10-Q

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PART I - FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements

ONESPAWORLD HOLDINGS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share and par value data)



	As of
	September 30, 2026			December 31, 2025
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	32,142		$	16,306
Restricted cash		—			1,198
Accounts receivable, net		50,505			47,929
Inventories, net		60,071			58,837
Prepaid expenses		8,146			6,176
Other current assets		10,070			7,227
Total current assets		160,934			137,673
Property and equipment, net		30,694			27,309
Operating lease right-of-use assets, net		8,046			9,656
Intangible assets, net		498,796			511,007
OTHER ASSETS:
Deferred tax asset		325			325
Other non-current assets		22,760			21,125
Total other assets		23,085			21,450
Total assets	$	721,555		$	707,095
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Accounts payable	$	31,002		$	31,792
Accrued expenses		39,460			37,410
Current portion of operating leases		1,383			1,979
Other current liabilities		705			771
Total current liabilities		72,550			71,952
Other long-term liabilities		212			186
Long-term operating leases		7,368			8,413
Long-term debt, net		70,522			83,967
Total liabilities		150,652			164,518
Commitments and contingencies (Note 12)
SHAREHOLDERS' EQUITY:
Common stock:
Voting common stock, $0.0001 par value; 225,000,000 shares authorized, 100,104,908 issued and outstanding at September 30, 2026 and 101,390,002 shares issued and outstanding at December 31, 2025		10			10
Additional paid-in capital		777,056			795,852
Accumulated deficit		(206,598	)		(252,964	)
Accumulated other comprehensive income (loss)		435			(321	)
Total shareholders' equity		570,903			542,577
Total liabilities and shareholders' equity	$	721,555		$	707,095

The accompanying notes are an integral part of the condensed consolidated financial statements.

ONESPAWORLD HOLDINGS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2026			2025			2026			2025
REVENUES:
Service revenues	$	226,378		$	208,042		$	644,449		$	579,919
Product revenues		50,154			50,476			140,960			138,955
Total revenues		276,532			258,518			785,409			718,874
COST OF REVENUES AND OPERATING EXPENSES:
Cost of services		184,263			172,077			529,470			481,481
Cost of products		42,568			42,858			120,168			118,139
Administrative		6,952			4,568			20,344			13,191
Salaries, benefits and payroll taxes		8,720			8,402			25,889			28,218
Amortization of intangible assets		4,079			4,131			12,211			12,399
Long-lived assets impairment		—			180			—			180
Total cost of revenues and operating expenses		246,582			232,216			708,082			653,608
Income from operations		29,950			26,302			77,327			65,266
INTEREST EXPENSE, NET		(1,179	)		(1,379	)		(3,418	)		(3,921	)
Income before income tax expense		28,771			24,923			73,909			61,345
INCOME TAX EXPENSE		530			578			1,123			1,789
NET INCOME	$	28,241		$	24,345		$	72,786		$	59,556
NET INCOME PER SHARE
Basic	$	0.28		$	0.24		$	0.71		$	0.57
Diluted	$	0.28		$	0.23		$	0.71		$	0.57
WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic		101,416			103,156			101,814			103,651
Diluted		101,864			103,618			102,216			104,100

The accompanying notes are an integral part of the condensed consolidated financial statements.

ONESPAWORLD HOLDINGS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(in thousands)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2026			2025			2026			2025
Net income	$	28,241		$	24,345		$	72,786		$	59,556
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		(21	)		(78	)		(39	)		267
Cash flow hedges:
Net unrealized gain (loss) on derivatives		263			84			980			(661	)
Amount realized and reclassified into earnings		(63	)		(227	)		(185	)		(683	)
Total other comprehensive income (loss), net of tax		179			(221	)		756			(1,077	)
Total comprehensive income	$	28,420		$	24,124		$	73,542		$	58,479

The accompanying notes are an integral part of the condensed consolidated financial statements.

ONESPAWORLD HOLDINGS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(in thousands)


				Three Months Ended September 30, 2026
	Issued Common Voting Shares			Voting Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Income			Accumulated Deficit			Total Shareholders’ equity
BALANCE, June 30, 2026		101,499		$	10	$	790,610		$	256		$	(208,672	)	$	582,204
Net income		—			—		—			—			28,241			28,241
Stock-based compensation		—			—		2,524			—			—			2,524
Foreign currency translation adjustment		—			—		—			(21	)		—			(21	)
Repurchase and retirement of common shares (1)		(1,413	)		—		(11,003	)		—			(26,167	)		(37,170	)
Unrecognized gain on derivatives		—			—		—			200			—			200
Dividends (1)		—			—		(5,075	)		—			—			(5,075	)
Common shares issued under equity incentive plan		19			—		—			—			—			—
BALANCE, September 30, 2026		100,105		$	10	$	777,056		$	435		$	(206,598	)	$	570,903

				Nine Months Ended September 30, 2026
	Issued Common Voting Shares			Voting Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Total Shareholders’ equity
BALANCE, December 31, 2025		101,390		$	10	$	795,852		$	(321	)	$	(252,964	)	$	542,577
Net income		—			—		—			—			72,786			72,786
Stock-based compensation		—			—		7,560			—			—			7,560
Foreign currency translation adjustment		—			—		—			(39	)		—			(39	)
Unrecognized gain on derivatives		—			—		—			795			—			795
Repurchase and retirement of common shares (1)		(1,429	)		—		(11,129	)		—			(26,420	)		(37,549	)
Dividends (1)		—			—		(15,227	)		—			—			(15,227	)
Common shares issued under equity incentive plan		144			—		—			—			—			—
BALANCE, September 30, 2026		100,105		$	10	$	777,056		$	435		$	(206,598	)	$	570,903

(1) See Note 5, “Equity” for further details.

The accompanying notes are an integral part of the condensed consolidated financial statements.

ONESPAWORLD HOLDINGS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(in thousands)

(CONTINUED)


				Three Months Ended September 30, 2025
	Issued Common Voting Shares			Voting Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Shareholders’ equity
BALANCE, June 30, 2025		102,697		$	10	$	814,701		$	(459	)	$	(265,924	)	$	548,328
Net income		—			—		—			—			24,345			24,345
Stock-based compensation		—			—		2,079			—			—			2,079
Foreign currency translation adjustment		—			—		—			(78	)		—			(78	)
Unrecognized loss on derivatives		—			—		—			(143	)		—			(143	)
Repurchase and retirement of common shares		(816	)		—		(6,433	)		—			(11,199	)		(17,632	)
Dividends		—			—		(4,108	)		—			—			(4,108	)
Common shares issued under equity incentive plan		71			—		—			—			—			—
BALANCE, September 30, 2025		101,952		$	10	$	806,239		$	(680	)	$	(252,778	)	$	552,791

				Nine Months Ended September 30, 2025
	Issued Common Voting Shares			Voting Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Shareholders’ equity
BALANCE, December 31, 2024		104,551		$	10	$	833,979		$	397		$	(279,889	)	$	554,497
Net income		—			—		—			—			59,556			59,556
Stock-based compensation		—			—		7,751			—			—			7,751
Foreign currency translation adjustment		—			—		—			267			—			267
Repurchase and retirement of common shares		(2,910	)		—		(23,088	)		—			(32,445	)		(55,533	)
Unrecognized loss on derivatives		—			—		—			(1,344	)		—			(1,344	)
Dividends		—			—		(12,403	)		—			—			(12,403	)
Common shares issued under equity incentive plan		311			—		—			—			—			—
BALANCE, September 30, 2025		101,952		$	10	$	806,239		$	(680	)	$	(252,778	)	$	552,791

The accompanying notes are an integral part of the condensed consolidated financial statements.

ONESPAWORLD HOLDINGS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)


	Nine Months Ended September 30,
	2026			2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	72,786		$	59,556
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		20,887			18,840
Long-lived assets impairment		—			180
Amortization of deferred financing costs		311			356
Stock-based compensation		7,560			7,751
Provision for doubtful accounts		12			14
Loss from write-offs of property and equipment		18			—
Noncash lease (income) expense		(31	)		12
Changes in:
Accounts receivable, net		(2,588	)		(1,659	)
Inventories, net		(1,234	)		(16,543	)
Prepaid expenses		(1,970	)		(2,622	)
Other current assets		(3,989	)		(1,347	)
Other non-current assets		(5,587	)		(3,700	)
Accounts payable		(790	)		4,814
Accrued expenses		2,711			(1,971	)
Other current liabilities		(57	)		(117	)
Other long-term liabilities		129			—
Net cash provided by operating activities		88,168			63,564
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(8,810	)		(10,024	)
Cash received in connection with divestiture		1,828			—
Net cash used in investing activities		(6,982	)		(10,024	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of common shares		(37,549	)		(55,533	)
Repayment on first lien and term loan facilities		(13,756	)		(13,750	)
Payment of deferred financing costs		—			(9	)
Dividends		(15,227	)		(12,403	)
Net cash used in financing activities		(66,532	)		(81,695	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(16	)		272
Net increase (decrease) in cash, cash equivalents and restricted cash		14,638			(27,883	)
Cash, cash equivalents and restricted cash, Beginning of period		17,504			58,637
Cash, cash equivalents and restricted cash, End of period	$	32,142		$	30,754

The accompanying notes are an integral part of the condensed consolidated financial statements.

ONESPAWORLD HOLDINGS LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(CONTINUED)

(Unaudited)

(in thousands)


	Nine Months Ended September 30,
	2026		2025
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Income taxes	$	2,568	$	2,027
Interest	$	3,633	$	4,773

The accompanying notes are an integral part of the condensed consolidated financial statements.

ONESPAWORLD HOLDINGS LIMITED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2026

(Unaudited)

1. DESCRIPTION OF BUSINESS

OneSpaWorld Holdings Limited (“OneSpaWorld”, the “Company”, “we”, “us”, or “our”) is an international business company incorporated under the laws of the Commonwealth of The Bahamas. OneSpaWorld is a global provider and innovator in the fields of health, wellness, aesthetics and fitness. In facilities on cruise ships and in land-based destination resorts, the Company strives to create a relaxing and therapeutic environment where guests can receive health, wellness, aesthetics and fitness services and experiences, and purchase related products, of the highest quality. The Company’s services include traditional and alternative massage; body care and skin care services and products; fitness training; acupuncture; systemic detoxification and nutrition regimens; and medi-spa treatments, among other modalities. The Company also sells premium quality health, wellness, aesthetics and fitness products at its facilities and through its timetospa.com website. The predominant business, based on revenues, is sales of services and products on cruise ships and in land-based destination resorts, followed by sales of products through the timetospa.com website.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation, Principles of Consolidation

In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been omitted or condensed pursuant to the SEC’s rules and regulations. However, management believes that the disclosures contained herein are adequate to make the information presented not misleading. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments (which are of a normal recurring nature) necessary to present fairly our unaudited financial position, results of operations and cash flows. The unaudited results of operations and cash flows of our interim periods are not necessarily indicative of the results of operations or cash flows that may be expected for the entire fiscal year. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. Actual results could differ from those estimates. The accompanying unaudited condensed consolidated financial statements include the condensed consolidated balance sheet and statement of operations, comprehensive income, changes in equity, and cash flows of OneSpaWorld. All significant intercompany items and transactions have been eliminated in consolidation.

Restricted Cash

As of December 31, 2025, restricted cash consisted of cash collateral supporting a standby letter of credit issued in connection with a legal proceeding related to a value added tax assessment. See Note 12, “Commitments and Contingencies,” for further information. During the three months ended September 30, 2026, that letter of credit was replaced with a standby letter of credit issued under the Company’s revolving credit facility (see Note 4, “Long-Term Debt”), and the cash collateral was released. As a result, the Company had no restricted cash as of September 30, 2026. The following table reconciles cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets as of September 30, 2026 and 2025 to the total amounts presented in the condensed consolidated statements of cash flows for the nine months ended September 30, 2026 and 2025 (in thousands):


	Balance as of September 30,
	2026		2025
Cash and cash equivalents	$	32,142	$	29,556
Restricted cash		—		1,198
Total cash and restricted cash in the condensed consolidated statement of cash flows	$	32,142	$	30,754

Inventories

Inventories, consisting principally of personal care products, are stated at the lower of cost, as determined on a first-in, first-out basis, or net realizable value. All inventory balances are comprised of finished goods used in beauty and health and wellness services or held for sale to customers. Inventory reserve is recorded to write down the cost of inventory to the net realizable value. No material inventory reserve was necessary for the three and nine months ended September 30, 2026 and 2025.

Other Assets-Deferred Costs

Costs incurred to enter into new or renew long-term contracts are capitalized and amortized to cost of revenues over the term of the contract. Deferred contract costs, which relate to fees accrued to cruise line partners, amounted to $22.4 million and $20.8 million as of September 30, 2026 and December 31, 2025, respectively, and are presented within other non-current assets in the accompanying condensed consolidated balance sheets. Amortization of deferred contract costs was $1.1 million for each of the three months ended September 30, 2026 and 2025. Amortization of the deferred contract costs was $4.0 million and $2.9 million for the nine months ended September 30, 2026 and 2025, respectively. Amortization of deferred costs is included in cost of services in the accompanying condensed consolidated statements of operations.

Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share is computed by dividing net income, if the impact is dilutive, by the weighted average number of diluted shares of common stock outstanding, as calculated under the treasury stock method, which includes the potential effect of dilutive common stock equivalents, such as options and warrants to purchase common shares, and contingently issuable shares. If the entity reports a net loss, rather than net income for the period, the computation of diluted loss per share excludes the effect of dilutive common stock equivalents, if their effect is anti-dilutive.

The following table provides details underlying OneSpaWorld’s income per basic and diluted share calculation (in thousands, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Numerator:
Net income	$	28,241	$	24,345	$	72,786	$	59,556
Denominator:
Weighted average shares outstanding – Basic		101,416		103,156		101,814		103,651
Dilutive effect of stock-based awards		448		462		402		449
Weighted average shares outstanding – Diluted		101,864		103,618		102,216		104,100
Net income per share:
Basic	$	0.28	$	0.24	$	0.71	$	0.57
Diluted	$	0.28	$	0.23	$	0.71	$	0.57

The table below presents the number of antidilutive potential common shares that are not considered in the calculation of diluted income per share (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Performance stock units		268		181		268		181

Adoption of Accounting Pronouncements

In July 2025, the FASB issued ASU 2025-05 (“ASU 2025-05”), Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which is effective for fiscal years beginning after December 15, 2025, and interim periods within those years. The Company adopted this guidance on a prospective basis effective January 1, 2026. The ASU provides a practical expedient allowing the Company to assume that economic conditions existing as of the reporting date will remain constant throughout the remaining expected life of its accounts receivable. By electing this expedient, the Company is no longer required to incorporate forward-looking macroeconomic forecasts into its estimate of expected credit losses. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements.

Recent Accounting Pronouncements

With the exception of those discussed below, there have been no recent accounting pronouncements or changes in accounting pronouncements that are of significance, or potential significance, to the Company. The following summary of recent accounting pronouncements is not intended to be an exhaustive description of the respective pronouncement.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires disaggregated disclosure, in the notes to the financial statements, of certain expense categories included in relevant expense captions presented on the face of the income statement. ASU 2024-03, as clarified by ASU No. 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either prospectively or retrospectively. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 removes all references to software development project stages and replaces them with a principles-based framework for recognizing and capitalizing internal-use software costs. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. The amendments may be applied prospectively, retrospectively, or using a modified transition approach. The Company is currently evaluating the impact that the adoption of ASU 2025-06 will have on its consolidated financial statements and related disclosures.

3. INTANGIBLE ASSETS

Intangible assets consist of finite and indefinite life assets. The following is a summary of the Company’s intangible assets as of September 30, 2026 (in thousands, except amortization period):


	Cost		Accumulated Amortization and Impairment			Net Balance		Weighted Average Amortization Period (in years)
Retail concession agreements	$	604,700	$	(116,824	)	$	487,876		39
Destination resort agreements		17,900		(12,380	)		5,520		15
Trade name		6,200		(800	)		5,400	Indefinite-life
Licensing agreement		1,000		(1,000	)		—	8
	$	629,800	$	(131,004	)	$	498,796

The following is a summary of the Company’s intangible assets as of December 31, 2025 (in thousands, except amortization period):


	Cost		Accumulated Amortization and Impairment			Net Balance		Weighted Average Amortization Period (in years)
Retail concession agreements	$	604,700	$	(105,195	)	$	499,505		39
Destination resort agreements		17,900		(11,798	)		6,102		15
Trade name		6,200		(800	)		5,400	Indefinite-life
Licensing agreement		1,000		(1,000	)		—		8
	$	629,800	$	(118,793	)	$	511,007

The Company amortizes intangible assets with definite lives on a straight-line basis over their estimated useful lives. Amortization expense was $4.1 million for each of the three-month periods ended September 30, 2026 and 2025. Amortization expense was $12.2

million and $12.4 million for the nine-month periods ended September 30, 2026 and 2025, respectively. Amortization expense is estimated to be $4.1 million for the remainder of 2026 and $16.3 million in each of the years 2027 through 2031.

4. LONG-TERM DEBT

Long-term debt consisted of the following (in thousands, except interest rate):




	Interest Rate As of			As of
	September 30, 2026	December 31, 2025	Maturities Through	September 30, 2026			December 31, 2025
Term loan facility	5.7%	5.9%	2029	$	71,244		$	85,000
Less: unamortized debt issuance cost					(722	)		(1,033	)
Long-term debt, net				$	70,522		$	83,967

On September 20, 2024 (the “Closing Date”), the Company and its subsidiaries, Dory Acquisition Sub, Inc. (“Dory Acquisition”) and OneSpaWorld (Maritime) Limited, formerly known as OneSpaWorld (Bahamas) Limited (“OneSpaWorld (Maritime)” and together with Dory Acquisition, the “Borrowers”), entered into a credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and certain lenders party thereto, providing for senior secured credit facilities consisting of (x) a term loan facility of $100 million (the “Term Loan Facility”), of which $70 million was borrowed by Dory Acquisition and $30 million was borrowed by OneSpaWorld (Maritime), and which was fully drawn on the Closing Date, and (y) a revolving loan facility of up to $50 million (the “Revolving Facility” and, together with the Term Loan Facility, the “Credit Facilities”), which Revolving Facility remained undrawn as of September 30, 2026. The Revolving Facility includes borrowing capacity available for letters of credit up to $5 million. Any issuance of letters of credit reduces the amount available under the Revolving Facility. The Credit Facilities mature on September 20, 2029.

Loans outstanding under the Credit Facilities will accrue interest at a rate per annum equal to Term Secured Overnight Financing Rate (“SOFR”) plus a margin of 1.90%, with three step ups to a maximum margin of 2.65% depending on the most recent consolidated leverage ratio of the Company and its restricted subsidiaries, and undrawn amounts under the Revolving Facility will accrue a commitment fee at a rate per annum of 0.25% on the average daily undrawn portion of the commitments thereunder, with three step ups to a maximum commitment fee of 0.40% depending on the most recent consolidated leverage ratio of the Company and its restricted subsidiaries.

The obligations under the Credit Facilities are guaranteed by the Company and each of its direct or indirect wholly-owned subsidiaries other than certain excluded subsidiaries (the “Subsidiary Guarantors”). The obligations of the Company, the Borrowers and the Subsidiary Guarantors under the Credit Facilities are secured by substantially all of their assets.

The Term Loan Facility requires the Borrowers to make certain mandatory prepayments, with (i) 100% of net cash proceeds of all non-ordinary course asset sales or other dispositions of property, subject to the ability to reinvest such proceeds and certain other exceptions, and (ii) 100% of the net cash proceeds of any debt incurrence, other than debt permitted under the definitive agreements (but excluding debt incurred to refinance the Credit Facilities). The Borrowers also are required to make quarterly amortization payments equal to 1.25% of the original principal amount of the Term Loan Facility commencing on March 31, 2025 (subject to reductions by optional and mandatory prepayments of the loans). The Borrowers may prepay the Credit Facilities at any time without premium or penalty, subject to payment of customary breakage costs. During the year ended December 31, 2025, we made $15.0 million in total principal payments on our Term Loan Facility. These payments consisted of $5.0 million in aggregate required quarterly amortization payments and a $10.0 million voluntary prepayment, which satisfied in full all scheduled amortization payments for 2026 and 2027. During the nine months ended September 30, 2026, we made an additional $13.8 million in voluntary prepayments on the Term Loan Facility, consisting of $2.5 million during the six months ended June 30, 2026 and $11.3 million during the three months ended September 30, 2026. As a result of the 2025 and 2026 voluntary prepayments, all remaining scheduled quarterly amortization payments prior to maturity have been satisfied in full, and the remaining principal balance is due at maturity in 2029, as reflected in the table below.

The Credit Agreement contains a financial covenant requiring the Company and its restricted subsidiaries to maintain a maximum consolidated total leverage ratio of 4.00 to 1.00, subject to certain exceptions, and a minimum fixed charge coverage ratio of 1.25 to 1.00. Additionally, the Credit Agreement contains a number of customary negative covenants that restrict, among other things and in each case subject to specified exceptions, the Company’s and its restricted subsidiaries’ ability to: consummate consolidations, mergers and sales of assets; grant certain liens; incur additional debt; pay certain dividends; and engage in transactions with affiliates. As of September 30, 2026 and December 31, 2025, the Company was in compliance with all of the covenants contained in the Credit Agreement.

The Credit Agreement also contains certain customary representations and warranties, affirmative covenants and events of default. If an event of default occurs, the lenders under the Credit Facilities are entitled to take various actions, including the acceleration of amounts due under the Credit Facilities and all actions permitted to be taken by a secured creditor.

The following are scheduled principal repayments on long-term debt as of September 30, 2026 for each of the next five years and thereafter (in thousands):


Year	Amount
Remainder of 2026	$	—
2027		—
2028		—
2029		71,244
2030		—
Thereafter		—
Total	$	71,244

Borrowing Capacity:

During the three months ended September 30, 2026, the Company issued a $1.2 million standby letter of credit under the Revolving Facility in connection with the matter described in Note 12, “Commitments and Contingencies,” to replace a cash-collateralized letter of credit issued by another financial institution, and the related cash collateral, previously reported as restricted cash, was released. The standby letter of credit is unsecured and had not been drawn upon as of September 30, 2026.

As of September 30, 2026, our available borrowing capacity under the Revolving Facility was $48.8 million, net of the $1.2 million outstanding standby letter of credit, and no amounts were borrowed. Utilization of the borrowing capacity was as follows (in thousands):


	Borrowing Capacity		Letters of Credit Outstanding		Amount Borrowed		Available Borrowing Capacity
Revolving Facility	$	50,000	$	1,198	$	—	$	48,802

5. EQUITY

Dividends Declared Per Common Share

On July 22, 2026, our Board of Directors declared a quarterly cash dividend of $0.05 per share of common stock, totaling $5.1 million, which was paid on September 2, 2026 to shareholders of record as of the close of business on August 19, 2026. Cash dividends declared totaled $0.05 and $0.15 per share for the three and nine months ended September 30, 2026, respectively, and $0.04 and $0.12 per share for the three and nine months ended September 30, 2025, respectively. Cash dividends paid totaled $15.2 million and $12.4 million for the nine months ended September 30, 2026 and 2025, respectively. See Note 13, “Subsequent Events,” for information regarding additional dividends declared subsequent to the balance sheet date.

Share Repurchase Program

On April 23, 2025, the Board of Directors approved a share repurchase program to repurchase up to $75.0 million of its common stock (the “2025 Share Repurchase Program”). As of the approval date, $0.9 million remained available under the 2024 Share Repurchase Program, which was cancelled upon the adoption of the 2025 Share Repurchase Program. Repurchases under the 2025 Share Repurchase Program were funded through the Company’s available cash. During the nine months ended September 30, 2026, the Company repurchased 1,428,708 shares of common stock at an aggregate cost of $37.5 million under the 2025 Share Repurchase Program, including 1,412,574 shares at an aggregate cost of $37.2 million during the three months ended September 30, 2026. Upon settlement of the repurchases, the acquired common shares reverted to authorized but unissued shares. The Company allocated the excess of the repurchase price over the par value of the shares acquired between additional paid-in capital and accumulated deficit. In August 2026, the Company completed the 2025 Share Repurchase Program, having repurchased an aggregate of 3,213,083 shares of common stock at an aggregate cost of $75.0 million since its inception, and no amount remains available for future repurchases under the program. See Note 13, “Subsequent Events,” for information regarding a new share repurchase program approved subsequent to the balance sheet date.

6. STOCK-BASED COMPENSATION

The share-based compensation expense for the three months ended September 30, 2026 and 2025 was $2.5 million and $2.1 million, respectively, which is included as a component of salaries, benefits and payroll taxes in the accompanying condensed consolidated statements of operations.

The share-based compensation expense for the nine months ended September 30, 2026 and 2025 was $7.6 million and $7.8 million, respectively, and is included as a component of salaries, benefits and payroll taxes in the accompanying condensed consolidated statements of operations.

The expense for the nine months ended September 30, 2025 included $1.4 million of incremental expense related to the accelerated vesting of certain restricted stock units (“RSUs”) and performance stock units (“PSUs”) in connection with a previously announced executive departure in March 2025.

The following is a summary of activity related to RSUs for the nine months ended September 30, 2026:


RSUs	Number of Awards			Weighted-Average Grant Date Fair Value

Non-vested share units as of December 31, 2025		543,449		$	20.02
Granted		60,188			25.96
Vested		(74,064	)		22.11
Forfeited		(3,101	)		18.27
Non-vested share units as of September 30, 2026		526,472		$	20.42

The following is a summary of activity related to PSUs for the nine months ended September 30, 2026:


PSUs	Number of Performance-Based Awards			Weighted-Average Grant Date Fair Value

Non-vested share units as of December 31, 2025		532,642		$	18.49
Granted (1)		3,868			19.50
Vested		(63,568	)		19.50
Forfeited		(3,103	)		18.27
Non-vested share units as of September 30, 2026		469,839		$	18.36

(1) The amount shown represents performance adjustments for performance-based awards granted in prior fiscal years and vested during the first quarter of 2026 based on the Company’s achievement of the performance conditions.

7. REVENUE RECOGNITION

The Company’s revenue generating activities include the following:

Service Revenues

Service revenues consist primarily of sales of health, wellness, aesthetics and fitness services, including a full range of massage treatments, body care and skin care services, systemic detoxification and nutrition regimens, teeth whitening, mindfulness services and medi-spa services to cruise ship passengers and destination resort guests. Each service or consultation represents a separate performance obligation and revenues are generally recognized immediately upon the completion of our service.

Product Revenues

Product revenues consist primarily of sales of health, wellness, aesthetics and fitness related products, such as facial skincare, body care, hair care, orthotics and nutritional supplements to cruise ship passengers, destination resort guests and timetospa.com customers. Our Shop & Ship program provides guests the ability to purchase retail products onboard and have them shipped directly from our distribution center to their home. Each product unit represents a separate performance obligation. Our performance obligations are satisfied, and revenue is recognized, when the customer obtains control of the product, which occurs either at the point of sale for retail sales or at the time of shipping for Shop & Ship and timetospa.com product sales. The Company provides no warranty on products sold. Shipping and handling fees charged to customers are included in net sales.

Gift Cards

The Company only offers no-fee, non-expiring gift cards to its customers. At the time gift cards are sold, no revenue is recognized; rather, the Company records a contract liability to customers. The liability is relieved, and revenue is recognized equal to the amount redeemed at the time gift cards are redeemed for products or services. The Company records revenue from an estimate of unredeemed gift cards (breakage) in net sales on a pro-rata basis over the time period gift cards are redeemed. At least three years of historical data, updated annually, is used to determine actual redemption patterns. The liability for unredeemed gift cards is included in “Other current liabilities” on the Company’s condensed consolidated balance sheets and was not material as of September 30, 2026 and December 31, 2025, respectively.

Customer Loyalty Rewards Program

The Company initiated a customer loyalty program during October 2019 in which customers earn points based on their spending on timetospa.com. The Company recognizes the estimated net amount of the rewards that will be earned and redeemed as a reduction to Product revenues at the time of the initial transaction and as tender when the points are subsequently redeemed by a customer. The liability for customer loyalty programs was not material as of September 30, 2026 and December 31, 2025.

Contract Balances

Receivables from the Company’s contracts with customers are included within accounts receivables, net in the consolidated balance sheets. Such amounts are typically remitted to us by our cruise line or destination resort partners, except for online sales, and are net of commissions they withhold. Although paid by our cruise line partners, customers are typically required to pay with major credit cards, reducing our credit risk to individual customers. Amounts are billed immediately, and our cruise line and destination resort partners typically remit payments to us within 30 days. As of September 30, 2026 and December 31, 2025, our Accounts receivable, net from contracts with customers were $50.5 million and $47.9 million, respectively. Our contract liabilities for gift cards and customer loyalty programs are described above.

Disaggregation of Revenue and Segment Reporting

The Company operates facilities on cruise ships and in destination resorts, where we provide health, wellness, aesthetics and fitness services and sell related products. The Company also sells health, wellness, aesthetics and fitness-related products through its timetospa.com website, which is a post-cruise sales tool where guests may continue their wellness journey after disembarking. The Company’s Maritime and Destination Resorts operating segments are aggregated into a single reportable segment based upon similar economic characteristics, services, products, customers and delivery methods. See Note 8, “Segment and Geographic Information,” for further details regarding the Company’s operating segments. The following table disaggregates the Company’s revenues by revenue source and operating segment (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Service revenues:
Maritime	$	221,229	$	201,461	$	624,705	$	556,321
Destination Resorts		5,149		6,581		19,744		23,598
Total service revenues		226,378		208,042		644,449		579,919
Product revenues:
Maritime		48,980		49,698		137,881		136,007
Destination Resorts		524		473		1,587		1,645
Timetospa.com		650		305		1,492		1,303
Total product revenues		50,154		50,476		140,960		138,955
Total revenues	$	276,532	$	258,518	$	785,409	$	718,874

8. SEGMENT AND GEOGRAPHIC INFORMATION

The Company operates health and wellness centers on cruise ships and in destination resorts, offering health and wellness services and selling health, wellness, aesthetics and fitness related products. The Maritime and Destination Resorts operating segments are aggregated into a single reportable segment due to their similar business and economic characteristics, operations, services offerings, product offerings and classes of customers. While separate financial information is available for the operating segments, the Company’s Chief Executive Officer, who serves as the Company’s Chief Operating Decision Maker (“CODM”), primarily reviews financial results and makes decisions on a consolidated basis. Our CODM utilizes consolidated financial information to evaluate performance, allocate resources, and make strategic decisions, including those related to capital expenditures and personnel. The CODM regularly analyzes net income (loss) and its components, as reported in the condensed consolidated statements of operations, to assess operating trends, evaluate budget-to-actual variances, and inform strategic and operational decisions. All expense categories presented in the condensed consolidated statements of operations are considered significant, with no additional segment expenses requiring disclosure.

As the Company operates as a single reportable segment, all required financial information is included in the accompanying condensed consolidated financial statements. The CODM does not review segment assets beyond the consolidated level presented in the condensed consolidated balance sheets. There are no intra-entity sales or transfers, and no significant expense categories are regularly provided to the CODM beyond those disclosed in the condensed consolidated statements of operations. Additional information regarding the Company’s services and products is provided in Note 7, “Revenue Recognition.”

The basis for determining the geographic information below is based on the countries in which the Company operates. The Company is not able to identify the country of origin for the customers to which revenues from cruise ship operations relate. Geographic information is as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Revenues:
U.S.	$	3,974	$	3,559	$	12,168	$	11,718
Other countries		2,436		3,953		10,992		15,378
Not connected to a country		270,122		251,006		762,249		691,778
Total	$	276,532	$	258,518	$	785,409	$	718,874


	As of
	September 30, 2026		December 31, 2025
Property and equipment, net:
U.S.	$	4,557	$	4,285
Other countries		13,113		8,142
Not connected to a country		13,024		14,882
Total	$	30,694	$	27,309

9. CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the changes in accumulated other comprehensive income (loss) by component (in thousands):



	Accumulated Other Comprehensive (Loss) Income for the Nine Months Ended September 30, 2026									Accumulated Other Comprehensive Income (Loss) for the Nine Months Ended September 30, 2025
	Foreign Currency Translation Adjustments			Changes Related to Cash Flow Hedges (1)			Accumulated Other Comprehensive (Loss) Income				Foreign Currency Translation Adjustments			Changes Related to Cash Flow Hedges (1)			Accumulated Other Comprehensive Income (Loss)
Balance, beginning of the period	$	(244	)	$	(77	)	$	(321	)		$	(968	)	$	1,365		$	397
Current period other comprehensive income (loss) before reclassifications		(39	)		980			941				267			(661	)		(394	)
Amounts reclassified into earnings		-			(185	)		(185	)			-			(683	)		(683	)
Net current period other comprehensive income (loss)		(39	)		795			756				267			(1,344	)		(1,077	)
Balance, end of the period	$	(283	)	$	718		$	435			$	(701	)	$	21		$	(680	)

(1)

See Note 10, “Fair Value Measurements and Derivatives.”

10. FAIR VALUE MEASUREMENTS AND DERIVATIVES

Fair Value Measurements

Cash and cash equivalents at September 30, 2026 and December 31, 2025 are comprised of cash and are categorized as Level 1 instruments. The Company maintains cash with various high-quality financial institutions. Restricted cash at December 31, 2025 was comprised of cash collateral supporting a standby letter of credit issued in connection with a legal proceeding related to a value added tax assessment (see Note 2, “Summary of Significant Accounting Policies”) and was categorized as a Level 1 instrument. There was no restricted cash at September 30, 2026. The fair value of outstanding long-term debt as of December 31, 2025 is estimated using a discounted cash flow analysis based on current market interest rates for debt issuances with similar remaining years-to-maturity and adjusted for credit risk, which represents a Level 3 measurement in the fair value hierarchy. The carrying amounts and estimated fair values of the Company’s cash, restricted cash and long-term debt were as follows (in thousands):


	September 30, 2026				December 31, 2025
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Cash	$	32,142	$	32,142	$	16,306	$	16,306
Restricted cash		-		-		1,198		1,198
Total cash	$	32,142	$	32,142	$	17,504	$	17,504
Term loan facility (a)	$	71,244	(b)		$	85,000	$	85,740

(a)

The debt amounts above do not include the impact of the interest rate swap agreements or debt issuance costs.

(b)

The Company’s outstanding long-term debt as of September 30, 2026 bears variable interest rates that are tied to SOFR plus an applicable margin. As these rates reset frequently and reflect current market conditions, the Company believes that the fair value of long-term debt as of September 30, 2026 approximates its carrying amount.

Assets and liabilities that are recorded at fair value have been categorized based upon the fair value hierarchy. The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in thousands):


		Fair Value Measurements at September 30, 2026								Fair Value Measurements at December 31, 2025
Description	Balance Sheet Location	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Assets:
Derivative financial instruments (1)	Other current assets		717		—		717		—		35		—		35		—
Total assets		$	717	$	—	$	717	$	—	$	35	$	—	$	35	$	—
Liabilities:
Derivative financial instruments (1)	Other current liabilities	$	—	$	—	$	—	$	—	$	9	$	—	$	9	$	—
Derivative financial instruments (1)	Other long-term liabilities		—		—		—		—		104		—		104		—
Total liabilities		$	—	$	—	$	—	$	—	$	113	$	—	$	113	$	—

(1)

Consists of an amount attributable to two interest rate swap agreements; see “Derivatives” below.

Derivatives

Market risk associated with the Company’s long-term floating rate debt is the potential increase in interest expense from an increase in interest rates. The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. These instruments are recorded on the balance sheet at their fair value and are designated as hedges. The financial impact of these hedging instruments is primarily offset by corresponding changes in the underlying exposures being hedged.

The Company assesses whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the cash flow of its hedged forecasted transactions. The Company uses regression analysis for these hedge relationships and high effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the fair values of the derivatives and the hedged forecasted transaction. Cash flows from the derivatives are classified in the same category as the cash flows from the underlying hedged transaction. The interest rate swap agreements involve the receipt of variable-rate amounts in exchange for fixed-rate interest payments over the life of the respective agreement without an exchange of the underlying notional amount. The Company classifies derivative instrument cash flows from hedges of benchmark interest rate as operating activities due to the nature of the hedged item. Gains and losses on derivatives that are designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) until the underlying hedged transactions are recognized in earnings. If it is determined that the hedged forecasted transaction is no longer probable of occurring, then the amount recognized in accumulated other comprehensive income (loss) is released to earnings.

The Company monitors concentrations of credit risk associated with financial and other institutions with which the Company conducts significant business. Credit risk, including, but not limited to, counterparty nonperformance under derivatives, is not considered significant, as the Company primarily conducts business with large, well-established financial institutions with which the Company has established relationships, and which have credit risks acceptable to the Company. The Company does not anticipate nonperformance by its counterparty. The amount of the Company’s credit risk exposure is equal to the fair value of the derivatives when they are in a net gain position.

In September 2024, the Borrowers entered into two floating-to-fixed interest rate swap agreements with notional amounts of $70 million and $30 million, respectively, with Bank of America, N.A. to make a series of payments based on a fixed interest rate of 3.341% and 3.564%, respectively, and receive a series of payments based on the 1 Month USD-SOFR CME term rate, which are used to hedge the Company’s exposure to changes in cash flows associated with its variable rate Term Loan Facility. The Company has designated the interest rate swap agreements as cash flow hedges. The interest rate swap agreements expire on September 20, 2027 and December 20, 2026, respectively. As of September 30, 2026, the aggregate notional amount of the interest rate swap agreements was $71.2 million.

There was no ineffectiveness related to the interest rate swap agreements. The gain or loss on the derivatives is recorded as a component of accumulated other comprehensive income (loss) and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. The Company expects to reclassify $0.7 million of income from accumulated other comprehensive income (loss) into interest expense within the next twelve months.

The fair value of the interest rate swap agreements is measured on a recurring basis by netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on the expectation of future interest rates (forward curves)

derived from observable market interest rate curves. The interest rate swap agreements were categorized as Level 2 in the fair value hierarchy. The Company is not required to post cash collateral related to these derivative instruments.

The effect of the interest rate swap agreements designated as cash flow hedging instruments on the condensed consolidated financial statements was as follows (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2026			2025			2026			2025
Gain (loss) recognized in accumulated other comprehensive (loss) income	$	263		$	84		$	980		$	(661	)

Amounts reclassified from accumulated other comprehensive (loss) income to interest expense	$	(63	)	$	(227	)	$	(185	)	$	(683	)

11. INCOME TAXES

The Company recorded income tax expense of $0.5 million and $0.6 million for the three months ended September 30, 2026 and 2025, respectively. For the nine months ended September 30, 2026 and 2025, the Company recorded income tax expense of $1.1 million and $1.8 million, respectively. The difference between the expected provision for income taxes using the 21% U.S. federal income tax rate and the Company’s actual provision is primarily attributable to foreign rate differential, including income earned in jurisdictions not subject to income taxes, withholding taxes due in various jurisdictions and the change in valuation allowance. The year-over-year decrease in the effective tax rate was primarily attributable to exiting certain jurisdictions with tax rates higher than the Company’s global effective tax rate.

12. COMMITMENTS AND CONTINGENCIES

We are routinely involved in legal proceedings, disputes, regulatory matters, and various claims and lawsuits that have been filed or are pending against us, including as noted below, arising in the ordinary course of our business. Most of these claims and lawsuits are covered by insurance and, accordingly, the maximum amount of our liability is typically limited to our deductible amount. Nonetheless, the ultimate outcome of those claims and lawsuits that are not covered by insurance cannot be determined at this time. We have evaluated our overall exposure with respect to all of our legal proceedings, threatened and pending litigation and, to the extent required, we have accrued amounts for all estimable probable losses associated with our deemed exposure. We are currently unable to estimate any other potential contingent losses beyond those accrued, as discovery is not complete and adequate information is not available to estimate such range of loss or potential recovery. However, based on our current knowledge, we do not believe that the aggregate amount or range of reasonably possible losses with respect to these matters will be material to our consolidated results of operations, financial condition or cash flows. We intend to vigorously defend our legal position on all claims and, to the extent necessary, seek recovery.

In February 2020, the Company received a formal assessment of $1.9 million by a foreign tax authority over how the value added tax (“VAT”) law was applied on the change in the ultimate beneficial ownership of one of our subsidiaries as result of the business combination in March 2019. The Company is disputing the assessment and has recorded an accrual of $1.2 million for this matter during the year ended December 31, 2020 and is included in “Accrued expenses” on the Company’s condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025. In connection with this matter, the Company has provided a $1.2 million standby letter of credit, which was previously secured by cash collateral reported as restricted cash and, as of September 30, 2026, is issued under the Revolving Facility (see Note 4, “Long-Term Debt”). The Company believes the ultimate outcome of this matter will not have a material adverse impact on the consolidated financial statements.

13. SUBSEQUENT EVENTS

On October 20, 2026, the Board of Directors approved a quarterly dividend payment of $0.0625 per common share payable on December 2, 2026 to shareholders of record as of the close of business on November 18, 2026.

On October 20, 2026, following the completion of the 2025 Share Repurchase Program in August 2026, the Board of Directors approved a new share repurchase program authorizing the Company to repurchase up to $100 million of its common stock. The share repurchases will be funded through the Company’s available surplus cash and may be made from time to time on the open market, including through Rule 10b5-1 plans, in privately negotiated transactions, through block purchases, or otherwise, in accordance with applicable securities laws. The share repurchase program may be suspended, modified, or discontinued at any time, and the Company has no obligation to repurchase any specific value or number of shares of its common stock under the program.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

In addition to historical information, the following discussion contains forward-looking statements, such as statements regarding our expectation for future performance, liquidity and capital resources that involve risks, uncertainties and assumptions that could cause actual results to differ materially from those contained in or implied by any forward-looking statements. Factors that could cause such differences include those identified below and those described in the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” and in “Risk Factors” in our Form 10-K for the fiscal year ended December 31, 2025. We assume no obligation to update any of these forward-looking statements.

OneSpaWorld Holdings Limited (“OneSpaWorld,” the “Company,” “we,” “our,” “us” and other similar terms refer to OneSpaWorld Holdings Limited and its consolidated subsidiaries) is the pre-eminent global operator of health and wellness centers onboard cruise ships and a leading operator of health and wellness centers at destination resorts worldwide. We are positioned as a leader in the hospitality-based health and wellness industry. Our highly trained and experienced staff offer guests a comprehensive suite of premium health, wellness, aesthetics and fitness services and products onboard cruise ships and at destination resorts globally. Over the last 50 years, we have built our leading market position on our depth of staff expertise, broad and innovative service and product offerings, expansive global recruitment, training and logistics platform, as well as decades-long relationships with cruise line and destination resort partners. Throughout our history, our mission has been simple: helping guests look and feel their best during and after their stay.

At our core, we are a global services company. We serve a critical role for our cruise line and destination resort partners, operating a complex and increasingly important aspect of their overall guest experience. Decades of investment and know-how have allowed us to construct an unmatched global infrastructure to manage the complexity of our operations. We have consistently expanded our onboard offerings with innovative and leading-edge service and product introductions, and developed powerful recruiting, training and logistics platforms, increasingly powered by emerging technologies, including generative and agentic artificial intelligence applications, to manage our operational complexity, maintain our industry-leading quality standards, and maximize revenue and profitability per health and wellness center. The combination of our personnel recruiting and training platform, deep proprietary global labor pool, global logistics and supply chain infrastructure, and proven health and wellness center operating, revenue, and profitability management capabilities represents a significant competitive advantage that we believe is not economically feasible to replicate.

A significant portion of our revenues are generated from our cruise ship operations. Historically, we have been able to renew substantially all of our cruise line agreements.

Key Performance Indicators

In assessing the performance of our business, we consider key performance indicators used by management, including, among others:

•

Average Ship Count. The number of ships, on average during the period, on which we operate health and wellness centers. This is a key metric that impacts revenue and profitability and reflects the fact that during the period ships were in and out of service, and is calculated by adding the total number of days that each of the ships generated revenue during the period, divided by the number of calendar days during the period.

•

Period End Ship Count: The number of ships at period end on which we operate health and wellness centers. This is a key metric that impacts revenue and profitability.

•

Average Weekly Revenue Per Ship. A key indicator of productivity per ship. Revenue per ship can be affected by the various sizes of health and wellness centers and categories of ships on which we serve.

•

Average Revenue Per Shipboard Staff Per Day. We utilize this performance metric to assist in determining the productivity of our onboard staff, which we believe is a critical element of our operations.

•

Revenue Days. Revenue days are the days on which the health and wellness centers are open onboard a revenue generating cruise with passengers.

•

Average Resort Count. The number of destination resorts on average during the period in which we operate the health and wellness centers. This is a key metric that impacts revenue and profitability and reflects the fact that during the period destination resort health and wellness centers were in and out of service, and is calculated by adding the total number of days that each destination resort health and wellness center generated revenue during the period, divided by the number of calendar days during the period.

•

Period End Resort Count. The number of destination resorts at period end on which we operate the health and wellness centers. This is a key metric that impacts revenue and profitability.

•

Average Weekly Revenue Per Destination Resort. A key indicator of productivity per destination resort health and wellness center. Revenue per destination resort health and wellness center in a period can be affected by the geographic mix of health and wellness centers in operation for such period. Typically, our U.S. and Caribbean health and wellness centers are larger and produce substantially more revenues per location than our Asia centers. Additionally, average weekly revenue can also be negatively impacted by renovations of our destination resort health and wellness centers.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Average Ship Count		206		199		203		195
Period End Ship Count		207		204		207		204
Average Weekly Revenue Per Ship	$	99,965	$	95,675	$	96,203	$	91,014
Average Revenue Per Shipboard Staff Per Day	$	639	$	622	$	620	$	598
Revenue Days		18,921		18,338		55,456		53,165
Average Resort Count		23		50		31		50
Period End Resort Count		23		49		23		49
Average Weekly Revenue Per Resort	$	18,511	$	10,794	$	17,737	$	12,998

Key Financial Definitions

Revenues. Revenues consist primarily of sales of services and sales of products to cruise ship passengers and destination resort guests. The following is a brief description of the components of our revenues:

•

Service revenues. Service revenues consist primarily of sales of health and wellness, aesthetics and fitness services, including a full range of body care, skin care, hair care, cosmetics, medi-spa, acupuncture, systemic detoxification and nutrition regimens, and mindfulness services, among others, to cruise ship passengers and destination resort guests. We bill our services at rates which inherently include an immaterial charge for products used in the rendering of such services, if applicable.

•

Product revenues. Product revenues consist primarily of sales of health, wellness, aesthetics and fitness related products, such as facial skincare, body care, orthotics and detox supplements to cruise ship passengers, destination resort guests and timetospa.com customers.

Cost of services. Cost of services consists primarily of an allocable portion of payments to cruise line partners (which are derived as a percentage of service revenues or a minimum annual rent or a combination of both), an allocable portion of wages paid to shipboard employees, an allocable portion of staff-related shipboard expenses, wages paid directly to destination resort employees, payments to destination resort partners, the allocable cost of products consumed in the rendering of services, and health and wellness center depreciation. Cost of services has historically been highly variable; increases and decreases in cost of services are primarily attributable to corresponding increases or decreases in service revenues. Cost of services has remained generally consistent as a percentage of service revenues.

Cost of products. Cost of products consists primarily of the cost of products sold through our various methods of distribution, an allocable portion of wages paid to shipboard employees and an allocable portion of payments to cruise line and destination resort partners (which are derived as a percentage of product revenues or a minimum annual rent or a combination of both). Cost of products has historically been highly variable; increases and decreases in cost of products are primarily attributable to corresponding increases or decreases in product revenues and includes impairment of the carrying value of inventories. Cost of products has remained generally consistent as a percentage of product revenues.

Administrative. Administrative expenses are comprised of expenses associated with corporate and administrative functions that support our business, including fees for professional services, insurance, headquarters rent and other general corporate expenses.

Salaries, benefits and payroll taxes. Salaries, benefits and payroll taxes are comprised of employee expenses associated with corporate and administrative functions that support our business, including fees for employee salaries, bonuses, stock-based compensation, payroll taxes, pension/401(k) and other employee costs.

Amortization of intangible assets. Amortization of intangible assets are comprised of the amortization of intangible assets with definite useful lives (e.g. retail concession agreements, destination resort agreements, licensing agreements).

Interest expense, net. Interest expense, net consists of interest income and interest expense.

Income tax expense. Income tax expense consists of current and deferred U.S. federal, state and local income taxes, as well as foreign income and withholding taxes in the various jurisdictions in which we operate. A significant portion of our income is earned in jurisdictions that are not subject to income taxes.

Net income. Net income consists of income from operations less other expense and income tax expense.

Revenue Drivers and Business Trends

Our revenues and financial performance are impacted by a multitude of factors, including, but not limited to:

•

The number of health and wellness centers we operate on cruise ships and in destination resorts. The number of cruise ships on which we operate during each period is primarily impacted by our renewal of existing cruise line partner agreements, introductions of new ships to service under our existing agreements, agreements with new cruise line partners, ships temporarily out of service for maintenance and repair, ships temporarily out of service undergoing enhancements to their facilities and operations, including enhancements to our health and wellness centers, ships and itineraries impacted by temporary adverse weather conditions, and ships prevented from sailing due to outbreaks of illnesses, among other factors. The number of destination resorts in which we operate during each period is primarily attributable to renewal of existing agreements with destination resort partners, certain of our health and wellness centers undergoing renovations to enhance operations, and destination resorts temporarily prevented from operating due to adverse weather conditions and outbreaks of illnesses, among other factors.

•

The size and offerings of new and enhanced health and wellness centers. We have focused on innovating and implementing higher value added and price point services such as medi-spa and advanced facial techniques, which require treatment rooms equipped with specific equipment and staff trained to perform these services. As our cruise line partners continue to invest in new ships and optimize existing vessels with enhanced health and wellness centers that allow for more advanced treatment rooms and larger staff sizes, we are able to increase the availability of these services, driving an overall shift towards a more profitable service mix.

•

Expansion of value-added services and products and increased pricing across modalities in existing health and wellness centers. We continue to introduce and expand our higher value added and price point offerings in existing health and wellness centers, including introducing premium medi-spa, acupuncture, light therapies and advanced skin care services, among other services and products innovations, resulting in higher guest demand and spending. In addition, we continue to evaluate our pricing architecture selectively across our services and products.

•

The mix of ship count across contemporary, premium, luxury and budget categories. Revenue generated per shipboard health and wellness center differs across contemporary, premium, luxury and budget ship categories due to the size of the health and wellness centers, services offered and guest socioeconomic factors.

•

The mix of cruise itineraries. Revenue generated per shipboard health and wellness center is influenced by cruise itinerary, including length of cruise, number of sea days versus port days, which impacts center utilization, and the geographic sailing region, which may impact ship category and offerings of services and products to align with guest socioeconomic mix and preferences.

•

Collaboration with cruise line partners, including targeted marketing and promotion initiatives, as well as implementation of proprietary technologies to increase center utilization via pre-booking and pre-payment of health and wellness services. We directly market and promote to onboard passengers as a result of increasing collaboration with our cruise line partners. We also utilize our proprietary health and wellness services pre-booking and pre-payment technology platforms integrated with certain of our cruise line partners’ pre-cruise planning systems. These areas of increased collaboration with cruise line partners are resulting in higher productivity, revenue generation, and profitability across our health and wellness centers.

•

The impact of weather. Our health and wellness centers onboard cruise ships and in select destination resorts may be negatively affected by the frequency and intensity of hurricanes, which may be impacted by climate change. The negative impact of hurricanes in the Northern Hemisphere is highest during peak season, from August through October.

•

Our revenues and financial performance may be impacted by other risks and uncertainties, including, without limitation, those set forth under the section entitled “Risk Factors” in Part I, Item 1A of the Company’s 2025 Form 10-K.

The effect of each of these factors on our revenues and financial performance varies from period to period.

Recent Accounting Pronouncements

Refer to Note 2 to the Condensed Consolidated Financial Statements in this report for a discussion of recent accounting pronouncements.

Results of Operations


	Three Months Ended September 30, 2026			% of Total Revenue			Three Months Ended September 30, 2025			% of Total Revenue
(in thousands, except per share amounts)
REVENUES:
Service revenues	$	226,378			82	%	$	208,042			80	%
Product revenues		50,154			18	%		50,476			20	%
Total revenues		276,532			100	%		258,518			100	%
COST OF REVENUES AND OPERATING EXPENSES:
Cost of services		184,263			67	%		172,077			67	%
Cost of products		42,568			15	%		42,858			17	%
Administrative		6,952			3	%		4,568			2	%
Salaries, benefits and payroll taxes		8,720			3	%		8,402			3	%
Amortization of intangible assets		4,079			1	%		4,131			2	%
Long-lived assets impairment		—			0	%		180			0	%
Total cost of revenues and operating expenses		246,582			89	%		232,216			90	%
Income from operations		29,950			11	%		26,302			10	%
INTEREST EXPENSE, NET		(1,179	)		0	%		(1,379	)		(1	)%
Income before income tax expense		28,771			10	%		24,923			10	%
INCOME TAX EXPENSE		530			0	%		578			0	%
NET INCOME	$	28,241			10	%	$	24,345			9	%
NET INCOME PER SHARE:
Basic	$	0.28					$	0.24
Diluted	$	0.28					$	0.23
WEIGHTED-AVERAGE SHARES OUTSTANDING:
Basic		101,416						103,156
Diluted		101,864						103,618

Comparison of Results for the three months ended September 30, 2026 compared to three months ended September 30, 2025

Revenues. Total revenues increased 7% to $276.5 million compared to $258.5 million in the third quarter of 2025, driven by a 3.3% increase in average guest spend, fleet expansion due to 2026 vessel newbuilds, and higher volumes, primarily reflecting a 1.8% increase in revenue days net of 2026 fleet expansion and an increase in guest count, contributing $8.2 million, $7.0 million and $4.3 million, respectively, to the increase in total revenues for the period. Contributing to the increased volume and spend was $6.9 million in increased pre-booked revenues at health and wellness centers included in our ship count as of September 30, 2026. Growth in our maritime total revenues was partially offset by a $1.4 million decrease in our destination resorts total revenues, due in part to the closure of hotels where we had previously operated. The decrease in product revenues was driven by the previously announced reorganization of operations in the United Kingdom and Italy, which decreased product revenues by $1.3 million.

The breakdown of revenue growth between service and product revenues was as follows:

•

Service revenues. Service revenues for the three months ended September 30, 2026 were $226.4 million, an increase of $18.3 million, or 9%, compared to $208.0 million for the three months ended September 30, 2025.

•

Product revenues. Product revenues for the three months ended September 30, 2026 were $50.2 million, a decrease of $0.3 million, or (1)%, compared to $50.5 million for the three months ended September 30, 2025.

Cost of services. Cost of services for the three months ended September 30, 2026 was $184.3 million, an increase of $12.2 million, or 7%, compared to $172.1 million for the three months ended September 30, 2025. The increase was primarily attributable to costs associated with increased Service revenues of $226.4 million in the quarter from our operating health and wellness centers at sea and on land, compared with Service revenues of $208.0 million in the third quarter of 2025.

Cost of products. Cost of products for the three months ended September 30, 2026 was $42.6 million, a decrease of $0.3 million, or (1)%, compared to $42.9 million for the three months ended September 30, 2025. The decrease was primarily attributable to costs associated with decreased Product revenues of $50.2 million in the quarter from our operating health and wellness centers at sea and on land, compared to Product revenues of $50.5 million in the third quarter of 2025.

Administrative. Administrative expenses for the three months ended September 30, 2026 were $7.0 million, an increase of $2.4 million, or 52%, compared to $4.6 million for the three months ended September 30, 2025. The increase was primarily due to $2.1 million in third-party fees for certain management and logistics services as a result of our previously announced restructuring, which were previously performed internally by company staff, and as such, the related costs have shifted from Salaries, benefits and payroll taxes to Administrative.

Salaries, benefits and payroll taxes. Salaries, benefits and payroll taxes for the three months ended September 30, 2026 were $8.7 million, an increase of $0.3 million, or 4%, compared to $8.4 million for the three months ended September 30, 2025. The increase was primarily attributable to annual merit increases and higher incentive-based compensation, partially offset by a reduction in internal personnel costs resulting from the transition of certain management and logistics services to third-party providers.

Amortization of intangible assets. Amortization of intangible assets was $4.1 million for each of the three-month periods ended September 30, 2026 and 2025.

Interest expense, net. Interest expense, net was $1.2 million for the three months ended September 30, 2026, compared to $1.4 million for the three months ended September 30, 2025. The decrease was primarily due to a $15.0 million reduction in the principal balance of the Term Loan Facility since September 30, 2025, including $13.8 million of voluntary prepayments during the nine months ended September 30, 2026, of which $11.3 million was prepaid in the third quarter of 2026, which satisfied all remaining scheduled amortization prior to maturity.

Income tax expense. Income tax expense was $0.5 million and $0.6 million for the three months ended September 30, 2026 and 2025, respectively.

Net income. Net income for the three months ended September 30, 2026 was $28.2 million, an increase of $3.9 million, or 16%, compared to a net income of $24.3 million for the three months ended September 30, 2025. This increase was primarily attributable to a $3.6 million improvement in operating income and a $0.2 million decrease in interest expense, net, as discussed above.


	Nine Months Ended September 30, 2026			% of Total Revenue			Nine Months Ended September 30, 2025			% of Total Revenue
(in thousands, except per share amounts)
REVENUES:
Service revenues	$	644,449			82	%	$	579,919			81	%
Product revenues		140,960			18	%		138,955			19	%
Total revenues		785,409			100	%		718,874			100	%
COST OF REVENUES AND OPERATING EXPENSES:
Cost of services		529,470			67	%		481,481			67	%
Cost of products		120,168			15	%		118,139			16	%
Administrative		20,344			3	%		13,191			2	%
Salaries, benefits and payroll taxes		25,889			3	%		28,218			4	%
Amortization of intangible assets		12,211			2	%		12,399			2	%
Long-lived assets impairment		—			0	%		180			0	%
Total cost of revenues and operating expenses		708,082			90	%		653,608			91	%
Income from operations		77,327			10	%		65,266			9	%
INTEREST EXPENSE, NET		(3,418	)		0	%		(3,921	)		(1	)%
Income before income tax expense		73,909			9	%		61,345			9	%
INCOME TAX EXPENSE		1,123			0	%		1,789			0	%
NET INCOME	$	72,786			9	%	$	59,556			8	%
NET INCOME PER SHARE
Basic	$	0.71					$	0.57
Diluted	$	0.71					$	0.57
WEIGHTED-AVERAGE SHARES OUTSTANDING:
Basic		101,814						103,651
Diluted		102,216						104,100

Comparison of Results for the nine months ended September 30, 2026 compared to nine months ended September 30, 2025

Revenues. Total revenues increased 9% to $785.4 million compared to $718.9 million for the nine months ended September 30, 2025, driven by a 1.9% increase in average guest spend, fleet expansion due to 2026 vessel newbuilds, and higher volumes, primarily reflecting a 3.0% increase in revenue days net of 2026 fleet expansion and an increase in guest count, contributing $15.9 million, $13.0 million and $41.9 million, respectively, to the increase in total revenues for the period. Contributing to the increased volume and spend was $17.0 million in increased pre-booked revenues at health and wellness centers included in our ship count as of September 30, 2026. Growth in our maritime total revenues was partially offset by a $3.9 million decrease in our destination resorts total revenues, due in part to the closure of hotels where we had previously operated.

The breakdown of revenue growth between service and product revenues was as follows:

•

Service revenues. Service revenues for the nine months ended September 30, 2026 were $644.4 million, an increase of $64.5 million, or 11%, compared to $579.9 million for the nine months ended September 30, 2025.

•

Product revenues. Product revenues for the nine months ended September 30, 2026 were $141.0 million, an increase of $2.0 million, or 1%, compared to $139.0 million for the nine months ended September 30, 2025.

Cost of services. Cost of services for the nine months ended September 30, 2026 was $529.5 million, an increase of $48.0 million, or 10%, compared to $481.5 million for the nine months ended September 30, 2025. The increase was primarily attributable to costs associated with increased Service revenues of $644.4 million in the nine months ended September 30, 2026 from our operating health and wellness centers at sea and on land, compared with Service revenues of $579.9 million in the nine months ended September 30, 2025.

Cost of products. Cost of products for the nine months ended September 30, 2026 was $120.2 million, an increase of $2.0 million, or 2%, compared to $118.1 million for the nine months ended September 30, 2025. The increase was primarily attributable to costs associated with increased Product revenues of $141.0 million in the nine months ended September 30, 2026 from our operating health and wellness centers at sea and on land, compared to Product revenues of $139.0 million in the nine months ended September 30, 2025.

Administrative. Administrative expenses for the nine months ended September 30, 2026 were $20.3 million, an increase of $7.2 million, or 54%, compared to $13.2 million for the nine months ended September 30, 2025. The increase was primarily due to $6.0 million in third-party fees for certain management and logistics services as a result of our previously announced restructuring, which were previously performed internally by company staff, and as such, the related costs have shifted from Salaries, benefits and payroll taxes to Administrative.

Salaries, benefits and payroll taxes. Salaries, benefits and payroll taxes for the nine months ended September 30, 2026 were $25.9 million, a decrease of $2.3 million, or (8)%, compared to $28.2 million for the nine months ended September 30, 2025. The decrease was primarily attributable to the non-recurrence of $2.5 million in separation-related expenses incurred during the first quarter of 2025 associated with the termination of employment of the Company’s former Chief Commercial Officer. The variance also reflects a reduction in internal personnel costs in the nine months ended September 30, 2026 resulting from the transition of certain management and logistics services to third-party providers, as discussed above, partially offset by annual merit increases and higher incentive-based compensation.

Amortization of intangible assets. Amortization expense was $12.2 million and $12.4 million for the nine-month periods ended September 30, 2026 and 2025, respectively.

Interest expense, net. Interest expense, net was $3.4 million for the nine months ended September 30, 2026, compared to $3.9 million for the nine months ended September 30, 2025. The decrease was primarily due to a $15.0 million reduction in the principal balance of the Term Loan Facility since September 30, 2025, including $13.8 million of voluntary prepayments during the nine months ended September 30, 2026, which satisfied all remaining scheduled amortization prior to maturity.

Income tax expense. Income tax expense for the nine months ended September 30, 2026 was $1.1 million, a decrease of $0.7 million, or (37)%, compared to $1.8 million for the nine months ended September 30, 2025. The decrease was primarily attributable to exiting certain jurisdictions with tax rates higher than our global effective tax rate.

Net income. Net income for the nine months ended September 30, 2026 was $72.8 million, an increase of $13.2 million, or 22%, compared to net income of $59.6 million for the nine months ended September 30, 2025. This increase was primarily attributable to a $12.1 million improvement in operating income, a $0.7 million decrease in income tax expense, and a $0.5 million decrease in interest expense, net, as discussed above.

Liquidity and Capital Resources

Overview

We fund our operations principally with cash flow from operations. Our principal uses for our liquidity during the nine months ended September 30, 2026 included (i) funding investment in support of the operations of our health and wellness centers onboard cruise ships and in destination resorts, including working capital and capital expenditures for technology, infrastructure, and global operating infrastructure; (ii) $37.5 million of share repurchases, which completed the 2025 Share Repurchase Program; (iii) $13.8 million in voluntary prepayments on our Term Loan Facility; and (iv) the payment of $15.2 million in dividends.

As of September 30, 2026, we had $48.8 million available under the Revolving Facility, net of a $1.2 million outstanding standby letter of credit, and no borrowings outstanding. We have concluded that our existing cash and available credit facilities, combined with cash flow from operations, will be sufficient to satisfy our existing and planned capital requirements and to comply with all debt covenants as required by our debt agreements over the next twelve months and for the foreseeable future beyond that period. Additional information regarding our Revolving Facility, letter of credit capacity, and debt covenants is included in the notes to our condensed consolidated financial statements.

Cash Flows

The following table shows summary cash flow information for the nine months ended September 30, 2026 and the nine months ended September 30, 2025.



(in thousands)	Nine Months Ended September 30, 2026			Nine Months Ended September 30, 2025

Net income	$	72,786		$	59,556
Depreciation and amortization		20,887			18,840
Long-lived assets impairment		—			180
Amortization of deferred financing costs		311			356
Stock-based compensation		7,560			7,751
Provision for doubtful accounts		12			14
Loss from write-offs of property and equipment		18			—
Noncash lease expense (income)		(31	)		12
Changes in working capital		(13,375	)		(23,145	)
Net cash provided by operating activities		88,168			63,564
Capital expenditures		(8,810	)		(10,024	)
Cash received in connection with divestiture		1,828			—
Net cash used in investing activities		(6,982	)		(10,024	)
Repurchase of common shares		(37,549	)		(55,533	)
Repayment on first lien and term loan facilities		(13,756	)		(13,750	)
Payment of deferred financing costs		—			(9	)
Dividends		(15,227	)		(12,403	)
Net cash used in financing activities		(66,532	)		(81,695	)
Effect of exchange rates		(16	)		272
Net increase (decrease) in cash, cash equivalents and restricted cash	$	14,638		$	(27,883	)

Comparison of Results for the nine months ended September 30, 2026 and 2025

Operating activities. Net cash provided by operating activities was $88.2 million and $63.6 million for the nine months ended September 30, 2026 and 2025, respectively, an increase of $24.6 million. This increase was due to a $14.8 million increase in net income, net of non-cash items, and a $9.8 million favorable change in working capital.

The increase in net income, net of non-cash items was primarily attributable to: (i) increased revenues resulting from a higher number of health and wellness center guests on our existing fleet, expansion of our fleet, and higher guest spend; and (ii) reduced interest expense attributable to lower debt balances. For further discussion, see “Results of Operations” above.

The $9.8 million favorable change in working capital reflected cash outflows of $13.4 million and $23.1 million for the nine months ended September 30, 2026 and 2025, respectively.

The $13.4 million cash outflow from working capital for the nine months ended September 30, 2026 was primarily driven by: (i) a $4.0 million increase in other current assets, primarily related to estimated income tax payments and the timing of collections of other receivables; (ii) a $5.6 million increase in other non-current assets, primarily reflecting capitalized contract costs paid to enter into new contracts or to renew long-term contracts; (iii) a $2.6 million increase in accounts receivable due to higher revenues relative to the prior year period; (iv) a $2.0 million increase in prepaid expenses, primarily due to an increase in prepaid software costs; and (v) a $1.2 million increase in inventories, reflecting increased purchases due to revenue growth and in anticipation of increased shipments in the fourth quarter of 2026. These outflows were partially offset by a $2.7 million increase in accrued expenses, primarily related to the timing of payments, including accrued contract costs for new long-term agreements. The remaining changes in working capital, including accounts payable, contributed an additional $0.7 million net use of cash.

The $23.1 million cash outflow from working capital for the nine months ended September 30, 2025 was primarily driven by: (i) a $16.5 million increase in inventories, driven by strategic purchases to secure favorable pricing from certain suppliers ahead of their scheduled annual price increase, as well as to support expanded procurement for new health and wellness centers on cruise line partners’ ships launched during 2025; (ii) a $3.7 million increase in other non-current assets, primarily reflecting capitalized contract costs paid to enter into new contracts or to renew long-term contracts; (iii) a $2.6 million use of cash related to prepaid expenses; and (iv) a $1.7 million increase in accounts receivable due to higher revenues with respect to the prior year period. These outflows were partially offset by a $4.8 million increase in accounts payable, primarily related to the timing of vendor payments. The remaining changes in working capital, including accrued expenses and other current assets, contributed an additional $3.4 million net use of cash.

Investing activities. Our net cash used in investing activities for the nine months ended September 30, 2026 and 2025 was $7.0 million and $10.0 million, respectively. The decrease in cash used was primarily driven by lower capital expenditures of $8.8 million, compared to $10.0 million in the prior year period, as we continued to invest in technology hardware and software, including artificial intelligence, and $1.8 million in proceeds received from the divestiture of two immaterial subsidiaries previously disclosed in our 2025 Form 10-K.

Financing activities. Our net cash used in financing activities for the nine months ended September 30, 2026 and 2025 was $66.5 million and $81.7 million, respectively. For the nine months ended September 30, 2026, the Company utilized $37.5 million to repurchase 1,428,708 shares of our common stock, made $13.8 million in voluntary prepayments on the Term Loan Facility and paid dividends of $15.2 million. For the nine months ended September 30, 2025, the Company utilized $55.5 million to repurchase 2,910,000 shares of our common stock, repaid $13.8 million on the Term Loan Facility and paid dividends of $12.4 million.

Seasonality

A significant portion of our revenues are generated onboard cruise ships and are subject to specific individual cruise itineraries, as to time of year and geographic location, among other factors. As a result, we experience varying degrees of seasonality as the demand for cruises is stronger in the Northern Hemisphere during the summer months and during holidays. Accordingly, the third quarter and holiday periods generally result in our highest revenue yields. Further, cruises and destination resorts have been negatively affected by the frequency and intensity of hurricanes, which may be impacted by climate change. The negative impact of hurricanes in the Northern Hemisphere is highest during peak season, from August through October.

Contractual Obligations

As of September 30, 2026, our future contractual obligations have not changed significantly from the amounts disclosed in our 2025 Form 10-K.

Critical Accounting Policies

Management’s discussion and analysis of financial condition and results of operations is based upon our condensed consolidated unaudited financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated unaudited financial statements and the reported amount of revenues and expenses during the reporting period. Actual results may differ from these estimates under different assumptions or conditions. At least quarterly, management reevaluates its judgments and estimates, which are based on historical experience, current trends and various other assumptions that are believed to be reasonable under the circumstances.

Our critical accounting policies are included in our 2025 Form 10-K. We believe that there have been no significant changes during the nine months ended September 30, 2026 to the critical accounting policies disclosed in our 2025 Form 10-K.

Inflation and Economic Conditions

We do not believe that inflation has had a material adverse effect on our revenues or results of operations. However, public demand for activities, including cruises, is influenced by general economic conditions, including inflation, global concerns regarding health, and customer preferences. Periods of economic softness could have a material adverse effect on the cruise industry and hospitality industry upon which we are dependent and could adversely affect our results of operations and financial condition. Severe adverse economic conditions, increases in inflation rates and interest rates, as well as periods of fuel price increases, could have a material adverse effect on our business, results of operations and financial condition.

Cautionary Statement Regarding Forward-Looking Statements

From time to time, including in this report and other disclosures, we may issue “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements reflect our current views about future events and are subject to known and unknown risks, uncertainties and other factors which may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. We attempt, whenever possible, to identify these statements by using words like “will,” “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “forecast,” “future,” “intend,” “plan,” “estimate” and similar expressions of future intent or the negative of such terms.

Such forward-looking statements include, but are not limited to, statements regarding:

•

the Company’s business, competitive position and operations;

•

the Company’s results of operations and financial condition, including cash flows and liquidity;

•

consumer demand or the markets for the Company’s services and products, together with the possibility that the Company may be adversely affected by economic, business, and/or competitive factors or changes in the business environment in which the Company operates;

•

potential future outbreaks of illnesses impacting the industries in which the Company operates;

•

economic, business, geopolitical, and/or competitive factors and the business environment in which the Company operates;

•

applicable laws or regulations;

•

competition for the Company’s services;

•

the availability and realization of opportunities for expansion of the Company’s business;

•

managing growth profitably;

•

dependence on the Company’s management team;

•

other risks and uncertainties included from time to time in the Company’s reports (including all amendments to those reports) filed with the U.S. Securities and Exchange Commission;

•

other risks and uncertainties indicated in our 2025 Form 10-K, including those set forth under the section entitled “Risk Factors”; and

•

other statements preceded by, followed by or that include the words “estimate,” “plan,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target” or similar expressions.

These forward-looking statements are based on information available as of the date of this report and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

For a discussion of our market risks, refer to Part II, Item 7A. - Quantitative and Qualitative Disclosures about Market Risk in our 2025 Form 10-K. There have been no material changes to our exposure to market risks since the date of our 2025 Form 10-K.

Item 4. Controls and Procedures

We carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as that term is defined in Rule 13a-15(e) of the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of September 30, 2026 to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in U.S. Securities and Exchange Commission rules and forms, and includes controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

The Company continued its post-implementation monitoring of the enterprise resource planning system implemented during the second quarter of 2026, which did not result in any change in internal control over financial reporting during the three months ended September 30, 2026. There has been no change in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended September 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

There have been no material changes in the risk factors previously disclosed in the Company’s 2025 Form 10-K, Part I, Item 1A. “Risk Factors.” However, the risks and uncertainties that we face are not limited to those set forth in the 2025 Form 10-K. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also materially and adversely affect our business and the trading price of our securities.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Share Repurchases

The following table provides information about our repurchases of common stock during the quarter ended September 30, 2026.


Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as a Part of Publicly Announced Plans or Programs (1)		Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans (in millions)
July 1, 2026-July 31, 2026		—		—		—	$	37.2
August 1, 2026-August 31, 2026		1,412,574	$	26.28		1,412,574	$	—
September 1, 2026-September 30, 2026		—		—		—	$	—
Total		1,412,574				1,412,574

(1) On April 23, 2025, the Board of Directors approved a share repurchase program to repurchase up to $75.0 million of the Company’s common stock (the “2025 Share Repurchase Program”). In August 2026, the Company completed the 2025 Share Repurchase Program, and as of September 30, 2026, no amount remained available for future repurchases under the program. On October 20, 2026, the Board of Directors approved a new share repurchase program authorizing the Company to repurchase up to $100 million of its common stock. Refer to Note 5, “Equity,” and Note 13, “Subsequent Events,” in Part I, Item 1, “Financial Statements,” for additional information. Average price paid per share excludes commissions and other transaction costs.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Stephen Lazarus, the Company’s President, Chief Financial Officer and Chief Operating Officer, entered into a Rule 10b5-1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c) on August 12, 2026. The plan provides for the sale of up to 174,552 shares of the Company’s common stock in the period commencing on November 12, 2026 and ending on the earlier of August 13, 2027 or the execution of all trades contemplated by the plan.

Item 6. Exhibits


Exhibit No.

31.1*		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Section 1350 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


Commonwealth of The Bahamas		Not Applicable
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Harry B. Sands, Lobosky Management Co. Ltd. Office Number 2 Pineapple Business Park Airport Industrial Park P.O. Box N-624 Nassau, Island of New Providence, Commonwealth of The Bahamas		Not Applicable
(Address of principal executive offices)		(Zip Code)


32.2**		Section 1350 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

104		The cover page for the Company’s Quarterly Report on Form 10-Q has been formatted in Inline XBRL and contained in Exhibit 101


ONESPAWORLD HOLDINGS LIMITED

By:		/s/ Leonard Fluxman
		Leonard Fluxman
		Executive Chairman, Chief Executive Officer and Director
		Principal Executive Officer

By:		/s/ STEPHEN B. LAZARUS
		Stephen B. Lazarus
		President, Chief Financial Officer and Chief Operating Officer
		Principal Financial and Accounting Officer


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


		Page
PART I - FINANCIAL INFORMATION		1

Item 1.	Unaudited Financial Statements	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	28

Item 4.	Controls and Procedures	28

PART II - OTHER INFORMATION		29

Item 1.	Legal Proceedings	29

Item 1A.	Risk Factors	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 4.	Mine Safety Disclosures	29

Item 5.	Other Information	29

Item 6.	Exhibits	29