Q2 2024 OneSpaWorld Holdings Ltd Earnings Call

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Operator: Good day and welcome to the OneSpaWorld world 2nd quarter fiscal 2024 earnings call. All participants will be in a listen-only mode; should you need assistance, please signal the conference specialist by pressing the star key followed by zero.

Good day and welcome to the one small world second quarter fiscal 2024 earnings call.

Operator: Good day, and welcome to the OneSpaWorld second quarter fiscal 2024 earnings call. All participants will be in a listen-only mode.

Operator: Should you need assistance, please signal the conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your touch-tone phone. And to withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Ms. Allison Malkin of ICR. Please go ahead.

Speaker Change: Participants will be in a listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero after.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch tone phone. And to, if you are your question, please press star, then two.

Speaker Change: After todays presentation, there will be an opportunity to ask questions.

Speaker Change: To ask a question you May Press Star then one on your Touchtone phone. It's withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to MS. Allison Malkin of ICR. Please go ahead.

Operator: Please note this event is being reported.

Allison Malkin: I would now like to turn the conference over to Miss Allison Malkin of ICR. Please go ahead.

Allison C. Malkin: Thank you good morning, and welcome to the one style World second quarter 2024 earnings conference 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.

Allison Malkin: Thank you.

Allison C. Malkin: Thank you. Good morning, and welcome to OneSpaWorld's second quarter 2024 earnings conference 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.

Allison Malkin: Good morning and welcome to OneSpaWorld 2nd quarter 2024 earnings conference 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 statement. These forward-looking statements reflect our judgment and analysis only as of today. And actual results may differ materially from current expectation based on a number of factors affecting our business. Accordingly, you should not place undue reliance on these forward-looking statements.

Allison C. Malkin: 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 Arabic.

Allison C. Malkin: Accordingly, you should not place undue reliance on these forward looking statements.

Allison Malkin: For a more thorough discussion of the wrist 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 second quarter 2024 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.

Allison C. Malkin: 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 second quarter 2024 earnings release, which was furnished to the SEC today on Form 8K. 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.

Allison C. Malkin: 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 second quarter 2024 earnings release, which was furnished to the SEC today on.

Form 8-K.

Speaker Change: 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 and explanation of these metrics can be found in our.

Allison Malkin: 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.

Speaker Change: Our earnings release issued earlier this morning.

Allison Malkin: Joining me today are Leonard Fluxman, Executive Chairman, Chief Executive Officer, and President, and Stephen Lazarus, Chief Financial Officer and Chief Operating Officer. Leonard will begin with a review of our second quarter 2024 performance and provide an update on our key priorities. Then, Stephen will provide more details on the financials and fiscal year 2024 guidance.

Allison C. Malkin: Joining me today are Leonard Fluxman, Executive Chairman, Chief Executive Officer, and President, and Stephen Lazarus, Chief Financial Officer and Chief Operating Officer. Leonard will begin with a review of our second quarter 2024 performance and provide an update on our key priorities. Then Stephen will provide more details on the financials and fiscal year 2024 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.

Speaker Change: Joining me today are Leonard Flaxman, Executive Chairman, Chief Executive Officer, and President and Stephen Lazarus, Chief Financial Officer, and Chief Operating Officer, Leonard will begin with review of our second quarter 2024 performance and provide an update on our key priority.

Larry: Steven will provide more detail on the financial and fiscal year 2024 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 Larry.

Allison Malkin: Following our prepared remarks, we will turn the call over to the operator to begin the question-and-answer portion of the call.

Leonard Fluxman: I would now like to turn the call over to Leonard. Thank you, Alison.

Leonard: Thank you Alison good morning, and welcome to install well second quarter 2024 earnings conference call.

Leonard I. Fluxman: Thank you, Alison. Good morning, and welcome to OneSpaWorld's second quarter 2024 earnings conference call. It's a pleasure to speak to you all today to share another period of record performance. Our team delivered an outstanding second quarter, capping off an excellent first half of the year. The consistent strong performance of our business evidence is the power of our operating platform to provide unsurpassed guest experiences for our cruise line and destination resort partners, driven by our continued momentum and the scalability impact of our growth drivers.

Leonard Fluxman: Good morning and welcome to One-Spire-World second quarter 2024 earnings conference call. It's a pleasure to speak to you all today to share another period of record performance. Our team delivered an outstanding second quarter, capping off an excellent first half of the year. The consistent strong performance of our business evidence is the power of our operating platform to provide unsurpassed guest experiences for our cruise line and destination resort partners. And driven by our continued momentum and scaling impact of our growth drive-ins, we are once again increasing our annual guidance beyond the quarter's art performance.

Larry: It's a pleasure to speak to you all today to share another period of record performance.

Larry: Our team delivered an outstanding second quarter capping off an excellent first half of the year.

Speaker Change: The consistent strong performance of our business evidences the power of our operating platform.

Speaker Change: To provide unsurpassed guest experiences.

Speaker Change: Cruise line and destination resort partners and.

Speaker Change: And driven by continued momentum in scaling impact of our growth drivers. We are once again, increasing our annual guidance beyond the quarter's performance.

Leonard Fluxman: With earnings today, we also announced that our Board of Directors adopted an annual cash dividend program, which recognizes our ability to leverage our industry-leading operating platform, integrated growth initiatives, and asset-like business model to generate ongoing increases of the tax-free cash flow. Turning to the highlights of the quarter, total revenues increased 12% to record $224 million. $9 million compared to $200.5 million in the second quarter of 2023. Income from operations increased 40% to record $18.8 million compared to $13.4 million in the second quarter of 2023. Adjusted EBITDA increased 25% to $27.1 million compared to $21.6 million in the second quarter of 2023.

Speaker Change: With earnings today, we also announced that our board of directors adopted an annual cash dividend program.

Leonard I. Fluxman: We are once again increasing our annual guidance beyond the quarter's art performance. With earnings today, we also announced that our Board of Directors adopted an annual cash dividend program which recognizes our ability to leverage our industry-leading operating platform, integrated growth initiatives, and asset-like business model to generate ongoing increases in tax-free cash flow. Turning to the highlights of the quarter.

Speaker Change: Which recognizes our ability to leverage our industry, leading operating platform.

Speaker Change: <unk> growth initiatives and asset like business model to generate ongoing increasing after tax free cash flow.

Speaker Change: Turning to the highlights of the quarter.

Leonard I. Fluxman: Total revenues increased 12% to a record $224.9 million compared to $200.5 million in the second quarter of 2023. Income from operations increased 40% to a record $18.8 million compared to $13.4 million in the second quarter of 2023. Adjusted EBITDA increased 25% to $27.1 million compared to $21.6 million in the second quarter of 2023. And unlevered after tax-free cash flow increased 18% to $23.8 million compared to $20.1 million in the second quarter of 2023. The unlevered off the tax free cash flow conversion rate was 88% in the second quarter of 2024.

Speaker Change: Total revenues increased 12% to a record 224 million nine.

Speaker Change: A million dollars compared to $205 million in the second quarter of 2023.

Speaker Change: Income from operations increased 40% to a record $18 8 million compared to $13 $4 million in the second quarter of 2023.

Speaker Change: Adjusted EBITDA increased 25%.

Speaker Change: To $27 $1 million compared to 21 6 million in the second quarter of 2023.

Leonard Fluxman: An unleavened off-to-tax-free cash flow increased 18% to $23.8 million compared to $20.1 million in the second quarter of 2023. The unleavened off-to-tax-free cash flow conversion rate was 88% in the second quarter of 2024. The expansion in our ship count continued during the period. At quarter end, we had health and wellness centers on 197 ships with an average ship count of 188 ships for the quarter, compared with 183 ships and an average ship count of 177 ships in the second quarter of 2023. At quarter end, we had 4,300 crew ship personnel on vessels compared with 3,813 crew ship personnel on vessels at the end of the second quarter of 2023.

Speaker Change: And Unlevered after tax free cash flow increased 18% to $23 $8 million compared to $21 million in the second quarter of 2023.

Speaker Change: The Unlevered after tax free cash flow conversion rate was 88% in the second quarter of 2020 full.

Speaker Change: The expansion in our ship count continued during the period at quarter end.

Leonard I. Fluxman: The expansion in our ship count continued during the period. At quarter end, we had health and wellness centers on 197 ships, with an average ship count of 188 ships for the quarter, compared with 183 ships and an average ship count of 177 ships in the second quarter of 2023. At quarter end, we had 4,300 cruise ship personnel on vessels, compared with 3,813 cruise ship personnel and vessels at the end of the second quarter of 2023. The quarter included continued progress towards our key strategic priorities. Let me share some highlights.

Speaker Change: We had health and wellness centers on 197 ships with an average ship count of 188 ships for the quarter.

Speaker Change: Compared with 180, 883 shifts and an average ship count of 177 ships in the second quarter of 2023.

Speaker Change: At quarter end, we had 4300 cruise ship personnel on vessels.

Speaker Change: Compared with 3813 cruise ship personnel and vessels at the end of the second quarter of 2023.

Leonard Fluxman: The quarter included continued progress towards our key strategic priorities. Let me share some highlights with you. First, we captured highly visible new ship growth with current cruise line partners and added new cruise line partnerships to our fold. To this end, in the second quarter, we opened health and wellness centers on two new ship boats, one with Kuhnod and the other with Silver Sea Cruisers. This follows the opening of our health and wellness centers on the Icon of the Seas and Sun Princess in the first quarter, bringing our year-to-date new boats to pour. We continue to expect to end fiscal 2024, operating on board 198 vessels.

Speaker Change: The quarter included continued progress towards our key strategic priorities, let me share. Some highlights with you first captured highly visible new ship growth with Carnival cruise line partners and added new cruise line partnership saw fold.

Leonard I. Fluxman: First, we captured highly visible new ship growth with current cruise line partners and added new cruise line partnerships to our fold. To this end, in the second quarter, we opened health and wellness centers on two new shipbuilds. One with Cunard and the other with Silver Sea Cruises.

Speaker Change: To this end in the second quarter, we opened health and wellness centers on two new ship books.

Speaker Change: One with Cunard and the other with Silversea cruises.

Leonard I. Fluxman: This follows the opening of our health and wellness centers on the Icon of the Seas and Sun Princess in the first quarter, bringing our year-to-date new builds to four. We continue to expect to end fiscal 2024 operating on board 198 vessels. As it relates to our higher-value services and products, as you recall, we introduced new cryotherapy body services and new cryotherapy and LED facial services to complement the new technology-driven Elemis Biotech 2.0 facial and light stem therapy, which augments our acupuncture revenue.

Speaker Change: This follows the opening of a health and wellness centers on the icon of the seas and Sun Princess in the first quarter, bringing our year to date, new Gold's two core.

Speaker Change: We continue to expect to end fiscal 2020 for operating on board 198 vessels.

Speaker Change: Second.

Leonard Fluxman: Second, as it relates to our higher value services and products, as you recall, we introduced new cryotherapy body services, new cryotherapy and LED facial services to complement the new technology driven elements by a tech 2.0 facial and light-stem therapy, which old men are acupuncture revenue. We will continue to ramp these new services to the entire fleet over the next few quarters. Third, we focused on enhancing health and wellness center productivity. We grew key maritime operating metrics with continued strong growth in revenue passenger per day, weekly revenue, and revenue to stop today. This is driven by growth in total cruise guests utilizing the SPAR and the number of treatments per guest, which benefits from the success of our technology enhancements, our expertise in stock training, and the simplification of our service menu options and treatment blends.

Speaker Change: As it relates to a higher value services and products as you recall, we introduced new cryotherapy body services via new Cryotherapy, and Leds facial services to complement the new technology, driven elements by a tier 2.0 facial and lifestyle therapy, which augments our acupuncture revenue.

Leonard I. Fluxman: We will continue to roll out these new services to the entire fleet over the next few quarters. Third, we focused on enhancing health and wellness center productivity. We grew key maritime operating metrics with continued strong growth in revenue per passenger per day, weekly revenue, and revenue per staff per day. This is driven by

Speaker Change: We will continue to ramp these new services to the entire fleet over the next few quarters.

Speaker Change: Third we focused on enhancing health and wellness center productivity.

Speaker Change: We grew key maritime operating metrics with continued strong growth in revenue passenger per day weakly revenue and revenue per stop today.

Speaker Change: This was driven by.

Speaker Change: Growth in total cruise guests utilizing the star and the number of treatments could guests, which benefits from the success of our technology enhancements.

Leonard I. Fluxman: Growth in total cruise guests utilizing the spa and the number of treatments per guest, which benefits from the success of our technology enhancements, our expertise in staff training, and the simplification of our service menu options and treatment blend. Additionally, we continue to attract and retain staff, which has led to an increasing percentage of experienced staff members working on board. We are pleased to see more of our staff members sign on for additional contracts, reflecting the compelling workplace environment we provide and their affinity to our company.

Speaker Change: Our expertise in staff training on the simplification of our service menu options and treatment blends.

Leonard Fluxman: Additionally, we continue to attract and retain staff, which has led to an increasing percentage of experienced staff members working on board. We are pleased to see more of our staff members sign on for additional contracts, reflecting the compelling workplace environment we provide and their affinity towards our company. These more experienced staff members are also skilled at recommending product and service options, which, combined with the simplification of our service menu and treatment blend, led to growth in higher price product and services. Pre-booking revenue as a percentage of services remains strong at 23%, even as we phase in new partners that are just beginning to scale.

Speaker Change: Additionally, we continue to attract and retain staff, which has led to an increasing percentage of experienced staff members working on board.

Speaker Change: We are pleased to see more of our staff members sign on for additional contracts, reflecting the compelling workplace environment, we provide and there are quality towards our company.

Leonard I. Fluxman: These more experienced staff members are also skilled at recommending product and service options, which, combined with the simplification of our service menu and treatment lens, led to growth in higher-priced products and services. Pre-booking revenue as a percentage of services remains strong at 23%, even as we phase in new partners that are just beginning to scale. We continue to see passengers that pre-book services spend 30% more than those that do not pre-book.

Speaker Change: These more experienced staff members all of us are still addressing lending product and service options, which combined with the simplification of our service menu and treatment plan led to growth in higher priced products and services.

Speaker Change: Pre booking revenue as a percentage of services remained strong at 23% even as we phase in new partners that are just beginning to scale. We continue to see passengers that pre book services spent 30% more than those that do not pre book.

Leonard Fluxman: We continue to see passengers that pre-book services spend 30% more than those that do not pre-book. And finally, we continue to expand productivity within our medisports. The quarter saw the same spot revenue overall up double digit year over year. We continue to increase the number of doctors and nurses we have on board and add to our service offering. At quarter end, medisports services were available on 144 ships, up from 142 ships in the first quarter this year and up from 129 ships at the end of the second quarter of 2023. We remain on track to expand medisports offering to 148 ships this year.

Speaker Change: And finally, we continued to expand productivity within our Medi spas.

Leonard I. Fluxman: And finally, we continue to expand productivity within our MediSpot. Quartus saw Sainsbury's revenue overall up double digits year over year. We continue to increase the number of doctors and nurses we have on board and add to our service offerings. At quarter end, ManySpa services were available on 144 ships, up from 142 shifts in the first quarter this year and up from 129 shifts at the end of the second quarter of 2023

Speaker Change: Cortisol same store revenue overall up double digit year over year.

Speaker Change: We continue to increase the number of doctors and nurses, we have onboard and add to our service offering.

Speaker Change: Quarter end Medi Spa services were available on 144 ships up from 142 ships in the first quarter. This year and up from 129 ships at the end of the second quarter of 2023.

Leonard I. Fluxman: We remain on track to expand ManySpa's offering to 148 ships this year. We have further enhanced our financial position and flexibility. Our balance sheet strength was bolstered by repayments of our first lean term loan this quarter. And first, as mentioned, our Board of Directors approved and reinstated an annual cash dividend program with the initial quarterly dividend payment of four pennies per common share payable to shareholders on September 4th, 2024, record under the close of business on August 21st, 2024, reflecting the strength of our asset-light business model and consistent record of growth.

Speaker Change: We remain on track to spend many spa offering to a 148 ships this year.

Speaker Change: Fourth we further enhanced our financial position and flexibility.

Leonard Fluxman: Both, we further enhanced our financial position and flexibility. Our balance sheet strength was bolstered by our repayments on our first lean term loan this quarter. And first, as mentioned, our board of directors approved and reinstated an annual cash dividend program with the initial quarterly dividend payment of four pennies for common share, payable to shareholders on September 4th, 2024, record as of the close of business on August 21st, 2024, reflecting the strength of our asset-like business model and consistent record of growth.

Speaker Change: Balance sheet strength was bolstered by our repayments of our first lien term loan this quarter.

Speaker Change: And fifth as mentioned our board of directors approved and reinstated an annual cash dividend program with the initial quarterly dividend payment of full pennies per common share payable to shareholders constant timber for 'twenty 'twenty pool of record as of the <unk>.

Speaker Change: Close of business on August 22024, reflecting the strength of our asset light business model and consistent record of growth.

Leonard Fluxman: In summary, we are pleased to report an excellent second quarter in the first half of the year and remain excited about our business outlook. Our third quarter is off to a strong start, and we remain confident in our ability to deliver robust operating and financial performance, both in the near and long term. Overall, we continue to expect fiscal 2024 to represent another year of record growth and increased value for our shareholders.

Leonard I. Fluxman: In summary, we are pleased to report an excellent second quarter and first half of the year and remain excited about our business outlook. Our third quarter is off to a strong start, and we remain confident in our ability to deliver robust operating and financial performance, both in the near and long term. Overall, we continue to expect fiscal 2024 to represent another year of record growth and increased value for our shareholders. With that, I'll turn the call over to Stephen, who will provide more details on our second quarter results and guidance. Thank you, Leonard. Good morning, everyone.

Speaker Change: In summary, we are pleased to report an excellent second quarter and first half of the year and remain excited about our business outlook.

Speaker Change: Our third quarter is off to a strong start and we remain confident in our ability to delivered robust operating and financial performance.

Speaker Change: In the near and long term.

Speaker Change: Overall, we continue to expect fiscal 'twenty 'twenty, Paul to represent another year of record growth and increased value for our shareholders.

Speaker Change: With that I'll turn the call over to Stephen who will provide more details on our second quarter results and guidance.

Stephen Lazarus: With that, I'll turn the call over to Stephen, who will provide more details on our second quarter results and guidance. Thank you, Leonard.

Speaker Change: Steven.

Stephen: Thank you Lynette good morning, everyone.

Stephen Lazarus: Good morning, everyone. We are pleased to report ongoing strength with the delivery of better-than-expected results across all key financial metrics in the second quarter. We continue to drive shareholder value with a quarter-generating record revenue, record net income, and record adjusted EBITDA. And we ended the period with a stronger balance sheet and delivered positive cash flow.

Stephen B. Lazarus: We are pleased to report ongoing strength with the delivery of better than expected results across all key financial metrics in the second quarter. We continued to drive shareholder value with a quarter generating record revenue, record net income, and record adjusted EBITDA. And we ended the period with a stronger balance sheet and delivered positive cash flow. I am also pleased that our board demonstrates its confidence in our business outlook and our ongoing ability to generate strong cash flow with the initiation of an annual cash dividend program, giving more detail on the second quarter we reported earlier this morning.

Steven: We are pleased to report ongoing spring with the delivery of better than expected results across all key financial metrics in the second quarter.

Steven: We continue to drive shareholder value with the quarter generating record revenue record net income and record adjusted EBITDA.

Steven: And we ended the period with a stronger balance sheet and delivered positive cash flow.

Stephen Lazarus: I am also pleased that our board demonstrated confidence in our business outlook and our ongoing ability to generate strong cash flow with the initiation of an annual cash dividend program. Very more detail on the second quarter we reported earlier this morning. Total revenues were 224.9 million dollars compared to $200.5 million in the second quarter of 2023. The increase primarily was attributable to our average ship count increasing to 188 health and wellness centres on board shifts operating during the quarter. Together with our continued productivity gains across our operations, positive services were $150.8 million compared to $137.2 million in the second quarter of 2023.

Stephen: And I'm also pleased that our board demonstrates our confidence in our business outlook and our ongoing ability to generate strong cash flow with the initiation of an annual cash dividend program.

Stephen: More detail on the second quarter, we reported earlier this morning.

Stephen B. Lazarus: Total revenues were $224.9 million, compared to $200.5 million in the second quarter of 2023. The increase primarily was attributable to our average ship count increasing to 188 health and wellness centers onboard ships operating during the quarter, compared with our average ship count of 177 health and wellness centers onboard ships operating during the prior quarter, together with our continued productivity gains across our operation. Cost of services was $150.8 million compared to $137.2 million in the second quarter of 2023, with the increase again being primarily attributable to costs associated with increased service revenues of $180.8 million in the quarter compared with service revenue of $163.2 million in the second quarter last year. Cluster products had $37.1 million compared to $32.2 million in the second quarter of 2023.

Speaker Change: Revenues were $224 $9 million compared to $225 million in the second quarter of 2023 the.

Speaker Change: The increase primarily was attributable to our average share count increasing to 188 to health and wellness centers onboard ships all trading during the quarter compared with our average ship count of 177 health and wellness centers onboard ships operating during the prior quarter.

Speaker Change: Together with our continued productivity gains across our operations.

Speaker Change: Cost of services were $158 million compared to $137 2 million in the second quarter of 2023.

Stephen Lazarus: With the increase again being primarily attributable to costs associated with increased service revenues of $180.8 million in the quarter compared with service revenue of $163.2 million in the second quarter last year. Positive products were $37.1 million compared to $32.2 million in the second quarter of 2023. The increase primarily attributable to costs associated with increased product revenue of $44 million in the quarter compared to product revenue of $37.3 million in the second quarter of 2023. Net income was $15.8 million or net income per day due to share of 15 pennies, as compared to a net loss of $3.2 million or net loss per day due to share of 3 pennies in the second quarter of 2023.

Speaker Change: With the increase again being primarily primarily attributable to costs associated with increased service revenues of $188 million in the quarter compared with service revenue of $163 $2 million in the second quarter of last year.

Speaker Change: Cost of products with $37 $1 million compared to $32 $2 million in the second quarter of 2023.

Stephen B. Lazarus: The increase was primarily attributable to costs associated with increased product revenue of $44 million in the quarter compared to product revenue of $37.3 million in the second quarter of 2020. Net income was $15.8 million, or net income per diluted share of 15 pennies, as compared to a net loss of $3.2 million or net loss per diluted share of three pennies in the second quarter of 2023. The improvement was primarily attributable to a $12.2 million decline in other expense due to the change in the fair value of the warrant liabilities, and more importantly, a $5.4 million increase in income from operations.

Speaker Change: The increase primarily attributable to costs associated with increased product revenue of $44 million in the quarter compared to product revenue of $37 $3 million in the second quarter of 2023.

Speaker Change: Net income was $15 $8 million or net income per diluted share or <unk> 15, pennies as compared to a net loss of $3 $2 million or net loss per diluted share of three pennies in the second quarter of 2023.

Stephen Lazarus: The improvement was primarily attributable to a $12.2 million decline in other expense from the change in the fair value of the warrant liabilities, and more importantly, a $5.4 million increase in income from operations. As you know, the change in fair value of warrant liabilities was the result of the remeasurement to fair value of the warrant's exercise during the second quarter of 2024, reflecting changes in the marketplace of our common stock and other observable observable inputs driving the value of these financial instruments. Importantly, though there are no outstanding warrants as of quarter end. The far-point $4 million positive change in income from operations primarily derived from the increase in the number of health and wellness centres on board vessels and our continued productivity gains.

Speaker Change: The improvement was primarily attributable to a $12 $2 million decline in other expense from the change in the fair value of the warrant liabilities.

Speaker Change: And more importantly about $44 million increase in income from operations.

Stephen B. Lazarus: As you know, the change in fair value of warrant liabilities was the result of the remeasurement to fair value of the warrants exercised during the second quarter of 2024, reflecting changes in the market price of our common stock and other observable inputs deriving the value of these financial instruments. Importantly, though, there are no outstanding warrants as of quarter end.

Speaker Change: As you know the change in fair value of warrant liabilities was the result of the re measurement to fair value of the warrants exercised street in the second quarter of 2024, reflecting changes in the market posture about common stock and other observers global observable inputs deriving the value of these financial instruments.

Speaker Change: Importantly, though there are no outstanding warrants as of quarter end.

Speaker Change: The $5 4 million positive change in income from operations, primarily derived from the increase in the number of health and wellness centers onboard vessels and continued productivity gains.

Stephen B. Lazarus: The $5.4 million positive change in income from operations primarily derives from the increase in the number of health and wellness centers onboard vessels and our continued productivity gains. Adjusted net income was $21.7 million, or adjusted net income per diluted share of 20 pennies, as compared to adjusted net income of $15 million or adjusted net income per diluted share of 15 pennies in the second quarter of last year. Adjusted EBITDA was $27.1 million compared to adjusted EBITDA of $21.6 million in the same period of 2020.

Stephen Lazarus: Adjusted net income was $21.7 million or adjusted net income per day due to share of 20 pennies, as compared to adjusted net income of $15 million or adjusted net income per day due to share of 15 pennies in the second quarter of last year. Justin Ebertter was 27.1 million compared to Justin Ebertter, 21.6 in the same period of 2023. Moving on to the value sheet, we ended the quarter with a stronger value sheet, including total cash of $63.7 million, off to repaying $15 million of our first lien term loan during the quarter. Since the second quarter of fiscal 2022, we have repaid over $109 million of indebtedness, and we have reduced our debt now to $123.8 million as of June 30, 2024.

Speaker Change: Adjusted net income was $21 $7 billion or adjusted net income per diluted share of 20 pennies.

Speaker Change: As compared to adjusted net income of $15 million or adjusted net income per diluted share or 15 pennies in the second quarter of last year.

Speaker Change: Adjusted EBITDA was $27 1 million compared to adjusted EBITDA of 41 six in the same period of 2023.

Speaker Change: Moving onto the balance sheet, we ended the quarter with a stronger balance sheet, including total cash of $63 $7 million.

Stephen B. Lazarus: Moving on to the balance sheet, we ended the quarter with a stronger balance sheet, including total cash of $63.7 million after repaying $15 million of our first lien term loan during the quarter. Since the second quarter of fiscal 2022, we have repaid over $109 million of indebtedness, and we have reduced our debt now to $123.8 million as of June 30, 2024. In the second quarter, unlevered after-tax free cash flow was $23.8 million, compared to $20.1 million in the second quarter of 2023. Moving on then to the guidance.

Stephen B. Lazarus: After repaying $15 million of our first lien term loan during the quarter.

Speaker Change: Since the second quarter of fiscal 2022, we have repaid over $109 billion of indebtedness and we have reduced our debt now $223 $8 million as of June 30 of 'twenty 'twenty four.

Stephen Lazarus: In the second quarter, delivered after-tax fee cash flow was $23.8 million compared to $20.1 million in the second quarter of 2023.

Speaker Change: In the second quarter Unlevered after tax free cash flow was $23 $8 million compared to $20 1 million in the second quarter of 2023.

Speaker Change: Moving then onto the guidance.

Stephen Lazarus: Moving then on to the guidance, with our strong second quarter performance and a positive outlook for the second time this year, we are going to be increased our fiscal 2024 guidance beyond the outperformance in the first half. We now expect revenues to increase 11% and adjusted EBTIDA to increase 18% to the midpoint of the guidance ranges from our fiscal 2023 actual results. For full year 2024, we now expect total revenue in the range of $870 to $890 million versus our previous guidance of $860 to $880 million. And adjusted Ebertter is now expected in the range of $102 million to $108 million, up from our previous guidance of $95 to $105 million.

Speaker Change: With our strong second quarter performance and our positive outlook for the second time. This year, we have increased our fiscal 2024 guidance beyond the outperformance in the first half.

Stephen B. Lazarus: With our strong second quarter performance and a positive outlook, for the second time this year, we have increased our fiscal 2024 guidance beyond the outperformance in the first half. We now expect revenues to increase 11% and adjusted EBITDA to increase 18% at the midpoint of the guidance ranges from our fiscal 2023 actual results. For full year 2024, we now expect total revenue in the range of $870 to $890 million versus our previous guidance of $860 to $880 million.

Stephen B. Lazarus: We now expect revenues to increase 11% and adjusted EBITDA.

Stephen B. Lazarus: Increased 18% at the midpoint of the guidance ranges from our fiscal 'twenty 'twenty actual results.

Speaker Change: For full year 'twenty 'twenty four we now expect total revenue in the range of 870 $819 million versus our previous guidance of 62, eight to 18 million and.

Stephen B. Lazarus: And adjusted EBITDA is now expected in the range of $102 million to $108 million, up from our previous guidance of $95 to $105 million. We expect to end fiscal 2024 on 198 cruise ships and at 52 resorts. For the third quarter, we expect total revenue in the range of $235,000. to $240 million and adjusted EBITDA in the range of $27 to $29 million. Our third quarter guidance assumes an ending ship count of 197 and a resort count of 52.

Stephen B. Lazarus: And adjusted EBITDA is now expected in the range of $102 million to $108 million up from our previous guidance of $95 million to $105 million. We expect to end fiscal 2024 to 198 cruise ships and at 52 resorts.

Stephen Lazarus: We expect to end fiscal 2024 on 198 cruise ships and at 52 results. For the third quarter, we expect total revenue in the range of $235 to $240 million and adjusted EBITDA in the range of $27 to $29 million. Our third quarter guidance assumes an ending shift count of 197 and a short count of 52.

Speaker Change: Well the third quarter, we expect total revenue in the range of $235 million to $240 million and adjusted EBITDA in the range of $27 million to $29 million.

Speaker Change: Our third quarter guidance assumes an ending ship count of 197 and was short count of 52.

Stephen Lazarus: In summary, we enter the third quarter strongly positioned; we are confident in our outlook and our ability to continue to deliver increased value for our shareholders as we execute our proven strategy supported by our advantages operating platform, robust growth initiatives, and asset-like business model.

Speaker Change: In summary.

Stephen B. Lazarus: In summary, we enter the third quarter strongly positioned. We are confident in our outlook and our ability to continue to deliver increased value for our shareholders as we execute our proven strategies supported by our advantageous operating platform, robust growth initiatives, and asset-light business models. And with that, we will open up the call for questions. Chuck, if you could please open the call, thank you.

Speaker Change: Got into the third quarter strongly positioned we are confident in our outlook and our ability to continue to deliver increased value for our shareholders as we execute our proven strategy supported by our advantageous operating platform robust growth initiatives and asset light business model.

Operator: And with that, we will open up the call for questions. Chuck, if you could please open the call. Thank you.

Speaker Change: With that we will open up the call for questions. Chuck If you could please open the call. Thank you.

Chuck: Thank you we will now begin the question and answer session.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your touch tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two.

Speaker Change: To ask a question you May press Star then one on your Touchtone phone, if you're using a speakerphone. Please pick up your handset before pressing the keys. If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

Operator: If at any time your question has been answered and you would like to withdraw your question, please press star then 2. We ask that you please limit yourself to one question and one follow-up. And if you have further questions, you may re-enter the question queue. And at this time, we'll pause momentarily to assemble our roster. And the first question will come from Gregory Miller with Truist Securities. Please go ahead. Thank you very much. Good morning. My first question relates to products.

Operator: We ask that you please let me yourself to one question and one follow up. And if you have further questions, you may read into the question queue.

Operator: We ask that you please limit yourself to one question and one follow up and if you have further questions. You may reenter. The question queue. At this time, we'll pause momentarily to assemble our roster.

Operator: And at this time, we'll pause momentarily to symbol our roster.

Gregory Miller: And the first question will come from Gregory Miller with the Truest Securities. Please go ahead. Thank you very much.

Operator: And the first question will come from Gregory Miller with the Truest Securities. Please go ahead.

Gregory Jay Miller: Thank you very much good morning.

Gregory Jay Miller: Thank you very much. Good morning, Leonard and Stephen.

Gregory Miller: Good morning, Leonard and Stephen.

Gregory Jay Miller: Steven.

Gregory Miller: My first question relates to product spend. I'm curious how product spend is trending post-treatment today. The second quarter revenues looked quite strong.

Gregory Jay Miller: My first question relates to product spend. I'm curious how product spend is trending post-treatment today. The second quarter revenues looked quite strong. Are you seeing any changing trends in the types of products or price points?

Gregory Jay Miller: My first question relates to product spend.

Gregory Jay Miller: Curious how product spend is trending.

Speaker Change: Trending post treatment today.

Speaker Change: Second quarter revenues looked quite strong are you seeing any changing trends and what types of products price points are resonating.

Gregory Miller: Are you seeing any changing trends in what types of products or price points are resonating more with your guests today?

Gregory Jay Miller: Yesterday.

Leonard Fluxman: Are there, can you hear me? We can, Greg. I thought Leonard would take the question; maybe he just dropped off momentarily. Sorry, Greg, I was in need. Yeah, thanks. Product demand and service demand continues to be very strong. We see many benefits associated with some of the new services we've rolled out, the many simplifications, and so we see retail attachments being just where we need it. I think there's room to improve it as we continue to simplify many choices, which actually promotes good retail attachment. So demand is there, and we're very happy with the progress on retail attachment.

Speaker Change: Can you hear me.

Speaker Change: We can't really go smoothly and it could take the question Mike maybe he just dropped like momentarily so.

Unnamed Speaker: We can, Greg. I thought Leonard would take the question. Maybe he just dropped off momentarily.

Greg: Sorry, Yeah, sorry, Greg.

Mike: I was I was on mute.

Gregory Jay Miller:

Unnamed Speaker: Thanks. Product demand and service demand continues to be very strong. We see many benefits associated with some of the new services we've rolled out, such as menu simplification. And so we see retail attachment being just where we need it. I think there's room to improve it as we continue to simplify menu choices, which actually promotes good retail attachment. Demand is there, and we're very happy with the progress on retail attachment.

Greg: Yeah, Thanks products product demand and service demand.

Dania: Dania has to be very strong we see many.

Unnamed Speaker: Many benefits associated with some of the new services, we rolled out the menu simplification.

Unnamed Speaker: And so we see retail attachment being just where we need it I think there is.

Gregory Jay Miller: Room to improve it as we continue to simplify menu choices, which actually promotes.

Unnamed Speaker: Good retail attachment so demand is there and we're very happy with the progress on retail attachment.

Speaker Change: Thanks, and then my follow up.

Gregory Miller: Thanks.

Gregory Jay Miller: And in terms of my follow-up question, this relates to spa menu pricing, and it's maybe a little bit more of a hypothetical question, but I'm going to try to ask anyways. To my understanding, you look at United States high-end resorts for benchmarking in terms of spa menu pricing. I'm curious how much it is... U.S. Resort Spa Menu Pricing, a potential ceiling for you in terms of your own spa menu, for example, if you're in the position where your demand is stronger than a U.S. resort today, which is quite possible given many affluent Americans are traveling abroad this summer, including, of course, going on cruises. Do you expect to get much pushback if you raise the pricing above an equivalent stateside alternative?

Gregory Miller: And in terms of my follow-up, this relates to spa menu pricing, and it's maybe a little bit more of a hypothetical question, but I'm going to try to ask anyways. To my understanding, you look at United States high-end resorts for benchmarking in terms of spa menu pricing.

Speaker Change: This relates to spot menu pricing and it's maybe a little bit more of a hypothetical question, but I'm going to try to ask anyways.

Speaker Change: To my understanding you look at.

Gregory Jay Miller: States high end resorts for benchmarking in terms of spot menu pricing.

Leonard Fluxman: I'm curious how much is the US resort spa menu pricing potential ceiling for you in terms of your own spa menus. For example, if you're in the position where your demand is stronger than a US resort today, which is quite possible given many affluent Americans are traveling abroad this summer, including, of course, going on cruises, do you expect to get much pushback if you raised pricing above an equivalent stateside alternative? Yeah, so look, we always look at land-based high-end resorts. I mean, listen, not every single banner you would say is in that particular category. So we, I mean, remember, we go across many, many different categories of demographic and consumer.

Gregory Jay Miller: I'm curious how much is.

Speaker Change: Our U S resorts spot menu pricing potential ceiling for you in terms of.

Speaker Change: Spot menus.

Gregory Jay Miller: For example, if you're in a position where your demand stronger than our U S. Resorts today, which is quite possible given many affluent Americans are traveling abroad. This summer including of course going on cruises.

Gregory Jay Miller: Do you expect to get much pushback, if you raised pricing above an equivalent stateside alternative.

Speaker Change: Yeah. So look we always look at land based high end resorts and listen not every single banner.

Unnamed Speaker: Yeah, so look, we always look at land-based high-end resorts. I mean, listen, not every single banner you would say is in that particular category. So we, I mean, remember Greg, we go across many, many different categories of demographic and, you know, consumer. So we look at a lot of different land-based data as we determine where pricing should be, and if you compare us, [inaudible]

Greg: You would say yes.

Unnamed Speaker: In that particular category. So we I mean remember Greg we go across many many different categories our demographic and.

Greg: Consumer so we look at a lot of different land based data as we determined where pricing should be and if you compare us.

Leonard Fluxman: So we look at a lot of different land-based data as we determine where pricing should be, and if you compare us to luxury or high end, as you say, we're definitely still quite value oriented.

Greg: Two luxury or high end as you say, we're definitely still quite value oriented. We think there may still be an opportunity down the road not right now.

Gregory Miller: We think there may still be an opportunity down the road, not right now, but certainly for 2025. We will, as part in possible budgeting process, look at the opportunity where we can take further pricing. Okay, understood. Thank you very much.

Unnamed Speaker: But certainly for 2025, we will as part and parcel of our budgeting process look at the opportunity where we can take the pricing.

Greg: Okay understood. Thank you very much.

Operator: Okay, I understand. Thank you very much.

Leonard Fluxman: Yep, you're welcome.

Speaker Change: Yep you're welcome.

Max Ray Glamau: The next question will come from Max Ray Glamau with Cowan and Company. Please go ahead.

Operator: The next question will come from Maks Reklamal with Cowen and Company. Please go ahead.

Speaker Change: The next question will come from Max <unk> with Cowen with Cowen <unk> Company. Please go ahead.

Max Ray Glamau: Hey, thanks a lot, guys, and congrats on a really strong quarter. So first, curious, if you can provide some additional color on the implied fourth quarter revenue and margin guidance, seems like it could be pretty conservative on both top and bottom line, just given the odds run rates. You're seeing as well as the implied third quarter.

Maksim Rakhlenko: Hey, Thanks, a lot guys and congrats on a really strong quarter.

Maksim Rakhlenko: Hey, thanks a lot, guys. And congrats on a really strong quarter. So first, curious, if you can provide some additional color on the implied fourth quarter revenue and margin guidance. Seems like it could be pretty conservative on both top and bottom line, just given the run rates you're seeing, as well as the implied third quarter. So just how are you framing it and sort of what's the thinking that's going into the fourth quarter?

Maksim Rakhlenko: So first curious if you can provide some additional color on the implied fourth quarter revenue and margin guidance.

Maksim Rakhlenko: Like a it could be pretty conservative on both top and bottom line just given the odd run rates you have seen as well as the implied third quarter. So just how are you framing and sort of what's what's the thinking that's going into the fourth quarter.

Stephen Lazarus: So just how are you framing and sort of what's the thinking that's going into the fourth quarter?

Stephen Lazarus: Yeah, nice.

Speaker Change: Yeah. Thanks, good morning.

Stephen B. Lazarus: Yeah, thanks. Good morning.

Stephen Lazarus: Good morning. As you know, the fourth quarter seasonally is a softer quarter for us, and historically that has been the case for three position, and obviously we come out of the much more productive summer vacation period for North Americans through holidays. So it's not typical to see a softer fourth quarter than the third quarter. And I implied margin for the fourth quarter at the midpoint is 11.9 percent on an EBITDA basis. So it's not far shorter where we've delivered in the first and second quarter, and just gives us the opportunity to the extent that we would need to do any proper promotion activity because of those repositioning exception to do so.

Stephen B. Lazarus: As you know, the fourth quarter seasonally is a softer quarter for us, and historically, that has been the case. We get free position, and obviously, we come out of the much more productive summer vacation period for North Americans through the holidays. So it's not atypical to see a softer fourth quarter than the third quarter. And I implied margin for the fourth quarter at the midpoint is 11.9% on an EBITDA basis. So it's not far short of where we've delivered in the first and second quarter and just gives us the opportunity, to the extent that we would need to do any type of promotional activity because of those repositionings, etc., to do so.

Speaker Change: As you know the fourth quarter seasonally is a softer quarter for us and historically that has been the case.

Stephen B. Lazarus: Sure reposition and obviously would come out at a much more productive summer vacation periods for North American school holidays. So it's.

Stephen B. Lazarus: Not atypical to see a softer fourth quarter than in the third quarter.

Greg: <unk> margin for the fourth quarter at the midpoint and TC 11, 9% on an EBIT basis. So.

Stephen B. Lazarus: It's not.

Stephen B. Lazarus: Our short to where we've delivered in the first and second quarter and just gives us the opportunity to the extent that we.

Stephen B. Lazarus: We need to do any pockets or promotional activity because of those repositioning expenditure to do so so I think the short of it is.

Stephen B. Lazarus: So I think the short of it is what we would expect seasonally and also from a demand perspective based upon where the ships begin to sail during the first half of that quarter as they reposition.

Stephen Lazarus: So I think the short of it is it's what we would expect seasonally and also from a demand perspective based upon where the ships begin to sail during the first half of that quarter as they reposition. Got it. Okay, that's helpful.

Stephen B. Lazarus: That's what you would expect seasonally and also from a demand perspective based upon where the ships begin to sale during the first half of the quarter as they reposition.

Speaker Change: Got it Okay. That's helpful and then congratulations on announcing the dividend. So curious what's the strategy around the growth profile of the dividend. How are you thinking about that and then balancing it with continuing to pay down debt.

Maksim Rakhlenko: Got it. Okay, that's helpful.

Stephen Lazarus: And then congratulations on announcing the dividend. So curious, what's the strategy around the growth profile of the dividend? How are you thinking about that? And then balancing it with continuing to pay down debt is a strategy to pay down debt completely over the medium term. Or would you be okay continuing to carry some level even longer. So just curious about the balance of dividend versus the debt paid out.

Maksim Rakhlenko: And then congratulations on announcing the dividend. So, curious, what's the strategy around the growth profile of the dividend? How are you thinking about that? And then balancing it with continuing to pay down debt. Is the strategy to pay down debt completely over the medium term, or would you be okay continuing to carry some level even longer? So just curious about the balance of the dividend versus the debt.

Maksim Rakhlenko: Is the strategy to pay down debt completely over the medium term or would you be okay continuing to carry some bubble.

Maksim Rakhlenko: Even longer so just curious about the balance of our dividend versus the debt paydown.

Speaker Change: Yeah, I think the word that you use is most appropriate to balance them.

Stephen Lazarus: Yeah, I think the word that you use is most appropriate: the balance. You know, as you obviously know, everybody knows you do continue to have debt. We also do have a Sherry purchase program that is in place. And so we like the flexibility to be able to allocate between the Sherry purchases that they pay down. And, of course, now there's also the dividend. Yes, we would be comfortable carrying some debt. I think we already previously mentioned that the debt is at a very manageable level; net debt well below 1%. In terms of where we would want it to be.

Stephen B. Lazarus: Yeah, I think the word that you use is most appropriate, the balance. You know, as you obviously know, everybody knows, we do continue to have debt. We also do have a share repurchase program that is in place. And so we like the flexibility to be able to allocate between the share repurchases, the debt paydown, and, of course, now there's also dividends. Yes, we would be comfortable carrying some debt. I think we've already previously mentioned that the debt is at a very manageable level, net debt well below 1%, in terms of where we would want it to be. So I mean, one turn rather than. So yeah, we're absolutely comfortable.

Stephen B. Lazarus: As you as you obviously know everybody knows we do continue to have that we also do you have a share repurchase program that is in place and so we like the flexibility to be to be able to allocate between the share repurchases the debt pay down and of course nowadays also the dividends.

Stephen B. Lazarus: Yes, we would be comfortable carrying some days I think we've already previously mentioned that the debt is at a very manageable level net debt well below 1%.

Stephen B. Lazarus: In terms of where we would want it to be so I mean, one turn rather so yeah, we were actually pretty comfortable and I think that it will just come down to what makes the most central it opportunistically stock repurchases may come into play over time. They showed me the opportunity to grow the dividend and.

Stephen Lazarus: So I mean, one turn rather. So yeah, we're absolutely comfortable. And I think it will just come down to what makes the most sense right opportunistically. The stock we purchases may come into play over time. There's certainly the opportunity to grow the dividend. And then, depending on what happens with interest rates, will drive how aggressive we are in paying down the debt. Got it.

Maksim Rakhlenko: And I think that it'll just come down to what makes the most sense, right? Opportunistically, the stock repurchases may come into play. Over time, there's certainly the opportunity to grow the dividend. And, you know, depending on what happens with interest rates, will drive how aggressive we are in paying down the debt.

Maksim Rakhlenko: Depending on what happens with interest rates, which will drive how aggressive we are paying down the debt.

Speaker Change: Got it and just a quick follow up on that point are your your cash on the balance sheet continues to grow so is that related to potentially just having some dry powder. If you watch buy back stock or what's the rationale for that.

Stephen B. Lazarus: Got it. And just a quick follow-up on that point. Your cash on the balance sheet continues to grow. So is that related to potentially just having some dry powder to buy back stock, or what's the rationale?

Stephen Lazarus: And just quick follow-up on that point. Your cash on the balance sheet continues to grow. So is that related to potentially just having us and drive powder to buy back stock, or what's the rationale? for that.

Speaker Change: So it is at a higher point than it traditionally has been a driver of that is as you know our line of credit expired in March and we did not renew it. So it really is just to have some additional liquidity on the one hand, and yeah look to the extent that there's an opportunity.

Stephen Lazarus: So it isn't a higher point than it traditionally has been. A driver of that is, as you know, our line of credit expired in March and we did not renew it. So it really is just to have some additional liquidity on the one hand and look to the extent that there's an opportunity on the stock we've put aside. It's always nice to have some cash to be able to pull the trigger on that. Got it. Thanks a lot.

Stephen B. Lazarus: So it is at a higher point than it traditionally has been. A driver of that is, as you know, our line of credit expired in March, and we did not renew it. So it really is just to have some additional liquidity on the one hand, and yeah, look, to the extent that there's an opportunity on the stock repurchase side, it's always nice to have some cash to be able to pull the trigger on.

Stephen B. Lazarus: On the stock repurchase side.

Stephen B. Lazarus: It's nice to have some cash to be able to pull the trigger on that.

Speaker Change: Got it thanks, a lot and best regards.

Maksim Rakhlenko: Got it. Thanks a lot. Best regards

Operator: Best regards. Okay.

Maksim Rakhlenko: Okay.

Sharon Zackfia: The next question will come from Sharon Zackfia with William Blair. Please go ahead. Hi, good morning. It was really impressive to see what it looks like spot productivity actually accelerate from where you had been, which is already at really good levels. And I know Leonard, in your comments, you talked about treatments per gas and proven and some tech enhancements that were helping drive that, among other factors.

Maksim Rakhlenko: The next question will come from Sharon Zackfia with William Blair. Please go ahead.

Operator: The next question will come from Sharon Zackfia with William Blair. Please go ahead.

Sharon Zackfia: Hi, good morning. It was really impressive to see what spot productivity actually accelerates from where you had been, which is already at really good levels. And I know, Leonard, in your comments, you talked about treatments per guest improving and some tech enhancements that were helping drive that, among other factors. Can you talk about what those tech enhancements are and kind of what you have coming down the pike? I think you have some investments in AI going on right now, but I'm not sure if they've manifested yet in any way in the back of house or front of house at the site.

Sharon Zackfia: Hi, Good morning, it was really impressive to see what it looks like spot productivity actually accelerate.

Sharon Zackfia: From where you had been which is already at really good levels and I know Leonard in your comments, you talked about treatments per gas and Caribbean and some tech enhancements that were helping drive that among other factors can you talk about what those tech enhancements are and kind of what you have coming down the Pike I think you have some investments in AI is going on right.

Leonard Fluxman: Can you talk about what those tech enhancements are and kind of what you have going down the pike. I think you have some investments in AI going on right now, but I'm not sure if they've manifested yet, and anyway in the back of house or front of house with the stock. Yeah, thanks, Sharon. These are good questions. We, so let me let me just on to the simple one first. We have not rolled out any AI enhancements yet; there's still in development phase. I would say sort of first inings we're going through identification of opportunities, particularly on board and then certainly in supply chain now the areas in the back office of one small world.

Speaker Change: But I'm not sure if they've manifestly yet in any way in the backup house or front of house staff.

Leonard: Yeah. Thanks Sharon.

Leonard: These are good questions. We so let me let me just answer the simple one first we have not rolled out any AI enhancements yet they are still in development phase I would say sort of savings.

Leonard I. Fluxman: We're going through the identification of opportunities, particularly on board and then certainly in supply chain and other areas in the back office of OneSpaWorld. But there's nothing in place right now nor anything that will impact the ability to use AI to drive better productivity in 2024. So we're working on it. It's in its early stages of development, and we certainly are very, very excited about it.

Speaker Change: Going through identification of.

Leonard I. Fluxman: Opportunities, particularly onboard and then suddenly in supply chain and other areas in the back office of one small world, but there's nothing in place right now nor anything that will in 2020 for impact.

Leonard Fluxman: But there's nothing in place right now, nor anything that will in 2024 impact the ability to use AI to drive better productivity. So we're working on it. It's in its early stages of development, and we certainly are very, very excited about some of the areas that we are going to tackle with respect to enhancing further productivity enhancements from state. We're going to start off with the use of some of the AI technology.

Leonard I. Fluxman:

Leonard I. Fluxman: The ability to use AI to drive better productivity. So we're working on it it should see necessarily stages of development and we certainly are very very excited about some of the areas that we are going to tackle with respect to enhancing.

Leonard I. Fluxman: Further productivity enhancements from stopped with the use of some of the AI technology, but once we have it fully developed once we have it ready to roll off we will certainly be happy to talk to everybody in the community shareholders et cetera about what this AI will do part of the operations that obviously, it's going to take some testing.

Leonard Fluxman: But once we have it fully developed, once we have it ready to roll out, we will certainly be happy to talk to everybody in the community, shareholders, et cetera, about what this AI will do for the operations. Obviously, it's going to take some testing, et cetera. So too early to comment, but certainly exciting to see what it may do for us once we want to roll it out with respect to productivity gains. Definitely a pick up in the number of guests coming through us bars. I mean, it was close to about 500,000 more. But then the denominator of the new ships went up a lot more.

Leonard I. Fluxman: Cetera, So too early to comment, but certainly exciting to see what it may do.

Speaker Change: For us once it once you roll it out with respect to productivity gains we saw definitely a pickup in the number of guests coming through our spas I mean, it was close to about 500000 more but then the denominator.

Speaker Change: Of the new ships went up a lot more so effectively you know where we're treating more people the simplification of our menu, which is helping promote but service demand and retail attachment Oh.

Leonard Fluxman: So effectively, you know, we're treating more people. The simplification of our menus, which is helping promote both service demand and retail attachment, all led to better productivity during the quarter. And certainly that productivity continues as we started the third quarter.

Leonard I. Fluxman: All led to better productivity during the quarter and suddenly that productivity continues as we started the third quarter.

Leonard Fluxman: And thanks for that. And then on product margin, it's kind of beating my model every quarter. And so, can you talk about what the drivers are of product margin? And I know you don't own elements anymore, but, you know, where can product margin go? And are we seeing Metaspa kind of help elevate this? I'm trying to figure out, you know, we're in the mid-teens now well above 2019.

Speaker Change: Thanks for that and then on product margin, it's kind of a BD in my model every quarter and so.

Speaker Change: Can you talk about what the drivers are of product margin and I know you don't own LMS anymore, but where can product margin go and how are we seeing Matt as Bob kind of help elevate us I'm trying to figure out you know we're in the mid teens now well above 2019, meaning what what's the line of sight.

Leonard Fluxman: I mean, what's the line of sight on how high we could see a product margin ultimately go? Sure.

Leonard I. Fluxman: And how high we can see a product margin ultimately go.

Speaker Change: Sure so.

Leonard Fluxman: So, many spot note that there's no real product attachment of note as it relates to many spot services at this point in time, so that is not helping. As it relates to the cost of the product and yes, we no longer own LMS, but as you know, we did enter into free companies desegregating a long-term supply agreement. So, the cost side of that is fixed in terms of go forward, and so where you see improvements there, it's around things that we're doing on board, and the biggest rubber off, frankly, is just the continued productivity improvements and the lack of discounting being required in order to promote those sales.

Leonard I. Fluxman: So no there's no real.

Leonard I. Fluxman: Detachment of note as it relates to many sports services at this point in time, so that is not helping.

Speaker Change: As it relates to the cost of the product and yes, we no longer own elemis, but as you know we did enter into.

Speaker Change: The company's segregating, our long term supply agreement. So the cost side of that is fixed in terms of go forward and so where you see improvements there it's around things that we're doing on board and the biggest driver Rockwell frankly is just the continued productivity improvements and the.

Leonard I. Fluxman: <unk>.

Leonard I. Fluxman: Lack of discounting being required in order to promote those sales.

Leonard Fluxman: Okay, thank you.

Speaker Change: Okay. Thank you.

Laura Champine: The next question will come from Laura Champine with Loop Capital.

Speaker Change: The next question will come from Laura Champine with loop capital. Please go ahead.

Laura Champine: Please go ahead. Hi, my question is also on that product side, which is beating our estimates. I'm wondering if you have looked at additional product lines you could add there.

Speaker Change: Hi, My question is also on that product side, which which is beating our estimates and I'm wondering if you have looked at them additional.

Leonard I. Fluxman: Product lines, you could add there I know, we've talked about ways to build an ecommerce business. So that your customers keep paying them even after they're they've left the ship.

Leonard Fluxman: I know we've talked about ways to build an e-commerce business so that your customers keep paying you even after they've left the ship. Is there M&A that could be done there that we would need to do to have sort of an e-commerce side of the business, or just share kind of your growth thoughts on products? Yeah, thanks for it. No, we don't have a need. I mean, LMS really, we're involved in the R&D side. We certainly sit on the calls; we give them a lot of ideas about what's working in our particular world versus their land-based and retail outlets.

Speaker Change: They use their M&A that could be done there that we would need to do they have sort of an e-commerce.

Speaker Change: Side of the business or just share kind of your growth thoughts on products.

Leonard I. Fluxman: Yeah. Thanks, Lauren no. We don't have a need I mean elements really we were involved in the R&D side, we certainly sits on the.

Speaker Change: On the Kohl's, we give them a lot of ideas about what's working in our particular well this is their land based and retail outlets.

Leonard I. Fluxman: So whatever we think may be needed, I mean, we're still a pretty large customer of theirs, they listen, and they provide us with the necessary development of products. You know, in some cases, certainly in the luxury area, we do offer a smaller complementary range.

Leonard Fluxman: So whatever we think may be needed, I mean, we're still a pretty large customer of theirs. They listen, and they provide us with the necessary development of products. You know, in some cases, certainly in the luxury area, we do offer a smaller complementary range. I mean, we have some product on there. We've even added product that we don't own into those line-ups we're needed, but I have to tell you, LMS is line-up across station body is more than enough for us to continue to grow. And all of our services and protocols that we use, all are, you know, the architecture around those services are supported on the back bar and the retail side by the development of the LMS product range.

Speaker Change: So whatever we think maybe needed I mean, we're still a pretty large customer of us they listen and they provide.

Leonard I. Fluxman: US with the necessary development of product.

Leonard I. Fluxman: I mean, we have some product on there. We've even added product that we don't own to those lineups when needed. But, I have to tell you, Elemis's lineup across Station Body is more than enough for us to continue to grow. And all of our services and protocols that we use... for our guests and consumers, but at the same time, we have a very good deal, a long-term deal, as Stephen mentioned with Elemis, and we'll continue to keep that as our dominant branch. With respect to the e-commerce side, we do sell Elemis on e-commerce. Something looks like it might be worth it.

Leonard I. Fluxman: You know in some cases suddenly in the luxury area. We do offer a smaller complementary range. I mean, we have we have some product on them. We've even added product that we've done on <unk>.

Leonard I. Fluxman: Into those lineups, where needed but I have to tell you the elements as lineup across say somebody is more than enough for us to continue to grow and all of our services.

Leonard I. Fluxman: Protocols that we use.

Speaker Change: All are.

Speaker Change: The architecture around those services are supported on the back bar and the retail side by the development of the elements product range and so we are very excited about.

Leonard Fluxman: And so we are very excited about new things coming from LMS next year. So there is really no need to look at this. And you know, we get approached all the time to put products on board because we have such an incredible showcase and showroom and trial and test for our guests and consumer. But at the same time, you know, we have a very good deal, long-term deal. Let's even mention with LMS, and we'll continue to keep that as a dominant range. With respect to the e-commerce side, we do sell LMS on e-commerce. But then, you know, LMS sells a lot of e-commerce on a website.

Speaker Change: These things coming from Elemis next year. So there is really no need to look at this.

Speaker Change: And you know we get approached all the time to put products on board because we have such an incredible showcase and showroom.

Speaker Change: And trial and test.

Leonard I. Fluxman: For our guest and consumer.

Speaker Change: But at the same time you know we have we have a very.

Leonard I. Fluxman: Good deal long term deal as Stephen mentioned with elements and we'll continue to keep that as a dominant crash with respect to the E. Commerce side, we do sell elements on E Commerce.

Speaker Change: But then you know element sells a lot of e-commerce on its own website. So we're done.

Leonard Fluxman: So we don't we compete against them, but not in the same way because it's mostly our guests that are buying products of the bottom board. We continue to look at what we can do to expand the e-commerce side. It's certainly doing better than it did in 2019, and to the extent that something looks like it might be worth adding to e-commerce and the post-guest experience and sale, we'll do that, but there's nothing right now.

Speaker Change: We compete against them, but not in the same way because it's mostly I guess that are buying product that they're brought on board.

Leonard I. Fluxman: We continue to look at what we can do to expand the e-commerce side.

Speaker Change: It's certainly doing better than it did in 2019 and to the extent that.

Leonard I. Fluxman: Something looks like it might be worth.

Speaker Change: Adding to e-commerce, and the post guest experience and sale they'll do that but there's nothing right now.

Leonard Fluxman: I'm interested.

Speaker Change: Understood. Thank you.

Operator: Thank you. Okay.

Leonard I. Fluxman: Okay.

Assia Georgieva: The next question will come from Assia Georgieva with Infinity Research. Please go ahead. Good morning, guys.

Speaker Change: The next question will come from ICR, Georgia, Eva with Infiniti Research. Please go ahead.

Speaker Change: Good morning, guys.

Sharon Zackfia: understood. Thank you.

Assia Georgieva: I didn't know where at the start with my questions or the remarks. Great Q2, great increase to the outlook, and the fact that you're raised in the dividend is fantastic. And then Stephen said that we don't have to deal with awards in March 19th is the data that I remember quite clearly. The idea of question occupancy, because I think it's an opportunity in both ways. One of the major brands that you serve on is pretty much nothing to the fiscal levels of occupancy, but the one who may have recorded earlier today is still lagging behind the fiscal levels.

Mike: With Mike.

Speaker Change: Great Q2.

Sharon Zackfia: Great.

Speaker Change: The outlook.

Sharon Zackfia: Yeah.

Sharon Zackfia: Fantastic.

Sharon Zackfia: Yes.

Sharon Zackfia: Absolutely.

Sharon Zackfia: March.

Speaker Change: Is the data that I remember.

Speaker Change: Quite frequently.

Speaker Change: I have a question occupancy because I think it's an opportunity.

Speaker Change: Both ways.

Speaker Change: One of the major brands such as <unk>.

Sharon Zackfia: Got it.

Speaker Change: This historical level of occupancy.

Sharon Zackfia: Okay.

Speaker Change: How are you today.

Sharon Zackfia: It's still lagging behind historical levels.

Stephen Lazarus: So it seems that with greater occupancy opportunity, you might be able to give to growth beyond what the should count as, is that a fair assessment? So Assia, I would point out that, as you know, we only serve as a small proportion of guests on board anyway, and generally speaking, occupancy's pretty much gotten back to historical levels, some of them maybe even are supposing that. But when that happens, as you know, when they're getting about 100%, it's typically because they're filling those caverns with kids, and so that's really not our target audience per se, so I don't really think from a crucial on occupancy perspective, there's still lots of opportunity for us. Obviously, there's not the fact that they always fall their ships and they historic have done that, and they're now continuing to do that again. But when you start getting to, you know, 113 plus 100 plus the same occupancy, the marginal increment for us is not that significant.

Speaker Change: It seems that with greater occupancy.

Sharon Zackfia: Opportunity.

Speaker Change: You might be able to continue to grow.

Sharon Zackfia: Yeah.

Speaker Change: I can say is that a fair assessment.

Sharon Zackfia: So that's how I would point out that.

Speaker Change: As you know, we only services small proportional kish onboard anyway.

Speaker Change: And generally speaking you know occupancies are pretty much gone back to historical levels. Some of it maybe even though supporting that but when that happens as you know when they're getting above the 100% that's typically because this.

Speaker Change: They're filling those kevin's with kids and so that's really not our target audience per se.

Speaker Change: So I look I I don't really think from a cruise line occupancy perspective, there's still lots of opportunity for US obviously, we love. The fact that they always fill the ships and they historically have done that and are now continuing to do that again, but when you start getting to you know 100, and so T plus 100 plus percent occupancy.

Sharon Zackfia: The marginal increment for us is not that significant.

Operator: Good morning, guys.

Speaker Change: Fair enough. Thank you Kim.

Leonard Fluxman: Fair enough, Steven. Thank you. Because you guys mentioned Silver Sea, and if I can add Utopia, three different types of demographics that would go on those ships, even between Icon and Utopia. How do you view the product that well is presenting basically a shorter party type voyage on Utopia versus Icon of the Sea, the family type voyage versus Silver Sea, whether it's Ray or Nova, a much higher end customer without any family, without any kids, I mean, longer voyages. How do you view these three different types of demographic target markets? Utopia, thanks. I think it's a very smart way.

Operator: As you know, we only service a small proportion of guests on board anyway. And, generally speaking, you know, occupancy rates have pretty much gotten back to historical levels. Some of them, maybe even are surpassing that. But when that happens, as you know, when they're getting above 100%, it's typically because

Speaker Change: Because you guys mentioned, the Silversea and I can and if I can add that utopia.

Operator: Fair enough, Stephen, thank you. Because you guys mentioned Silver Sea and Icahn and, if I can add, Utopia, three different types of demographics that would go on those ships, even between Icahn and Utopia. How do you view the product that Royal is presenting, basically a shorter party-type voyage on Utopia versus I Can Oversee as a family-type voyage versus Silver Sea, whether it's Ray or Nova, a much higher-end customer without any family, without any kids, I mean, longer voyages? How do you view these three different types of demographic target markets?

Operator:

Operator: Different.

Speaker Change: Types of demographics that would go on those ships even between I couldn't utopia.

Operator: How do you view the product.

Speaker Change: That's what I was presenting basically a shorter voyage on Utopia voices I can have the sleeves of family type devices, silversea, whether its lean or Nova Hum are.

Operator: A much higher end customer without any family without any kids I mean longer voyages.

Speaker Change: How does it.

Speaker Change: How do you view do you see different types of demographics target market.

Operator: Hum.

Speaker Change: I think it's a very smart way.

Leonard Fluxman: that Royal Caribbean has approached the market. They're offering a family choice, and the icon is an incredible layout for families and kids. And then I think by introducing Utopia, shorter cruisers, a more younger demographic, maybe a little bit more potting going on, I think it's also quite smart as well. And I think we've seen this kind of demographic across different banners. And it's never been an issue for us. And look at training and the way that we go to work on different types of length of itineraries, different types of demographics. Kate is to this. So I think it's very exciting that they're offering two identical ships catering to two different demographics.

Speaker Change: That Royal Caribbean has approached the market they offering a family choice.

Leonard I. Fluxman: and the icon is an incredible layout for families and kids, um, caters to this, so I think it's very exciting that they're offering two identical ships catering to two different demographics, and I think they'll do equally as well. Still, the seas in the luxury markets, beautiful ships, longer itineraries, no kids, as you say. We continue to excel on there as well, and recent results on there have been outstanding.

Speaker Change: And the icon is an incredible layout for families and kids.

Leonard I. Fluxman: And then I think by introducing your Tokyo shorter cruises more younger demographic, maybe a little bit more partying.

Leonard I. Fluxman: Going on.

Leonard I. Fluxman: So, it's a quite smart as well and I think we've seen.

Speaker Change: This kind of demographic across different banners and it's never been an issue for us and look at training and the way that we go to work on different types of length of artillery use different types of demographics.

Leonard I. Fluxman: Caters to this so I <unk>.

Leonard I. Fluxman: It's very exciting that they're offering two identical shirts catering to two different demographics and I think they will do equally as well.

Leonard Fluxman: And I think they'll do equally as well. Still the seas in the luxury markets, beautiful ships, longer itineraries, no kids, as you say, we continue to excel on there as well.

Leonard I. Fluxman: Fees in the luxury market beautiful ships longer itineraries and our kids are who say we continue to excel on there as well and our recent results on there have been outstanding.

Leonard Fluxman: And recent results on there have been outstanding. And so between Utopia, the party market, younger demographic and icon, the more family oriented, do you think that you may have a greater penetration rate at Utopia? It's too early to tell. I think a three, four day mix, mix people make, you know, quicker choices, because they've got a shorter period of time on the three day. The whole day they've got one extra day for deciding when they're going to participate in some of the amenities, including spa. But listen, I think the ship is outstanding. I think the itinerary that it's chosen from three, four day.

Speaker Change: And so between Utopia, the party might get younger demographic and I can the more family oriented do you think that you may have a greater penetration rate at Utopia.

Operator: And so between Utopia, the party market, the younger demographic, and ICANN, the more family-oriented one, do you think that you may have a greater penetration rate at Utopia?

Speaker Change: It's too early to tell I think a three four day.

Speaker Change: Mix makes people make.

Speaker Change: You know quicker choices because they got a shorter period of time over three days of correlated with one extra day.

Speaker Change: Deciding when they're going to participate in some of the amenities, including spa.

Speaker Change: But listen I think the shift is outstanding I think the activity that is chosen for the three or four day.

Leonard Fluxman: I think will complement competitive nurse against their other vessels. So no, I don't see any challenges. Certainly nothing that we can't. Adapt to. And this is not the first time we're handling three- and four-day party cruises. We've done this for decades. I was actually going the other way. I was thinking this was more of an opportunity. It doesn't challenge, you know, younger couple. I don't have kids in spend time at the spa, you know, as opposed to, you know, playing with their kids. And I sound like someone, yeah, I kid. I'm sorry. I'm not. No, no, no, no, I don't believe my product is actually better for you.

Speaker Change: I think we'll complement.

Operator: competitiveness again.

Speaker Change: Competitiveness against their other vessels so no I don't see any challenge, there's certainly nothing that we can't.

Operator: Adapt.

Speaker Change: Adapt to and this is not the first time, we're handling three important third party crews as they've done this for decades.

Speaker Change: I was actually going the other way I was thinking this is more of an opportunity it doesn't challenge.

Operator: I was actually going the other way. I was thinking this was more of an opportunity than a challenge, you know, younger couples who don't have kids can spend time at the spa, you know, as opposed to, you know, playing with their kids.

Speaker Change: You know you have a couple I don't have the case can spend time with the Spa you now as opposed to you know the language with their kids and I sound like My Kid.

Operator: And I sound like some anti-kid. I'm sorry. I'm not. No, no, no, no. Utopia type product is actually...

Operator: Sorry.

Speaker Change: No no no no.

Operator: They'll be at my product is actually better for you.

Leonard Fluxman: It could well be, but remember, whether you're on the family ship or the party ship with no kids, or if you're on the family ship, the icon with kids, the way in which the itinerary is laid out on the icon, the ability to put different kids at different ages in different types of programs. It doesn't impede the married couple from participating and enjoying many things that adults like to do on board. So no, I look like is there an opportunity to better do better with the young cry possibly. But then again, you know, we'll have to see as a concealer group how they behave.

Speaker Change: It could well be but remember whether you run that families shipped with a partnership with no kids with you on the family shifts the icon with kids.

Speaker Change: The way in which the.

Speaker Change: Itinerary is laid out on the icon.

Speaker Change: The ability to put different kids at different ages and different types of programs.

Speaker Change: It doesn't impede.

Speaker Change: The married couple.

Operator: from participating and enjoying many things that adults like to do on board. So now, look, is there an opportunity to do better with the younger crowd? Possibly. But then again, we'll have to see, as a consumer group, how they behave. So yeah, it could be an opportunity, but I certainly don't think so.

Operator: From participating and enjoying many things that adults like to do on board. So no I look I is there an opportunity to be able to do better with a younger crowd, possibly but then again you know we'll have to see.

Operator: As a consumer group, how they behave so yeah, it could be an opportunity, but I certainly don't think.

Leonard Fluxman: So yeah, it could be an opportunity, but I certainly don't think the icon is disadvantaged by.

Speaker Change: The icon is disadvantaged by it.

Assia Georgieva: All right, fair enough.

Speaker Change: Alright fair enough.

Assia Georgieva: And if I may ask one last question, we know that pre-bookings tend to be a multiplier in terms of what gets spent on board. And you mentioned in your prepared remarks that having wins that are onboarding with you, they may not be quite as attuned to, or not have the pre-booking engine that would actually feed into pre-booking spots. So, what's the opportunity in 2025, do you think each of those pre-booking management versus what we have had this year? So look, as I mentioned, we were still onboarding different banners and continue to onboard them to get to scale.

Speaker Change: May I ask one last question.

Operator: We know that people tend to be a multiplier in terms of what gets spent on board.

Speaker Change: You mentioned in your prepared remarks that having.

Speaker Change: Is that are onboarding with you.

Speaker Change: May not be quiet.

Operator: Q2.

Operator: Okay.

Operator: People.

Operator: It was actually feed into.

Operator: Yeah.

Operator: People respond.

Operator: Yeah.

Operator: Yeah.

Speaker Change: Do you think.

Operator: Okay.

Operator: Okay.

Speaker Change: We have had this year.

Speaker Change: So look as I mentioned, we were still onboarding, our different banners and continuing to onboard them to get to scale. We think pre booking will continue to move upwards.

Leonard Fluxman: We think pre-booking will continue to move upwards. There are some good banners still to get on to the pre-booking platform at scale. We think there is a lot of work to be done with our cruise line partners with respect to enhancing the pre-booking experience and journey. We continue to provide content; we prefer to provide different types of views of what is available on board. And we will continue to augment that so that they adapt to it and continue to improve the pre-booking journey. I think if they utilize everything that we're giving them, we will certainly see pre-booking start to move northwards.

Speaker Change: There are some good band is still to get onto the people can platform at scale.

Operator:

Speaker Change: We think there is a lot of work to be done with our cruise line partners with respect to enhancing the pre booking experience and journey.

Speaker Change: We continue to provide content because they need to provide.

Operator:

Speaker Change: Different types of abuse of what is available on board and we will continue to augment that so that they adapt to it and continue to improve the people can journey I think if they utilize everything that we're giving them.

Speaker Change: We will certainly see pre bookings start to move northwards.

Stephen Lazarus: In currently, we're at about 30% rate correct. Oh, you broke up there. What kinds of questions? Pre-bookings. We're currently at about 30% penetration in terms of pre-bookings. It's 23% right now, as we reported. Okay, I'm sorry. The 30%, the 30%, the 30% dimension is a pre-book guest on average spends 30% or slightly more than that. And guests that do not pre-book.

Operator: Okay.

Speaker Change: A third.

Operator: Correct.

Speaker Change: Sorry, you broke up there what kinds of Christmas bookings.

Operator: Yeah.

Operator: Penetration.

Operator: Yeah.

Speaker Change: It's 20 people pay bookings up 23% right now as we reported.

Operator: Okay.

Speaker Change: 30, 30, 30 30, plus the 30% you mentioned is a pre book guest.

Speaker Change: On average spans 30% or slightly more than that the guests.

Operator: guests that do not. Thank you.

Speaker Change: I guess that do not pre book.

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

Speaker Change: Okay perfect. Thank you so much guys.

Assia Georgieva: Okay, thank you so much, guys.

Leonard Fluxman: Again, a great quarter, and thank you for the great news this morning. Thank you.

Operator: Great.

Speaker Change: The great news this morning.

Operator: Okay.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Mr. Lindner flux men executive Chairman for any closing remarks. Please go ahead Sir.

Leonard Fluxman: This concludes our question and answer session. I would like to turn the conference back over to Mr. Leonard Fluxman, Executive Chairman, for any further remarks. Please go ahead, sir. All right, thanks, Chuck. Once again, thank you all for joining us today. We're very excited about the results for the first half of 2024. And we look forward to speaking with you when we report third quarter results and seeing many of you during our upcoming investor meetings. Thank you very much.

Operator: Alright, Thanks, Chuck once again, thank you all for joining US today, we're very excited about the results for the first half of 2024, and we look forward to speaking with you. When we report third quarter results and seeing many of you during our upcoming investor meetings. Thank you very much.

Operator: The conference is now concluded. Thank you for attending today's presentation.

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

Operator: [music].

Operator: You may now.