping managers respond to questions quickly and reducing help desk hours. He said 80% of questions are answered within seconds, and the tool has been deployed across 180 vessels, up from 40 vessels in the third quarter.
Asked about the potential financial impact and timing of AI benefits, management said it remains on track to provide more specificity after second-quarter results, and confirmed that fiscal 2026 guidance does not include potential impact from these initiatives.
Financial results reflect revenue growth, restructuring, and impairment charges
For the fourth quarter, Lazarus reported total revenue increased 11% to $242.1 million compared with $217.2 million in the prior-year period. He attributed the increase primarily to fleet expansion from 2025 new ship builds, a 2% increase in revenue days, and a 1% increase in average guest spend. Lazarus also said $2.8 million of the increase was attributable to increased guest spend from pre-booked services.
Maritime revenue growth was partially offset by a $1.3 million decline in destination resorts revenue, which Lazarus said was partly due to the closure of hotels where the company had previously operated.
Net income for the quarter was $12.1 million, or $0.12 per diluted share, compared with $14.4 million, or $0.14 per diluted share, a year earlier. Lazarus said the decrease was primarily due to $5.7 million of restructuring expenses and long-lived asset impairment charges, partially offset by a $4.4 million improvement in income from operations. Adjusted net income was $24.2 million, or $0.24 per diluted share, compared with $21.4 million, or $0.20 per diluted share, in the prior-year quarter. Adjusted EBITDA rose to $31.2 million from $26.7 million.
Restructuring expenses totaled $2.7 million in the quarter related to reorganizing operations in the United Kingdom and Italy and exiting land-based resort health and wellness operations in Asia. Long-lived asset impairment was $3.0 million, including a $2.8 million impairment charge tied to exiting resort operations in Asia, with $2.2 million attributable to intangible assets and $600,000 to property and equipment and right-of-use assets. Lazarus also cited a $0.3 million non-recurring inventory write-off related to the Asia exit.
For fiscal 2025, total revenue increased 7% to $961.0 million. Adjusted net income rose 15% to $102.9 million, or $0.99 per diluted share, and adjusted EBITDA increased 10% to $123.3 million.
Lazarus said year-end cash was $17.5 million, reflecting quarterly dividend payments totaling $17.5 million during the year, $75.4 million used to repurchase 3.9 million shares, and a $15 million term loan payment. The company had full availability under a $50 million revolving credit line, for total liquidity of $67.5 million. Total debt net of deferred financing costs was $84.0 million at December 31, 2025, down from $98.6 million a year earlier. The company also had $37.5 million remaining under its prior $75 million share repurchase authorization.
2026 outlook: revenue expected to exceed $1 billion
Management reaffirmed its fiscal 2026 outlook and said it expects total revenue to exceed $1 billion for the first time. The company guided for fiscal 2026 total revenue of $1.01 billion to $1.03 billion and adjusted EBITDA of $128 million to $138 million, with Lazarus describing both as high single-digit increases at the midpoint versus fiscal 2025 results, excluding revenue tied to exited and reorganized operations.
For the first quarter of 2026, OneSpaWorld expects total revenue of $241 million to $246 million and adjusted EBITDA of $30 million to $32 million. Lazarus noted that exited and reorganized revenue contributed $5.3 million to first-quarter 2025 revenue and $23 million to full-year 2025 revenue.
On consumer trends, management said the company saw some softness in November of the prior year, but did not see it recur in December. Lazarus added that year-to-date the company is seeing “overall higher prices being accepted by the consumer,” and said that while there may be slightly additional discounting, the net price remains higher.
Management also discussed pricing strategy, noting that the company effectively did not take service price increases in 2025, and said it continues to evaluate opportunities in 2026. Lazarus said guidance currently does not assume any service price increases.
In response to a question about onboard menus, management said it proactively condensed spa menus to emphasize the most popular offerings and to steer demand toward specific price points and time slots, with a particular focus on increasing conversion into higher treatment rates and higher retail attachment.
About OneSpaWorld (NASDAQ:OSW)
OneSpaWorld Holdings Ltd is a global provider of spa and wellness services, catering primarily to the cruise line, hospitality and venue-based leisure industries. The company designs and operates on-board spa facilities, salon services and retail boutiques, offering treatments such as massage, facial and body therapies, nail care, hair styling and aesthetic enhancements. Additionally, OneSpaWorld provides program consulting, management, training and product distribution services to its partners, enabling tailored spa experiences across diverse passenger and guest demographics.
OneSpaWorld’s core operations span major cruise lines—such as Carnival Corporation, Royal Caribbean Group, MSC Cruises and Virgin Voyages—as well as luxury resort and hotel brands.
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