Onespaworld Holdings ((OSW)) has held its Q2 earnings call. Read on for the main highlights of the call.

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OneSpaWorld’s latest earnings call struck a confident, upbeat tone, underscoring strong operating momentum despite a few emerging headwinds. Management highlighted record revenue and adjusted EBITDA, robust cash generation, expanding fleet and service mix, and encouraging early contributions from AI tools, while acknowledging softer product and resort revenues and some cost and itinerary mix uncertainties.

Record Revenues and EBITDA Streak Continues

OneSpaWorld reported Q2 2026 revenue of $261.2 million, up 9% from $240.7 million a year earlier. Adjusted EBITDA climbed 13% to $34.4 million from $30.5 million, marking the company’s 21st straight quarter of record total revenue and adjusted EBITDA, a notable streak for investors focused on consistency.

Profitability and Earnings Growth Strengthen

Net income increased to $23.2 million, or $0.23 per diluted share, compared with $19.9 million, or $0.19 per share, a year ago. Adjusted net income also improved, rising to $29.8 million, or $0.29 per share, from $25.8 million, or $0.25 per share, reflecting mid‑teens earnings growth.

Balance Sheet Supports Dividends and Buybacks

At quarter‑end, OneSpaWorld held $41.6 million in cash and total liquidity of $91.6 million, including a fully available $50 million revolver. Net debt stood at $81.6 million, and the company returned $5.1 million via its quarterly dividend, repurchased 16,134 shares, and still has $37.1 million remaining under its $75 million buyback plan.

Fleet Expansion and Staffing Fuel Capacity

The company operated on 208 ships at quarter‑end, up from 200, with an average ship count of 202 versus 191 a year ago. Onboard staffing increased to 4,664 personnel from 4,365, supporting higher service capacity and positioning OneSpaWorld to capture more onboard spending as cruise volumes grow.

Prebooking and Guest Spend Show Solid Momentum

Prebooked revenue rose 14%, and forward bookings were up 20% year over year, pointing to healthy demand. Average guest spend ticked up 1.2%, adding $2.7 million to revenue, while incremental spend from prebooked guests remained strong at around 30% or higher, reinforcing the value of advance bookings.

Medi‑Spa and Premium Services Drive Growth

Medi‑spa services were offered on 156 ships versus 147 a year ago and grew roughly 17% in the quarter. Management expects medi‑spa availability on 159 ships by year‑end 2026, with new premium offerings like Thermage, truSculpt, CoolSculpting, IV therapy, acupuncture, and LED therapy delivering double‑digit growth.

AI Platforms Deliver Early Revenue and Efficiency Gains

Amanda, the AI recommendation and yield tool, is now deployed on 188 vessels, generating about a 4% service revenue uplift among less experienced managers and seeing roughly 99% adoption. AVA resolves 96% of support tickets autonomously, while Serena, the guest‑facing chatbot, handles nearly half of sessions outside normal business hours, supported by enterprise AI and a new ERP.

Operational Productivity Metrics Improve

Key operating indicators such as revenue per passenger per day, weekly revenue, and revenue per staff per day all moved higher. Staff retention rose to 81%, up four percentage points from the prior year, a gain management linked to stronger productivity and revenue generation across the fleet.

Product Revenue and Reorganization Weigh on Results

Product revenue declined, partly due to the restructuring of U.K. and Italian operations, which had generated about $1.0 million in Q2 2025. This contributed to a roughly $500,000 year‑over‑year drop in product revenue and shifted some costs from salary and benefits into administrative expense, complicating comparisons.

Destination Resort Segment Faces Pressure

Revenue from destination resorts fell by $1.3 million in the quarter. Management attributed the decline in part to hotel closures in locations where OneSpaWorld had previously operated services, highlighting the impact of rationalizing non‑core or underperforming land‑based operations.

Administrative Expenses Jump on Third‑Party Fees

Administrative expenses surged to $7.2 million in Q2 2026 from $4.4 million a year earlier. The company cited roughly $2.0 million of third‑party fees linked to the U.K./Italy reorganization and shifts in service sourcing, a reminder that strategic restructurings can temporarily raise overhead.

AI Cost Benefits and Margin Impact Still Evolving

Management said AI initiatives are currently delivering more visible benefits on the revenue side than on costs. Expense savings and long‑term margin uplift from platforms such as Amanda, AVA, Serena, and enterprise AI tools are expected later, but executives noted it is too early to quantify the eventual impact.

Seasonality and European Itinerary Mix Risks

Executives flagged potential risks from a higher mix of European itineraries, which historically generate less revenue per passenger than U.S. and Caribbean routes. They also pointed to Q3 and Q4 variability tied to seasonality and itinerary mix, factors they incorporated into guidance ranges but which still add uncertainty.

Operational Exits Distort Year‑Over‑Year Comparisons

Fiscal 2025 included $23 million related to the U.K./Italy reorganization and the exit of land‑based Asia operations. These moves create comparability issues and transitional costs that influence year‑over‑year results and expense composition, though management views them as positioning the portfolio for higher‑quality growth.

Updated Guidance Signals Confidence in Growth

OneSpaWorld raised full‑year 2026 guidance to $1.018 billion–$1.038 billion in revenue and $130 million–$140 million in adjusted EBITDA, implying about 10% growth at the midpoints versus 2025, excluding exited operations. Q3 2026 guidance of $268 million–$273 million in revenue and $35 million–$37 million in adjusted EBITDA points to expected double‑digit growth despite what management called a dynamic operating backdrop.

The earnings call painted a picture of a company leaning into growth, technology, and higher‑value services while managing through restructuring costs and mix‑related pressures. For investors, the raised guidance, record streak in revenues and EBITDA, and disciplined capital returns may outweigh near‑term headwinds tied to product sales, resort closures, and European itinerary exposure.