OneSpaWorld Posts Record Revenue but Misses Estimates; Shares Dip in Premarket
ONESPAWORLD HOLDINGS LTD (NASDAQ:OSW) reported financial results for its fourth quarter and full fiscal year 2025, delivering record annual revenue and adjusted EBITDA. However, the company's quarterly performance fell short of Wall Street's expectations, leading to a negative reaction in pre-market trading.
Earnings and Revenue Versus Estimates
The cruise and resort wellness provider's fourth-quarter results presented a mixed picture relative to analyst forecasts. While the company achieved double-digit revenue growth, it did not meet the anticipated consensus.
- Q4 2025 Revenue: $242.1 million, an 11% increase year-over-year.
- Analyst Revenue Estimate: $245.3 million. This represents a slight miss of approximately $3.2 million.
- Q4 2025 Adjusted EPS: $0.24 per diluted share.
- Analyst EPS Estimate: $0.26 per share.
For the full fiscal year 2025, total revenues reached $961.0 million, a 7% increase from the prior year. Adjusted EBITDA for the year grew 10% to $123.3 million, marking the company's fourth consecutive year of record financial results.
Market Reaction and Strategic Shifts
Following the earnings release, OSW shares were down approximately 2.2% in pre-market activity. This initial reaction suggests investor focus on the quarterly earnings miss and the costs associated with a strategic portfolio reorganization.
The quarter was impacted by $5.7 million in restructuring expenses and long-lived asset impairment charges, primarily related to the company's exit from land-based health and wellness center operations in Asia and the reorganization of its U.K. and Italy businesses. These actions, described by management as focusing capital on the "highest growth and most profitable operations," weighed on GAAP net income, which decreased 16% for the quarter to $12.1 million. Excluding these one-time charges, the underlying operational performance was stronger.
Key Highlights from the Report
Beyond the headline numbers, the press release underscored several positive operational trends and a confident outlook:
- Cruise Fleet Expansion: The company ended the quarter with health and wellness centers on 206 ships, up from 199 a year ago, with the average ship count also rising. This expansion from new ship builds was a primary driver of revenue growth.
- Strong Cash Generation and Shareholder Returns: OneSpaWorld highlighted a "balanced capital allocation strategy," returning $92.9 million to shareholders in fiscal 2025 through $17.5 million in dividends and $75.4 million in share repurchases.
- Confident Fiscal 2026 Guidance: Management provided an outlook that calls for total revenues to exceed $1 billion for the first time. The guidance range of $1.01 to $1.03 billion implies high-single-digit growth at the midpoint. Adjusted EBITDA is projected to be between $128 million and $138 million.
- Technology Integration: Executives expressed excitement about the "increasing impact of accelerated AI technology integration across our fleet" to drive future revenue and earnings growth.
Forward Outlook Versus Analyst Expectations
The company's provided guidance for fiscal 2026 offers a benchmark against current analyst projections. OneSpaWorld's revenue guidance midpoint of $1.02 billion sits slightly below the current analyst consensus estimate of $1.043 billion for the year. For the upcoming first quarter of 2026, the company expects revenue between $241 and $246 million, which aligns closely with the analyst estimate of $239.2 million.
Conclusion
OneSpaWorld's fourth quarter capped a record year, demonstrating the resilience and growth of its core cruise ship business. Although quarterly results narrowly missed analyst targets and were clouded by restructuring costs, the company's strategic moves to streamline operations and its robust guidance for crossing the $1 billion revenue threshold in 2026 paint a picture of focused, profitable expansion. The market's initial negative reaction appears to weigh the earnings miss more heavily than the strong forward-looking commentary and strategic repositioning.
For a detailed look at historical earnings, future estimates, and analyst ratings, visit the OneSpaWorld earnings and estimates page on Chartmill.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, an endorsement, or a recommendation to buy, sell, or hold any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
