OneSpaWorld Holdings Limited (OSW) Earnings

Management highlights

- **Core Quarterly Performance Highlights** • Delivered 21st consecutive quarter of record total revenues and adjusted EBITDA, with total revenue up 9% YoY and adjusted EBITDA up 13% YoY • Ended the quarter operating 208 ships, with an average of 202 ships during the quarter (compared to 200 total ships and 191 average ships in Q2 2025) • Onboard staff count increased to 4,664 personnel from 4,365 in Q2 2025; staff retention reached 81%, up 4 percentage points YoY • Net income was $23.2 million ($0.23 diluted EPS) compared to $19.9 million ($0.19 diluted EPS) in Q2 2025; adjusted EBITDA hit $34.4 million, up from $30.5 million YoY • Ended the quarter with $41.6 million in cash and $91.6 million in total liquidity; returned $5.1 million to shareholders via quarterly dividend, reduced term loan debt by $1.3 million, and purchased 16,134 common shares opportunistically - **Key Strategic Growth Progress** • Secured new ship growth with existing cruise line partners: launched a new wellness center on Royal Caribbean's *Legend of the Seas* and expanded the partnership with Azamara Cruises; remains on track to launch three additional new build wellness centers in H2 2026 • Expanded higher-value Medispa offerings: these services were available on 156 ships at quarter end, up from 147 ships in Q2 2025, with a target of 159 ships by end of 2026 • Improved core productivity: all key operating metrics (revenue per passenger per day, weekly revenue, revenue per staff per day) grew; pre-book revenue grew 14% YoY and forward bookings are up 20% YoY; added Medispa and acupuncture to the pre-booking platform in late Q2 to drive further pre-book growth • Completed enterprise-wide modern ERP implementation this quarter, unifying all teams on a single platform to support AI initiatives and future efficiency gains - **AI Operational Initiatives (Live and Value-Generating)** • *Amanda (Project Shell)*: AR-powered machine learning yield optimization platform deployed across 188 vessels; delivers 4% service revenue uplift for less experienced ship managers, with 99% manager adoption; continues to be enhanced with new capabilities • *AVA*: onboard operations AI virtual assistant that autonomously resolves 96% of support tickets without human intervention; will be extended to all onboard staff with additional use cases • *Serena*: generative AI guest-facing chatbot for the e-commerce platform; handles nearly half of all sessions outside normal business hours, extending customer service capacity; new capabilities will be added to improve efficiency while maintaining service quality • Enterprise-wide AI adoption is ongoing to streamline day-to-day organizational workflows

Guidance

- Full year 2026 guidance was increased upward from prior levels: total revenue is now guided to a range of $1.018 billion to $1.038 billion, and adjusted EBITDA is guided to a range of $130 million to $140 billion, representing 10% growth at the midpoint for both metrics compared to 2025 adjusted results (exiting reorganized/exited operations), marking the fourth consecutive record fiscal year - Q3 2026 introduced guidance: total revenue in the range of $268 million to $273 million, adjusted EBITDA in the range of $35 million to $37 million - Management indicated upside to the full year guidance range could occur if current innovation initiatives accelerate or market conditions improve; current guidance already incorporates expected seasonal trends including the higher mix of lower-spending European passengers in Q3 - Average guest spend growth is expected to remain in the 1% to 2% range for the remainder of 2026, with potential for modest outperformance

Segment performance

One Spa World operates two primary business segments: Maritime (cruise ship health and wellness) and Destination Resorts. For Q2 2026, total company revenue increased 9% year-over-year to $261.2 million. Maritime segment revenue drove all net growth, with a total increase of $22 million (offsetting a $1.3 million decrease in destination resort revenue): $14.5 million of maritime growth came from a 4% increase in revenue days, $4.8 million from new ship expansion, and $2.7 million from a 1.2% increase in average guest spend, of which $4.7 million came from growth in pre-booked services. Higher-value Medispa modalities (including Dimage, TruSculpt, CoolSculpting, IV therapy, acupuncture, LED therapy) grew 17% year-over-year in Q2 2026, outpacing overall revenue growth. The Destination Resorts segment saw a $1.3 million year-over-year revenue decrease, driven by the closure of previously operated hotels and the 2025 reorganization of operations in the UK and Italy that eliminated $1 million of product revenue that was recorded in Q2 2025. Overall product revenue growth decelerated in the quarter, partially due to discounted inventory clearance associated with the UK/Italy reorganization.

Risks & headwinds

- Actual results may differ materially from forward-looking guidance due to uncertain market and operating conditions, including geopolitical tensions that could impact cruise occupancy in European itineraries - AI initiatives are still in early stages, with long-term margin and revenue impacts not yet fully quantifiable - Regulatory uncertainty currently prevents the introduction of GLP-1 and peptide weight management services, with commercial availability dependent on favorable future regulatory changes - Product revenue growth has decelerated, and continued softness could impact overall results if product segment performance does not improve - Lower occupancy on lower-yielding European itineraries could create downside pressure if current softness in European cruise demand worsens

Analyst Q&A

• Q: The full year 2026 guidance range is relatively wide despite strong YTD performance; what would push results to the low versus high end of the range, and are there any fourth quarter factors to watch? Also, are AI benefits currently weighted more to revenue than expenses, and can you quantify long-term AI margin impacts?

  A: Management increased full year guidance by $4 billion on revenue and $1 billion on EBITDA following Q2's modest beat. Upside to the high end of the range would come from faster acceleration of current innovation initiatives or better-than-expected market conditions. It is correct that near-term AI benefits are weighted more to the revenue side rather than cost reduction, as the company already operates a very lean organization. AI impacts are still too early to quantify long-term, as most active initiatives have only been live for 1-6 months, and management expects incremental benefits from ongoing innovation rather than a one-time step change in margins.

• Q: Product revenue growth has decelerated significantly even after adjusting for the UK/Italy reorganization; what is driving this deceleration, and have you accounted for higher European passenger mix (who have lower average spa spend) in Q3 guidance?

  A: Medispa product and service growth remains strong at 17% YoY, outpacing overall revenue growth, though it is still a small portion of total revenue. Deceleration in overall product revenue is partially due to discounted inventory clearance tied to the UK/Italy reorganization, which management does not view as a ongoing material issue. All expected seasonal trends, including the higher mix of lower-spending European passengers in Q3, are already incorporated into the published Q3 guidance.

• Q: Have AI initiatives been rolled out with a controlled test group to measure actual uplift, and can continued improvement be expected over time? Also, what is your expected average guest spend growth for the remainder of 2026?

  A: All AI projects are rolled out with small initial test groups to validate performance before full deployment, consistent with standard product development process. AI algorithms continuously improve by reviewing weekly performance of their own recommendations, so performance is expected to improve incrementally over time, with additional use cases like dynamic pricing expected to deliver further revenue upside. Management expects average guest spend growth to remain in the 1% to 2% range for the second half of 2026, with potential for modest outperformance.

• Q: With AI still in early stages, how do you expect long-term revenue growth and margin profile to change, and is the prior target of high single-digit revenue growth still achievable, especially with accelerating pre-book growth?

  A: It is too soon to update long-term growth targets with high conviction, as sample sizes for AI initiatives are still too small. Current revenue growth is running slightly above the historical high single-digit target, and EBITDA margin expansion is on track. Pre-booked services deliver 30% higher incremental spend per guest, and management expects pre-book penetration to increase significantly from current levels, with the recent addition of Medispa and acupuncture to the pre-booking platform expected to drive further upside.