Good morning, and welcome to the OneSpaWorld Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. All participants will be in listen-only mode. Please note, this event is being recorded. I would now like to turn the conference over to Allison Malkin, Investor Relations. Please go ahead.

Thank you. Good morning, and welcome to OneSpaWorld's Fourth Quarter and Fiscal Year 2025 Earnings Call and Webcast. Before we begin, I'd like to remind you that certain statements and information made available on today's call and webcast may be deemed to constitute forward-looking statements. These forward-looking statements reflect our judgment and analysis only as of today, and actual results may differ materially from current expectations based on a number of factors affecting our business. Accordingly, you should not place undue reliance on these forward-looking statements. For a more thorough discussion of the risks and uncertainties associated with the forward-looking statements to be made in this conference call and webcast, we refer you to the disclaimer regarding forward-looking statements that is included in our fourth quarter and fiscal year 2025 earnings release, which was furnished to the SEC today on Form 8-K. We do not undertake any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, the company may refer to certain adjusted non-GAAP metrics on this call. An explanation of these metrics can be found in our earnings release issued earlier this morning. Joining me today are Leonard Fluxman, Executive Chairman and Chief Executive Officer; and Stephen Lazarus, President, Chief Operating Officer and Chief Financial Officer. Leonard will begin with a review of our fourth quarter 2025 performance and provide an update on our key priorities for 2026. Then Stephen will provide more details on the financials and guidance. Following our prepared remarks, we will turn the call over to the operator to begin the question-and-answer portion of the call. I would now like to turn the call over to Leonard.

Thank you, Allison. Good morning, and welcome to OneSpaWorld's Fourth Quarter and Fiscal Year 2025 Earnings Call. It's a pleasure to speak with you all today about our record fourth quarter. This period capped a year of exceptional performance driven by innovation across our global operations and the delivery of extraordinary guest experiences, resulting in excellent outcomes for our cruise line and destination resort partners. During the quarter, we advanced our strategic priorities, driving growth in key metrics and introducing two new ship builds. This further solidified our market leadership and led to double-digit growth in total revenues and adjusted EBITDA. Our unique capabilities and successful strategy have produced 19 consecutive quarters of year-over-year growth, marking our fourth consecutive year of record performance for both metrics. We continue to seek ways to enhance our positioning, improve efficiency, and accelerate growth. This includes our innovation efforts, the integration of AI, and the reorganization of certain operations. We strategically decided to exit land-based health and wellness centers in Asia and reorganized our operations in the United Kingdom and Italy, positioning us well to achieve our objectives. As we enter 2026, we are strongly positioned to maximize our leading role as the top operator of health and wellness centers at sea. I am extremely proud of our team's efforts in delivering year-end results and am confident that the upcoming year will reflect another period of impressive performance. At year-end, we operated health and wellness centers on 206 ships, with an average ship count of 199 for the quarter, compared to 199 ships at year-end and an average of 188 ships in fiscal 2024. We also had 4,582 cruise ship personnel on vessels at year-end, up from 4,352 at the end of fiscal 2024. Alongside our strong financial performance, this quarter showcased significant progress toward our key strategic objectives. I would like to outline some highlights. First, we captured visible new ship growth with our current cruise line partners. We continued to strengthen our market position by introducing two health and wellness centers on the new ship builds Disney Destiny and Star Seeker during the quarter, bringing our total to eight ship builds for the year. In 2026, we will launch health and wellness centers on six new ships, with three expected to start voyages in the first half of the year. Next, we are expanding our higher-value services and products, such as Medi-Spa and Acupuncture, which broaden our addressable market and enhance revenue from ship builds. We are committed to introducing these services on more ships with the latest innovations. Our MedSpa services have seen innovation through the rollout of next-generation technology, including Thermage FLX, CoolSculpting Elite, and Acupuncture LED, which provide improved outcomes and reduce treatment time by up to 50%. These technologies generated revenue growth between 23% and 40% in Q4 compared to the previous year. Additionally, the use of LED light therapy alongside acupuncture remains popular. At year-end, Medi-Spa services were available on 153 ships, an increase from 147 at the end of fiscal 2024, and we expect to reach 157 ships by year-end 2026. Furthermore, we have concentrated on enhancing the productivity of our health and wellness centers. This is evident in the noticeable increases across key metrics, including revenue per passenger per day, weekly revenue, pre-cruise revenue, and revenue per staff per day. Our capacity to onboard and retain staff is driving this success. We are recognized as a desirable employer, creating an environment that fosters retention. Our strategies have led to a 4 percentage point increase in staff retention compared to 2024. Importantly, experienced staff generate significantly higher revenue than inexperienced staff. Lastly, we maintain a strong balance sheet, which, alongside our successful growth, has enabled us to pursue our capital allocation goals in the quarter. We have invested in future growth, returned value to shareholders, and reduced debt. Throughout the year, we returned nearly $93 million to shareholders through stock buybacks and dividends, while also decreasing our outstanding debt. Our asset-light business model consistently delivers after-tax free cash flow, which, combined with our positive growth outlook, positions us well to continue advancing our value creation goals. We remain confident in maintaining strong performance throughout 2026. Our optimistic outlook is bolstered by ongoing innovations in our products and services, the dedication of our staff to service excellence, and the integration of emerging AI technologies that strengthen our global positioning. These growth drivers will be enhanced by the annualization of new ships that entered service in 2025, including six that started voyages in the latter half of the year, alongside six new health and wellness centers that will begin voyages in 2026. In summary, we believe that our visible revenue growth, along with our disciplined execution of an asset-light business model, positions us favorably to achieve strong results for our stakeholders and shareholders in both the short and long term. As Stephen will discuss shortly, we have reaffirmed our guidance for 2026, anticipating total revenues, excluding those from restructured operations, and adjusted EBITDA to increase by high single digits at the midpoint of our range. I will now hand the call over to Stephen to provide additional details on our third-quarter financial results and guidance.

Thank you, Leonard. Good morning, everyone. We ended the year on a high note, delivering record performance in total revenues and adjusted EBITDA in the fourth quarter and continued strong and predictable cash flow generation. This record performance reflects our investment in breakthrough technology applications across our business, reinforcing our market-leading strengths and deepening our cruise line and resort partnerships. At year-end, we implemented strategic actions to focus operational and capital investment on our highest growth and most profitable operations, exiting land-based health and wellness centers in Asia and reorganizing operations in the United Kingdom and Italy. In addition, our initiatives in AI will serve to accelerate our strategic growth initiatives and increase efficiency, further building our revenue and profitability growth potential. Let me provide some highlights prior to reviewing our financials and guidance. First, as it relates to revenue enhancements. As I mentioned with our Q3 results, we have implemented a machine-learning algorithmic engine to improve revenue and utilization, which is progressing well. In addition, we recently began work that allows us to implement a true dynamic price optimization model that we will start to introduce with prebooking. Today, we have over 11,500 itineraries that are open for prebooking, which makes it virtually impossible to have true dynamic pricing with only humans involved. And we're confident that adding these genetic AI tools will improve utilization and yields. By leveraging advanced recommendations and algorithmic optimization, this initiative aims to unlock additional revenue and improve utilization. Second, on the operational efficiency and scalability side, we are seeing early success with our rollout of our onboard virtual assistant. This AI assistant helps our managers receive and respond to questions immediately and meaningfully reduce help desk hours. For example, this tool enables our managers to close voyages and start booking the next cruise faster than before. Currently, 80% of all questions are answered within seconds by the virtual assistant, which is compared to perhaps a day or more if only humans were involved. Our virtual assistance tool has now been deployed across 180 vessels, up from 40 vessels in the third quarter. Third, automation and streamlining are part of our broad efficiency initiative to continue to explore and develop solutions to reduce manual work simplify operations shoreside and improve scalability at our corporate locations. Although still in the early stages, our steering committee meets regularly to analyze different metrics such as time to implementation, cost of implementation, potential impact and difficulty, return on investment and the prioritization of where to focus next. This is very exciting work for all of us, has strong buy-in across our organization, and we hope will further enhance productivity, operational scalability and our key operating metrics over time. Overall, our AI initiatives demonstrate our commitment to leveraging cutting-edge technology to strengthen our market position and deliver value for our shareholders. Turning now to a review of the fourth quarter and fiscal year, starting with the quarter. Total revenue increased 11% to $242.1 million compared to $217.2 million for the fourth quarter of 2024. Growth was driven by fleet expansion from 2025 new ship builds, a 2% increase in revenue days and a 1% increase in average guest spend contributing $15.5 million, $8.7 million and $2.1 million, respectively, to the increase in total revenues. Of this, $2.8 million was attributable to increased guest spend from prebook services. Growth in our Maritime total revenue was offset by a $1.3 million decrease in destination resorts total revenue, partially due to the closure of hotels where we had previously operated. Cost of services increased $18.5 million attributable to the $21.5 million increase in service revenues compared to the fourth quarter of 2024. Cost of product increased $3.4 million attributable to the $3.4 million increase in product revenue compared to the fourth quarter of 2024, a $0.3 million quarter-over-quarter increase in freight expense related to the timing of purchases and $0.3 million of nonrecurring inventory write-off charges in the fourth quarter of 2025 related to the exit from our land-based health and wellness centers in Asia. Admin expenses were $4.9 million compared to $5.8 million in the fourth quarter of 2024, with the decrease being primarily attributable to higher professional fees incurred in the prior year quarter, including approximately $700,000 related to incremental public company costs such as Sarbanes-Oxley compliance. Salaries, benefits and payroll taxes were $8.9 million compared to $9.3 million in the fourth quarter of 2024. This decrease was primarily attributable to lower incentive-based compensation of approximately $500,000 compared to the fourth quarter of the prior year. Restructuring expenses were $2.7 million in the fourth quarter of 2025 attributable to the aforementioned reorganization of operations in the United Kingdom and Italy and the exiting of resort health and wellness operations in Asia. Long-lived asset impairment was $3 million compared to $400,000 in the fourth quarter of 2024. Due to exiting resort operations in Asia, the fourth quarter of 2025 included a $2.8 million impairment charge with respect to the value of associated long-lived assets: $2.2 million attributable to intangible assets and $600,000 attributable to property and equipment and right-of-use assets. Net income was $12.1 million or net income per diluted share of 12 cents as compared to net income of $14.4 million or net income per diluted share of 14 cents for the prior year. The decrease was primarily attributable to the recognition of these restructuring expenses and asset impairments totaling $5.7 million during the current quarter, partially offset by a $4.4 million improvement in income from operations. Adjusted net income was $24.3 million or adjusted net income per diluted share of 24 cents as compared to adjusted net income of $21.4 million or adjusted net income per diluted share of 20 cents in the fourth quarter of the prior year. And finally, adjusted EBITDA was $31.2 million compared to adjusted EBITDA of $26.7 million in the fourth quarter of 2024. For the fiscal year, total revenue of $961 million increased 7% compared to $895 million from the prior year. Adjusted net income rose 15% to $102.9 million or 99 cents per diluted share from adjusted net income of $89.7 million or $0.85 per diluted share in 2024. Adjusted EBITDA increased 10% to $123.3 million as compared to adjusted EBITDA of $112.1 million in fiscal 2024. Our strong balance sheet included total cash of $17.5 million at year-end, reflecting the disbursement of $17.5 million throughout the year in quarterly dividend payments, investment of $75.4 million to repurchase 3.9 million of our common shares and payment of $15 million on our term loan. In addition, we had full availability of our $50 million revolving line of credit, giving us total liquidity of $67.5 million at year-end. Total debt, net of deferred financing costs, was $84 million at December 31, 2025, compared to $98.6 million at December 31, 2024. Also, at quarter end, we had $37.5 million remaining on our prior $75 million share repurchase authorization. We expect the disciplined execution of our growth initiatives and strong cash flow generation driven by our asset-light business model to enable the payment of our ongoing quarterly dividend while evaluating opportunities to repurchase our shares and retire debt. We believe this positions us well to create long-term value for our shareholders. Turning now to guidance. We are reaffirming our fiscal 2026 outlook and begin the year with strong momentum and confidence to deliver another record performance. Based on our market outlook, outstanding team proven strategies and execution, scaling innovations, new ship builds and strong capitalization, we expect fiscal 2026 total revenues to exceed the $1 billion mark for the first time. Total revenues are expected in the range of $1.01 billion to $1.03 billion, representing high single-digit increases at the midpoint of our guidance range from actual 2025 results, excluding exited and reorganized operations mentioned previously. Adjusted EBITDA continues to be expected in the range of $128 million to $138 million, representing high single-digit increases at the midpoint of our guidance from actual fiscal 2025 results. And for the first quarter of 2026, we expect total revenue in the range of $241 million to $246 million, with adjusted EBITDA expected in the range of $30 million to $32 million. Please bear in mind that exited and reorganized revenue contributed $5.3 million to first-quarter 2025 revenue and $23 million to fiscal 2025 revenues. And with that, we will open the calls up for questions.

Our first question today is from Steve Wieczynski from Stifel.

This is Jackson Gibb on for Steve Wieczynski. I wanted to dig in a little further on the AI integration. And with another quarter under your belt, is there any more color you can give on the potential benefits you guys could realize from this investment, whether that's on the cost side or the revenue side? And any updated thoughts on how that might impact margins? Up to this point, you guys have kind of talked about these initiatives starting to show up meaningfully in the second half of 2026. Is that cadence still accurate? And would we be correct to assume you have not factored in any of this potential impact to current full-year guidance?

Yes, Jackson. As previously mentioned and you reiterated, we did say that we will begin to talk about that after our second quarter results with more specificity. So we remain on track to do that. We are encouraged, obviously, by the initial results, and that is reflected in the incremental rollout of these initiatives, two vessels and starting of additional initiatives as well. So we remain pleased with where we're at. And to your last point, yes, our current guidance does not include potential impact from these initiatives.

Okay. Got it. And then switching gears for my follow-up. I was hoping to get a little bit more detail around how consumer trends are shaping up, specifically attachment rates and how you're going about discounting. Are you seeing any differences worth calling out in these metrics or anything that stands out as far as changes in spend patterns across different brands, geographies, ship sizes, etc. And then how are you thinking about your ability to take price throughout 2026 relative to price action taken in 2025?

So I'll address the last part first. As you know, in 2025, we effectively did not take service price increases. We do always continue to evaluate that. And if there's an opportunity to do so. In 2026, we will certainly address and act on our comments. Again, from a guidance perspective, we are not assuming any service price increases embedded at this point in time. We'll see how things play out. With regards to the consumer, we had previously mentioned in the fourth quarter of last year, a little bit of softness in November, and we did not see that reoccur in December, which was great. So far year-to-date, we are definitely seeing overall higher prices being accepted by the consumer. So on a net basis, we are selling at a higher price. There may be slightly additional discounting. But at the end of the day, the net that's going to the customer in our facility remains high. And it's also therefore a reflection of, as you will have noted, our first quarter guidance, which we feel good about and is about consensus, and we think is a reflection of what we anticipate going forward with the consumer.

The next question is from Gregory Miller with Truist.

I'd like to start by asking about the dynamic price optimization model that you mentioned in your prepared remarks. Melissa, I didn't catch the details in your comments this morning. Have you spoken about the rollout specifics? Are there particular banners, itineraries, or vessels where you plan to implement this first, or will it be a broader rollout across the fleet?

Specifically, regarding that initiative, Greg, we will start with prebooking, which will cover 94% of the vessels currently on that prebooking platform. It's still in the early stages, but we're excited about it. The volume of itineraries available on the prebooking platform makes it nearly impossible for humans to have a true dynamic pricing impact that can adjust day-to-day or even hour to hour. So we're looking forward to rolling it out; once we finalize prebooking, there will be a quick rollout to the remaining vessels. Realistically, we're looking at the latter half of the year.

Okay. Shifting gears, I was on one of your ships recently. And I noticed that the spa menu appeared reformatted. It looked like the offerings were perhaps more condensed and just different stylistically than what I've seen in the past. And I'm curious if you have any intentions of a broader rollout of reformatting your spa menus in terms of the offerings that you're presenting to passengers on board.

No, we actually took a very proactive approach in that regard, and I'm glad you noticed. We decided to condense the options and focus guest choice on the more popular items rather than offering a full Chinese menu with everything available. This approach encourages guests to consider specific price points and time slots, making it more manageable and increasing conversion rates, especially around face and body treatments. Our strategy is to narrow the focus to the most popular treatments that we want to promote, which have higher retail attachments. We do not plan to broaden the menu because, based on our analysis, there is no benefit to having an extensive menu like we did three years ago.

Showing no further questions. This concludes our question-and-answer session. I would like to turn the conference back over to Leonard Fluxman for any closing remarks.

All right. Thank you, everybody, for joining us today. As Stephen mentioned, we've got off to a great start here in the first quarter and look forward to speaking with you all on our next investor call as well as conferences that we may attend through the first quarter entering the second quarter. So thank you, and look forward to speaking to you next time. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.