OneSpaWorld Holdings Ltd (OSW) Reports 33% Increase in Q3 Revenues and Raises Fiscal 2023 Guidance
OSW's Q3 revenues increased by 33% to a record $216.3 million
Income from operations rose by 72% to a record $17.0 million
Adjusted EBITDA increased by 36% to a record $24.9 million
OSW raises its fiscal 2023 revenue guidance to $792 - $797 million, up from $770 - $790 million
OneSpaWorld Holdings Ltd (NASDAQ:OSW), a leading provider of health and wellness services and products on-board cruise ships and in destination resorts, announced its financial results for the third quarter and first nine months of fiscal 2023 on November 1, 2023. The company reported a 33% increase in total revenues to a record $216.3 million, a 72% increase in income from operations to a record $17.0 million, and a 36% increase in adjusted EBITDA to a record $24.9 million compared with the third quarter of 2022.
Financial Highlights
OSW's total revenues for Q3 2023 increased by 33% to $216.3 million, compared to $162.3 million in Q3 2022. The company's income from operations rose by 72% to $17.0 million, and adjusted EBITDA increased by 36% to $24.9 million. Unlevered after-tax free cash flow also increased by $7.2 million to $24.2 million compared to $17.0 million in Q3 2022.
OSW's CFO and COO, Stephen Lazarus, highlighted the company's strong balance sheet and total liquidity of $48.0 million after repaying an additional $20.0 million on its first lien term loan. Since Q2 2022, the company has repaid a total of $69.1 million in debt instruments, thereby reducing ongoing interest expense.
Operating Network Update
OSW ended Q3 2023 with health and wellness centers on 189 ships, an increase from 176 ships in Q3 2022. The company also increased its destination resort health and wellness centers from 51 to 54. The staff count also increased to 3,927 cruise ship personnel on vessels, compared to 3,087 in Q3 2022.
Q4 2023 and Fiscal Year 2023 Guidance
OSW introduced Q4 2023 guidance for revenues of $193 - $198 million and adjusted EBITDA of $20 - $22 million. The company also increased its fiscal 2023 revenues guidance to $792 - $797 million from $770 - $790 million and adjusted EBITDA guidance to $86 - $88 million from $80 - $86 million.
Year-to-Date Performance
For the nine months ended September 30, 2023, OSW reported a 59% increase in total revenues to $599.2 million compared to $377.3 million in the same period in 2022. The company's net income was $4.3 million, compared to $55.5 million in the nine months ended September 30, 2022. Adjusted net income increased by 256% to $49.4 million, and adjusted EBITDA increased by 122% to $65.8 million.
OSW's strong Q3 performance and positive outlook for the rest of the fiscal year demonstrate the company's resilience and ability to leverage its business model and unique operating capabilities to deliver robust financial results.
Explore the complete 8-K earnings release (here) from OneSpaWorld Holdings Ltd for further details.
This article first appeared on GuruFocus.
