OneSpaWorld (OSW) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 results with total revenues of $224.9M, up 12% year-over-year, and income from operations of $18.8M, up 40% year-over-year, capping a strong first half of 2024.

• Net income for Q2 2024 was $15.8M, up from a net loss of $3.2M in Q2 2023, reflecting improved operations and lower warrant-related expenses.

• Adjusted EBITDA rose 25% to $27.1M year-over-year.

• Board authorized an annual cash dividend program, with an initial $0.04/share quarterly dividend, reflecting robust cash flow and business confidence.

• Increased FY2024 revenue guidance to $870–$890M and Adjusted EBITDA guidance to $102–$108M.

Financial highlights

• Q2 2024 total revenues rose 12% year-over-year to $224.9M, with service revenues at $180.8M (up 11%) and product revenues at $44.0M (up 18%).

• Income from operations increased 40% to $18.8M compared to Q2 2023.

• Adjusted net income for Q2 was $21.7M ($0.20/share), up from $15.0M ($0.15/share) in Q2 2023.

• Unlevered after-tax free cash flow for Q2 was $23.8M, up 18% year-over-year, with an 88% conversion rate.

• Cost of services and products increased in line with higher revenues; cost of services up 10%, cost of products up 15% year-over-year.

Outlook and guidance

• FY2024 revenue guidance raised to $870–$890M (from $860–$880M); Adjusted EBITDA guidance to $102–$108M (from $95–$105M).

• Q3 2024 revenue expected at $235–$240M and Adjusted EBITDA at $27–$29M.

• Management expects continued positive cash flow from operations and sufficient liquidity to meet capital requirements and debt covenants for the next twelve months and beyond.

• Expect to end 2024 operating on 198 cruise ships and 52 resorts.

• $50M share repurchase program authorized in April 2024.