Yahoo Finance OneSpaWorld Holdings Ltd (OSW) Exceeds Q1 Earnings Expectations and Raises Fiscal 2024 Guidance
Revenue: Reached $211.2 million, up 16% from $182.5 million in the previous year, surpassing the estimated $207.72 million.
Net Income: Reported at $21.2 million, a significant recovery from a net loss of $15.9 million in the prior year, exceeding the estimated $17.07 million.
Earnings Per Share (EPS): Achieved $0.21 per diluted share, recovering from a net loss per share of $0.17 in the previous year, surpassing the estimated $0.17.
Adjusted EBITDA: Increased by 31% to $25.3 million from $19.3 million in the previous year.
Free Cash Flow: Unlevered after-tax free cash flow rose to $24.1 million from $17.9 million, with a conversion rate of 95%.
Fiscal Year Guidance: Raised revenue forecast to $860 - $880 million from the previous range of $850 - $870 million and adjusted EBITDA forecast to $95 - $105 million from $90 - $100 million.
Share Repurchase Program: Board authorized a new $50 million share repurchase program, underscoring confidence in financial stability and future growth prospects.
OneSpaWorld Holdings Ltd (NASDAQ:OSW), a global leader in health and wellness services on cruise ships and at destination resorts, announced a strong start to fiscal 2024, surpassing analyst expectations with its first-quarter results. The company released its earnings details in its 8-K filing on May 1, 2024.
Company Overview
Headquartered in Nassau, Bahamas, OneSpaWorld operates a single segment of Maritime and Destination Resorts, offering a comprehensive suite of health, fitness, beauty, and wellness services. The company's strategic operations span across 195 cruise ships and 50 destination resorts worldwide, providing an unmatched experience in the leisure market.
Financial Performance Highlights
For the first quarter ended March 31, 2024, OneSpaWorld reported total revenues of $211.2 million, a significant increase of 16% from $182.5 million in the first quarter of 2023. This growth was driven by an increase in the average ship count and enhanced revenue-generating initiatives across its operating platforms. Income from operations saw a remarkable rise of 52%, reaching $17.0 million, compared to $11.2 million in the prior-year period. Adjusted EBITDA also grew by 31% to $25.3 million.
The company's net income turned positive, reaching $21.2 million, or $0.21 per diluted share, a substantial improvement from a net loss of $15.9 million, or $0.17 per diluted share, in the first quarter of 2023. This turnaround was primarily due to a $29.6 million positive change in the fair value of warrant liabilities, among other factors.
Strategic Developments and Operational Efficiency
Leonard Fluxman, Executive Chairman, CEO, and President of OneSpaWorld, highlighted the continuation of strong momentum from fiscal 2023, attributing the success to effective execution by the team, new partnerships, and ongoing initiatives driving organic growth. Notably, the company secured an exclusive agreement with Royal Caribbean Cruises and Celebrity Cruises, covering existing and future vessels, which is expected to significantly boost operational scale.
Fluxman also noted the strategic financial moves during the quarter, including a robust free cash flow generation that reinforced the company's balance sheet. OneSpaWorld repaid $20.0 million of its term loan and utilized $7.7 million to repurchase common shares, reflecting confidence in its financial health and future prospects.
Updated Fiscal 2024 Guidance
Encouraged by the strong first-quarter performance, OneSpaWorld has raised its revenue guidance for fiscal 2024 to $860 - $880 million, up from the previous forecast of $850 - $870 million. The company also increased its Adjusted EBITDA outlook to $95 - $105 million from $90 - $100 million. These adjustments reflect the company's positive trajectory and expected continued growth in consumer demand and operational execution.
Investor Confidence and Future Outlook
In a move underscoring its financial strength and commitment to shareholder value, OneSpaWorld's Board of Directors has approved a $50 million share repurchase program. This decision is part of a broader strategy to enhance shareholder returns, reflecting the board's confidence in the company's long-term growth trajectory and financial stability.
As OneSpaWorld continues to expand its operational footprint and enhance its service offerings, the company remains poised for sustained growth in the evolving global leisure market. With a solid financial structure and strategic initiatives in place, OneSpaWorld is well-positioned to capitalize on the increasing demand for luxury and wellness experiences on cruise ships and at destination resorts worldwide.
For detailed financial figures and further information, refer to the full earnings report and listen to the earnings call scheduled for May 1, 2024, details of which can be found on the OneSpaWorld investor relations website.
Explore the complete 8-K earnings release (here) from OneSpaWorld Holdings Ltd for further details.
This article first appeared on GuruFocus.
