OneSpaWorld Holdings Limited

What they do

OneSpaWorld operates health and wellness centers, providing services and products such as spa, fitness, and aesthetic treatments, aboard cruise ships and at destination resorts under long-term agreements. The company has exclusive rights to offer these services on partner fleets, with most agreements covering an entire cruise line's existing and new ships. Cruise line relationships average over 20 years, and partners include major lines like Carnival, Royal Caribbean, Norwegian, and Celebrity. On land, it operates at resorts including Atlantis, Marriott, Hilton, and Four Seasons.

Revenue drivers

• Cruise ship operations — The primary revenue source, generated from services and product sales onboard ships under long-term agreements where the cruise line retains a percentage of sales. Average ship count was 202 in Q2 2026, up from 191 a year earlier.
• Destination resort operations — A secondary revenue source from health and wellness centers at resorts. The company ended Q2 2026 with 25 destination resort centers, with U.S. and Caribbean locations generating substantially more revenue per location than Asian ones.
• Product sales — Complementary wellness and beauty products sold onboard ships and at resorts, contributing alongside service revenue.
• New contract wins and renewals — Growth from renewing approximately 97% of contracts by ship count over 15 years and adding new partners like Adora Cruises, Aroya Cruises, and Crystal Cruises.

Recent performance

In Q2 2026, total revenues rose 9% year-over-year to a record $261.2 million, with net income up 16% to $23.2 million and Adjusted EBITDA up 13% to $34.4 million. The company ended the quarter with 208 ships (average 202) and 25 destination resorts. Fiscal 2025 revenue was $961.0 million with net income of $71.6 million and operating cash flow of $83.5 million. As of June 30, 2026, cash was $40.4 million, total liquidity was $91.6 million, and long-term debt was $81.6 million.

Strategy

Management emphasizes an asset-light model with long-term contracts that align incentives with cruise line partners, and renewal rates near 97%. The company is investing in generative and agentic AI applications to enhance operational efficiency and revenue per wellness center. It continues to expand its network, launching a center on Royal Caribbean's Legend of the Seas and expanding spa facilities on Azamara vessels. The company also returned cash to shareholders via quarterly dividends and reduced debt on its term loan facility.

Risks

• Concentration in cruise industry — Heavy reliance on cruise line partners, with most revenue from ships, means downturns in cruise demand or contract losses would materially hurt results.
• Contract renewal and retention risk — Although renewal rates are high, if a major partner does not renew or renegotiates less favorably, revenue could drop significantly.
• Asia resorts exit — The company is exiting its Asia resorts business, which contributed minimal revenue in Q2 2026 ($0.9 million) and may involve restructuring costs or disruptions.
• Operational risks at sea — Cruise ship operations face risks such as itinerary changes, ship redeployments, or health incidents that could reduce guest traffic and revenue.

Outlook

For Q3 2026, management guides total revenues of $268–273 million and Adjusted EBITDA of $35–37 million. For FY 2026, the company increased guidance to $1.018–1.038 billion in total revenues and $130–140 million in Adjusted EBITDA, implying about 10% growth at midpoints compared to fiscal 2025, excluding exited operations. Management expects this to be a fourth consecutive fiscal year of record performance, citing positive momentum and AI-driven innovations.