Good day and welcome to the OneSpaWorld third quarter 2025 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Allison Malkin of ICR. Please go ahead. Thank you. Good morning and welcome to OneSpaWorld's third quarter 2025 earnings call and webcast. Before we begin, I'd like to remind you that certain statements and information made available on today's call and webcast may be deemed to constitute forward-looking statements. These forward-looking statements reflect our judgment and analysis only as of today. Actual results may differ materially from current expectations based on a number of factors affecting our business. Accordingly, you should not place undue reliance on these forward-looking statements. For a more thorough discussion of the risks and uncertainties associated with the forward-looking statements to be made in this conference call and webcast, we refer you to the disclaimer regarding forward-looking statements that is included in our third quarter 2025 earnings release, which was furnished to the SEC today on Form 8-K. We do not undertake any obligation to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise. In addition, the company may refer to certain adjusted non-GAAP metrics on this call. An explanation of these metrics can be found in our earnings release issued earlier this morning. Joining me today are Leonard Fluxman, Executive Chairman and Chief Executive Officer, and Stephen Lazarus, President, Chief Operating Officer, and Chief Financial Officer. Leonard will begin with a review of our third quarter 2025 performance and provide an update on our key priorities. Stephen will provide more details on the financials and guidance. Following our prepared remarks, we will turn the call over to the operator to begin the question- and answer- portion of the call. I would now like to turn the call over to Leonard. Thank you, Allison. Good morning and welcome to OneSpaWorld's third quarter 2025 earnings conference call. It's a pleasure to speak with you all today to share our record third quarter results, which were delivered at the high end of guidance, marking our 18th consecutive quarterly period of year-over-year growth in total revenues and adjusted EBITDA. Our sustained rates of growth demonstrate the power of our complex global operating platform and our team's unwavering commitment to deliver exceptional experiences for our guests and outstanding performance for our cruise line and destination resort partners. In addition, our execution of our asset-light business model continues to generate strong free cash flow, enabling us to create significant value for shareholders through an increasing quarterly dividend, share repurchases, accelerated debt paydown, and strategic investments across our operations. Turning now to the highlights of the quarter, total revenues, income from operations, and adjusted EBITDA represented all-time records, and net income was a third quarter record. Total revenues increased 7% to $258.5 million compared to $241.7 million in the third quarter of 2024. Income from operations increased 5% to $26.3 million compared to $25 million in the third quarter of 2024. Net income increased 13% to $24.3 million compared to $21.6 million in the third quarter of 2024, and adjusted EBITDA increased 6% to $35 million compared to $33 million in the third quarter of 2024. At quarter end, we operated health and wellness centers on 204 ships with an average ship count of 199 for the quarter. This compares with a total of 196 ships and an average ship count of 195 ships at the end of the third quarter of fiscal 2024. At quarter end, we had 4,466 cruise ship personnel on vessels compared with 4,204 cruise ship personnel on vessels at the end of the third quarter of fiscal 2024. The quarter marked meaningful progress in our key priorities. Let me share some of those highlights. First, we captured highly visible new ship growth with current cruise line partners. We continued to solidify our market leadership during the quarter, introducing new health and wellness centers on board four new ship builds during the quarter: Royal Caribbean Star of the Seas, Virgin Brilliant Lady, Princess Cruises Star Princess, and Celebrity XL. For the year, we remain on track to introduce health and wellness centers onto two additional new ship builds commencing voyages in the fourth quarter, giving us a total of eight new ship builds in 2025. Second, we continue to expand higher value services and products. These higher value services, including Medi-Spa, IV Therapy, and acupuncture, to name a few, helped to grow sales productivity with strong double-digit increases in the quarter. We continue to introduce these services to more ships and expand offerings with the latest innovations in adding to our growth. In addition, we continue to elevate the innovation in our Medi-Spa services with the expansion of our rollout of next-generation technology with Thermage FLX and CoolSculpting Elite, which offer improved results and reduce treatment time by up to 50%. These new technologies generated between 40% and 60% growth for these treatments in Q3 versus last year. In addition, acupuncture remains in high demand with equally strong growth rates. The adoption of LED light therapy within this service remains a high conversion add-on treatment. At quarter end, Medi-Spa services were available on 150 ships, up from 144 ships at the end of the third quarter last year. We continue to expect to have Medi-Spa offerings on 151 ships this year. Third, we focused on enhancing health and wellness center productivity. This is best reflected in the delivery of across-the-board increases in key operating metrics, including revenue per passenger per day, weekly revenue, pre-cruise revenue, and revenue per staff per day. Without a doubt, our unsurpassed ability to identify, onboard, and retain staff is leading to this performance. In fact, staff retention remains a key contributor to our consistent gains in operating metrics, as experienced team members are driving incremental revenue through more effective customer recommendations. The quarter saw a five-point increase in staff retention versus Q3 2024, with experienced staff generating significantly higher revenue per day versus first contract staff. We continue to take pride in being a desired employer and strive to create an environment that fosters retention. In addition, we continue to invest in best-in-class training and have recently redesigned our talent management processes to further support productivity and long-term growth in our operating metrics across all of our staff members. Our enhanced sales training continues to fill increases in the number of guests using the spa, service frequency, service spend, and retail and average guest spend per guest. Fourth, we possess a strong and durable balance sheet, which, combined with our ongoing successful growth, enabled us to advance each of our capital allocation objectives in the quarter. These are to invest in future growth, return value to our shareholders, and reduce debt. To this point in the third quarter, we were active on our stock buyback. We paid our quarterly dividend and reduced outstanding debt. Additionally, as Stephen will share, the board approved a 25% increase in our quarterly dividend payment to $0.05 per share, which reflects our company's consistent after-tax free cash flow generation and positive long-term growth prospects. As we close out the year, we remain confident in our outlook with our business continuing its favorable momentum at the start of the fourth quarter. In addition to the introduction of two new health and wellness centers beginning voyages through year end, we're also excited by developing initiatives employing emerging AI technologies to enhance our unique global positioning toward delivering increasing exceptional experiences for our guests and service to our partners. We believe this, along with the continued discipline with which we execute our asset-light business model, positions us well to deliver strong results for our stakeholders and shareholders in the near- and long- term. As Stephen will share momentarily, we have increased our 2025 guidance at the midpoint of our previous ranges for annual revenue and adjusted EBITDA. With that, I will turn the call over to Stephen, who will provide more details on our third quarter results and guidance. Stephen. Thank you, Leonard. Good morning, everyone. We are pleased with our third quarter performance, which included record results in total revenue and adjusted EBITDA and continued strong and predictable cash flow generation. We continue to expand our innovation products and services and leverage our strong operating platform and technology enhancements to deliver strong revenue and profit growth while employing our balanced capital allocation strategy to return capital to shareholders. Fueled by our strong cash flow generation, driven by our capital-efficient asset-light business model that generates predictable, strong free cash flow, we returned $4.1 million to our shareholders through our quarterly dividend payment and $17.6 million from the repurchase of 816,000 common shares during the quarter, while repaying $11.3 million on our term loan facility. Also reflecting our positive long-term outlook, we opportunistically returned an additional $15 million to our shareholders from the repurchase of an additional 722,000 common shares thus far in the fourth quarter. Our board approved a 25% increase in our quarterly dividend payment to $0.05 per share. Before I provide details on our third quarter results, I would like to provide additional perspective on our AI initiatives. These initiatives are expected to deliver measurable improvements across key areas of our business, with actions in place to enhance revenue, create operational efficiencies to drive greater profitability as we grow, while increasing the speed of our decision-making through automation and streamlining of our business processes. Here are some highlights of each initiative. First, as it relates to revenue enhancement, we have implemented a machine learning-powered project designed to optimize yield and revenue, which is actively being tested on 40 vessels. By leveraging advanced recommendations and algorithmic optimization, this initiative aims to unlock additional revenue by optimizing utilization. Second, operational efficiency. In this regard, we are seeing early success with our automated problem resolution and inquiry tool, which has now been deployed across 180 vessels. This technology has led to dramatic improvements in response times and reduced the need for help desk hours. Third, automation and streamlining, which is part of our broader efficiency initiative to continue to explore and develop automation solutions to reduce manual work and streamline operations. Although still in the early stages, these efforts are expected to enhance productivity and operational scalability over time and are expected to further increase our key operating metrics. Overall, our AI initiatives demonstrate our commitment to leveraging cutting-edge technology to strengthen our market position and deliver value to our shareholders. Turning now to a review of the our third quarter. In total, for the third quarter, total revenue increased 7% to $258.5 million compared to $241.7 million for the third quarter of 2024. The increase in service revenue and product revenues were driven by a 4% increase in average guest spend, fleet expansion due to 2025 new builds, and a 1% increase in revenue days, which positively impacted revenues by $7.8 million, $6.8 million, and $3.2 million, respectively. Contributing to the increased volume and spend was $2.7 million in increased pre-booked revenue at health and wellness centers on board, and this was offset by a $1 million decrease in our destination resort revenue, partially due to the close of hotels where we had previously operated. Cost of services increased $12.5 million, attributable to the $13.6 million increase in service revenue compared to the third quarter of 2024. Service margin was a healthy 17.3% up versus both the first and second quarter of 2025, but marginally below the same quarter a year ago, simply due to mix. Cost of product increased $2.7 million, attributable to the $3.2 million increase in product revenue. Salary benefits and payroll taxes were $8.4 million compared to $8.6 million in the quarter prior. Net income was $24.3 million, or net income per diluted share of $0.23, compared to net income of $21.6 million, or net income per diluted share of $0.20 for the third quarter of 2024. The change was primarily attributable to a $1.3 million increase in income from operations and a benefit from a $1.1 million decrease in net interest expense. The $1.1 million decrease in net interest expense was primarily due to lower debt balances and lower effective interest rates. Adjusted net income was $30.4 million, or adjusted net income per diluted share of $0.29, as compared to adjusted net income of $27.3 million, or adjusted net income per diluted share of $0.26 for the third quarter of 2024. Adjusted EBITDA was $35 million, an improvement from $33 million in the third quarter of 2024. Moving on to the balance sheet, we continue to possess a strong balance sheet at quarter end with total cash of $30.8 million. After giving effect to the repayment of $11.3 million in debt, repurchasing $17.6 million of our common shares, and paying $4.1 million in support of our quarterly dividend. In addition, we had full availability of our $50 million revolving line facility, giving us total liquidity of $80.8 million as of September 30th, 2025. Total debt was $85.2 million at September 30th, 2025, compared to $98.6 million at December 31st, 2024. Also, at quarter end, we had $57.4 million remaining on our $75 million share repurchase authorization. Post-quarter end, we repurchased an additional 722,000 outstanding common shares, returning another $15 million to shareholders. Therefore, as of today, we have $42.4 million remaining on that $75 million share repurchase program. We continue to expect the disciplined execution of our growth initiatives and strong cash flow generation driven by our asset-light business model to enable the payment of ongoing quarterly dividends while evaluating opportunities to repurchase our shares and retire debt. We believe this positions us well to create long-term value for our shareholders. Turning now to guidance, as we look ahead, we are excited about our business and continue to expect total revenue for fiscal 2025 to increase in the high single-digit range, reflecting our strong year-to-date performance and our positive outlook, as well as the addition of two new health and wellness centers on cruise ships, beginning voyages during the fourth quarter. Adjusted EBITDA is now expected to increase by 10% at the midpoint of our guidance range, as we deliver increasing productivity from our enhanced products and services. For the full fiscal year 2025, we expect total revenue in the range of $960 to $965 million, which represents an increase of 8% at the midpoint versus fiscal year 2024. Adjusted EBITDA is expected in the range of $122 million- $124 million, which represents an increase at the midpoint of 10% versus fiscal 2024. For the fourth quarter of 2025, we expect total revenue in the range of $241 million- $246 million, and adjusted EBITDA is expected in the range of $30 million- $32 million. With that, we will open up the call for questions. Bailey, if you could please do that. We will now begin the question- and- answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw the question, please press star then two. Please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. Our first question comes from Steve Wieczynski with Stifel. Please go ahead. Yeah, hey guys, good morning. Leonard or Steve, I'm wondering about how we should think about the benefits from some of this AI technology you guys have been implementing. What I mean by that is, if we look at margins in the second quarter, they were up about 70 basis points year- over- year, and in the third quarter, they were down about 20 basis points. Not sure if you can help us think about maybe the cadence of how margin expansion or contraction should look moving forward as you kind of go through and implement some of this technology. Good morning. As we talked about last quarter when we started talking about some of these initiatives, we mentioned then, and we continue to say today, that it's likely the second quarter of next year when we start to become more specific about what those expected improvements will be. We are encouraged with what we see thus far, but frankly, it's just too early to commit to specific increments, etc. We hope to be able to do that by the second quarter of next year. As we think about the fourth quarter and the first quarter, basically, you know, assume nothing is in there, correct? That would be a good assumption to assume that it's consistent with the cadence that it's been tracking at, and then improvements thereafter. Okay, and then Leonard, I don't know if this is for you or Stephen, but we want to understand maybe spend patterns a little bit more on board. You know, maybe you could give us some more color on what you're seeing more so in real time in terms of, you know, guest spending, and wondering if you've seen any changes through October, whether that's, you know, through attachment rates, a difference in spending across land-based versus maritime, or really any kind of change in demand for higher-end services versus traditional treatments. Just trying to understand and get a feel if guests are starting to change their behaviors at all. Yeah, Steve, I tell you, our PPDs, our revenue per passenger per day, everything's positive. The spend's up, attachment rates are consistently good. Pre-cruise revenue consistently staying strong. I mean, we have not seen any kind of material reduction in spend. We also look at what we're deploying in terms of marketing tools, discount rates, additional incentives, and it's very consistent with what we've seen over the past few quarters. In short, we haven't seen anything materially change for our business so far. Okay. Fair enough. Thanks, guys. Appreciate it. Yep. Thanks, Steve. Our next question comes from Sharon Zackfia with William Blair. Please go ahead. Hi, good morning. I think you mentioned that service margin was down a little bit on mix. Could you kind of clarify what's happening with the mix? Yes, it's really just a function, Sharon, of where, which cruise lines are generating slightly different revenue and the agreements that we have with those cruise lines. It's not something that was necessarily unexpected to us, nor is it something that we think, based upon what we're seeing in October, flows through into October. We would expect to see margins continue to be strong. As we know, 17.3% was very healthy. That was versus a second quarter of 16.6% and a first quarter of 17%. I think we should focus on the positive there, which is that it is higher than both of those quarters, although just marginally down versus the third quarter of prior year. Sure, yeah. I just wanted to clarify that you weren't seeing passengers kind of shift down into lower price point services, but it sounds like it's ship mix, not necessarily the actual service mix. Yeah, we're definitely not seeing them ship down. Our model provides us with a degree of insulation in that we're only servicing a small proportion of the customers on board to the extent that those customers that want to spend money, enjoy their vacation, and experience the spa. We're still absolutely seeing that. Great. I wanted to ask a follow-up. We've been getting a lot of questions on the global minimum tax. Can you kind of talk about OneSpaWorld and how, how or if you will be impacted by that beginning next year? Our expectation remains that we will not be impacted. We are still finalizing and are very deep in the process of doing some reorganizational changes to make sure that happens. Upon successful implementation of those changes, at this point in time, we continue to believe that we would not be impacted by global minimum income taxes. Okay. Great. Thank you. Thank you. Our next question comes from Max Rakhlenko with TD Cowen. Please go ahead. Hey, Allison. Thanks, Martin. Nice job in the quarter. First question, in the release, you noted that you saw a noteworthy increase in guest count, frequency, as well as average spend. What do you attribute that to? Is there a way to think about the magnitude of the step-up that you may be seeing? We saw an increase in traffic, which is the amount of passengers we saw, which is a function of some of the newer ships coming into service in the fourth quarter, obviously. The penetration rate actually moved up positively as well from the second quarter. That just meant we were getting more of that traffic on the ships into the spas, and the penetration rate increased moderately, which is a good sign. We're also focusing the staff on facility utilization, as we mentioned on our last call last quarter, which is how do we better utilize not only our staff but the facilities themselves on sea days, port days, what we can do to train staff to fill in the gaps and get better utilization. Where we see the demand remaining high, we see the utilization maxed out. We will go to the cruise lines and have a discussion not just on real estate but more importantly on getting an extra berth, which is never an easy discussion but something that sometimes yields an increase. If it does, obviously, and we show them where the demand comes from, it would be a great thing to have. Now we have the data to support the facility utilization. As I mentioned before, it's a metric that we will produce at some point in the future, probably at the end of the second quarter next year. It's something that we're focusing on internally to improve, that metric itself. Got it. That's really helpful. Stephen, how are you thinking about the right level of cash to hold in the balance sheet in the context of likely continued declines in interest rates? Should we assume that you're going to put more cash to work, as what we saw both in Q3 and quarter to date, or what's the plan ahead? will continue to have a balanced capital allocation strategy. We like to keep $25 million or so of cash on the balance sheet, as you know. We do have a $50 million availability on the line of credit. I think the way we think about it is continued optimization of the capital allocation strategy. For the near-term, share repurchases would remain at the top of that, on the top of the list. Opportunistically, though, it is not programmatic. Then the dividends, which, as you know, we increased by 25% now to $0.05 a quarter. If it makes sense, we will pay down a little bit more of the debt or more over time. That is the order of prioritization. Got it. That's helpful. Thanks a lot, and good luck in the fourth quarter. Thank you, Max. Thanks, Max. Our next question comes from Gregory Miller with Truist. Please go ahead. Thanks. Good morning. I thought I'd start off on a question on staffing. You mentioned in the prepared remarks that you redesigned the talent management process. Could you elaborate on the kind of changes you're implementing? Yeah. We're focusing, clearly, obviously, around solution selling. We're putting people into different modalities and not just sort of pinning them to one modality. There's much more of a shared philosophy around where staff can be used, where before they'd be only used for one type of modality, which is allowing us, as I mentioned before, Greg, to get the better utilization out of our facilities. The focus is not limiting staff just to one type of service, where before we thought that might have, you know, maxed out the benefits of each of them just specializing. We see that it's better to use them across different modalities, enhancing our facility utilization overall. Thanks. I'd like to shift over to the AI front. If I heard correctly, the revenue enhancement projects are on 40 vessels, which is an impressive ramp-up already compared to the piloting you were doing previously. If I heard correctly, the operating efficiencies have been launched on 180 vessels so far. I'm curious, what's driving the disconnect of more focus at this stage on the AI implementation on the operating efficiency side versus the revenue enhancement side? It's not a matter of more focus, Greg. It's a matter of the simplicity of rolling out one versus the other. The revenue enhancement has more complexity and requires specific training for the managers on board, whereas the operational efficiency is rolling out apps, which are much simpler and can be shown how to use much more easily. It's simply a matter of what is easiest to be done. Okay. I appreciate it. Thank you both. Our next question comes from Drew May with North Coast Research. Please go ahead. Hey, good morning, everyone. Thanks for taking my question. It's a little bit of a calmer than expected hurricane season this year, but one that saw a little more itinerary changes and extra sea days. Was there any, you know, tangible headwind or benefit you guys call out from storm activity during the quarter? No, nothing tangible or material, Drew. Yeah. Okay. Got it. Next question was, there's a little bit of a step-up in the CapEx this quarter. Was that kind of related to the AI initiatives, or was there anything else you guys could call out there? No, those are related to the AI initiatives. We have talked about CapEx being at a slightly elevated rate this year and potentially next year as well as we make investments in those projects. That was a big piece of it. There was a smaller piece related to rolling out some of this additional, yeah, maybe fly equipment on board, but the majority is related to these projects. Got it. Thank you. Thank you. Our next question comes from Assia Georgieva with NBC Research. Please go ahead. Good morning, guys. Leonard, I wanted to follow up on your comment about adding an extra berth. I imagine with adding more staff, we might see the productivity metric come down in Q2, but that would be because of the structural change as opposed to actual productivity coming down. Is that fair? Just wanted to clarify. Yeah, it should not depress that metric. The only reason we would go to a cruise line and ask for an increased berth would be because we're not getting to the right level of penetration or productivity that we could if we had that staff member. It would be purely accretive if we added it, not for the sake of just having it. Correct. I was trying to understand, so I don't overly focus on the metric. I understand having more bodies, obviously, would be helpful to the overall revenue generation and penetration rates. My second question is, some of your banners seem to be making sort of a deployment shift, and not only in 2026. I imagine it will be, in 2027 and beyond, to shorter voyages, including in Europe, and the shift to more ships in the Caribbean and the Bahamas, and also shorter voyages there. It seems that shorter voyages typically are a good thing for you. Is that the correct interpretation still? They always have been, you know, they've always been very decent. We try and look at a three, four as a seven. We stagger it that way. We market it that way. We know on the four-day, we've got a little bit extra time. Even though it's separate cruises, we try and structure that for the high-demand periods or the at-sea period. I wouldn't say there's a material difference today than it was before. They still prove out to be quite decent for us. You don't see any net-net impact at this point? Not really, no. We haven't seen anything so far, nor do we expect to see anything material. With the further development of private island destinations, is that an opportunity to further build out your infrastructure on these private islands, basically the marquee ones? Yeah. Can you discuss that a little bit? Yeah, no, we definitely are looking at it very seriously. We're talking to one or two of the banners who have additional islands that they're building out. I think there's an opportunity for us to do something alongside them. I think with existing operations, we're looking at where we can add or improve the facilities on some of the older, sort of islands. We think there's tremendous opportunity for us to participate more so in, you know, when these ships are calling at these fantastic, you know, slots and new islands, Mexico, for Royal Caribbean. I mean, all of them have a very nice island experience today, and some are enhancing it, as you've seen, with NCL and others. We're all announcing, you know, Santorini yesterday. I mean, it's just very exciting because you see they're combining both a land and sea vacation, you know, and are meeting that expectation very well. Santorini sounded really good when I heard that yesterday. It did catch my attention. Lastly, in terms of pre-booked services, has that rate moved? I know it has been difficult sometimes to be fully integrated within the banner's internal pre-booking engine, but they themselves seem to be doing a great job of increasing penetration, and I'm hoping that you're benefiting from that as well. Is that the case? I think it's encouraging, certainly, that pre-booking is getting mentioned on, you know, particularly yesterday's call. I think they mentioned that it's close to 50% and continues to grow. For us, it's a high-focus item. We talk about it in all of our business reviews. We have some initiatives that we're looking at in terms of AI for next year to help enhance the pre-book. I think for us, there's equally as strong a focus on the pre-book because we know they spend, you know, up to 30% more than somebody who doesn't pre-book. I think pre-booking is just going to continue to get stronger, not only for the cruise lines but for us as well over time. What is your current rate, roughly, if you don't mind sharing? It's about 22% of service revenue, which excludes Medi-Spa. Okay, great. Thank you so much. I appreciate it. Yeah, sure. Thanks. This concludes our question- and answer session. I would like to turn the conference back over to Leonard Fluxman, Executive Chairman and CEO. Right. Thank you all for joining us today. We look forward to speaking with many of you at our upcoming investor conferences, meetings, and when we report our fourth quarter results in February. Thanks, everybody. Have a good one. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.