• Total Revenue (Q4 2024): $217.2 million, up 11% from $194.8 million in Q4 2023.
• Total Revenue (Fiscal Year 2024): $895 million, up 13% from $794 million in fiscal year 2023.
• Income from Operations (Q4 2024): $17.2 million, up 37% from $12.6 million in Q4 2023.
• Income from Operations (Fiscal Year 2024): $78.1 million, up 44% from $54.2 million in fiscal year 2023.
• Adjusted EBITDA (Q4 2024): $26.7 million, up 14% from $23.4 million in Q4 2023.
• Adjusted EBITDA (Fiscal Year 2024): $112.1 million, up 26% from $89.2 million in fiscal year 2023.
• Net Income (Q4 2024): $14.4 million, compared to a net loss of $7.3 million in Q4 2023.
• Adjusted Net Income (Q4 2024): $21.4 million, compared to $12.5 million in Q4 2023.
• Cash at Year End 2024: $58.6 million.
• Debt at Year End 2024: Reduced to $100 million from $158.2 million at year-end 2023.
• Ship Count at Year End 2024: 199 ships, up from 193 ships at year-end 2023.
• Cruise Ship Personnel at Year End 2024: 4,352 personnel, up from 4,120 at year-end 2023.
• Medi-spa Services: Available on 147 ships, up from 139 ships at the end of fiscal year 2023.
• Share Repurchase Program: $38.7 million remaining on the $50 million program.
• Fiscal Year 2025 Revenue Guidance: $950 million to $970 million.
• Fiscal Year 2025 Adjusted EBITDA Guidance: $115 million to $125 million.

• Warning! GuruFocus has detected 6 Warning Signs with CRK.

Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• OneSpaWorld Holdings Ltd (NASDAQ:OSW) reported a strong financial performance for fiscal 2024, with total revenues increasing by 13% to a record $895 million.
• Income from operations increased by 44% to $78.1 million, showcasing significant operational efficiency.
• The company expanded its health and wellness services, adding 7 new maritime health and wellness centers and entering a new seven-year agreement with Royal Caribbean International and Celebrity Cruises.
• Adjusted EBITDA increased by 26% to a record $112.1 million, indicating strong profitability.
• OneSpaWorld Holdings Ltd (NASDAQ:OSW) enhanced its capital structure by reducing debt to $100 million and initiating a quarterly cash dividend payment and share repurchase program.

Negative Points

• The company's service gross margin expansion was less than expected, indicating potential challenges in cost management.
• Despite strong revenue growth, the company expects flat margin profiles for fiscal 2025, suggesting limited margin expansion opportunities.
• The company faces limitations in expanding Medi-spa services due to real estate constraints on ships.
• The first quarter of fiscal 2025 is expected to be negatively impacted by one less operating day and a higher number of dry docks, affecting revenue by approximately $4.3 million.
• The market reacted negatively to the earnings release, indicating potential investor concerns or unmet expectations.

Q & A Highlights

Q: Leonard, did you say that same spa revenue is up more than 30%? Can you talk about the factors driving this increase? A: Yes, Medispa has been a significant focus for us, contributing to the 30% year-over-year growth in same spa revenue. This growth is driven by higher ticket prices and increased volume. We are adding more staff, including doctors and nurses, to meet demand, which we expect to continue growing in 2025.

Q: On the services gross margin, the expansion year-over-year was less than recently seen. Are we in a more normalized run rate for that gross margin on services? A: There is nothing weighing down the gross margin. The fourth quarter saw less total revenue than the third quarter, which affected the flow-through covering fixed costs. However, there is nothing fundamental affecting the decrease in the fourth quarter.

Q: Why is there no expected margin expansion in 2025 despite opportunities like higher pre-booking activity? A: We are comfortable with a flat margin profile as we have not built in any pricing changes into our current numbers. Our focus is on absolute dollar generation, and maintaining margin is satisfactory at this point. There are no headwinds on the cost side.

Q: How are you balancing dividend growth versus share repurchases, especially with market reactions to your release? A: We evaluate stock buybacks based on price and have an algorithm to guide us. We have a substantial amount left on our authorization for buybacks and will continue to utilize it. The dividend is in place, and we expect to grow it over the next few years.

Q: Can you provide more detail on the impact of dry docks and the leap year on your first-quarter outlook? A: The combination of dry docks and the leap year is expected to negatively impact total revenue in the first quarter by approximately $4.3 million. We did not provide a specific breakout between the day and the dry docks.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.