A company that runs spas, salons, and fitness centers aboard cruise ships and at destination resorts around the world. Its roots reach back to a London salon founded by Henry Steiner in 1901, which earned a Royal Warrant from Queen Mary in 1937 and began operating on cruise ships in 1956. The business went public in 2019 through a merger with a special purpose acquisition company and is incorporated in The Bahamas.
Operating margin reached 9.4% as revenue rose 9% to $261.2M, while free cash flow more than doubled sequentially to $31.0M.
rebounded sharply from a tight first quarter. rose 9% to $261.2 million and widened to 9.4%, as a 4% increase in from fleet expansion and higher guest spending drove the top line. The company's cash generation strengthened, but cash reserves remain thin relative to its commitments.
Key takeaways
reached $31.0 million, up 77% and more than five times the $4.7 million generated in the prior quarter, as rose to $33.3 million.
rose 9% to $261.2 million, driven by a 4% increase in from new ship builds and a 1.2% rise in average guest spend, partially offset by a $1.3 million decline in destination resort revenue from hotel closures.
rose 11% to $24.5 million, and widened 0.2 points to 9.4%, as service growth and lower more than offset a 63% increase in administrative expenses tied to third-party fees from a restructuring.
Section summaries
Management's Discussion and Analysis
Total revenue rose 9% YoY to $261.2M in Q2 2026, driven by 4% more revenue days, fleet expansion, and higher guest spend.
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Q2 2026 total increased 9% to $261.2M, with service revenue up 11% to $214.4M while product revenue dipped 1% to $46.8M due to a UK/Italy reorganization.
growth was fueled by a 4% rise in revenue days, new ship builds, and a 1.2% increase in average guest spend, partially offset by a $1.3M decline in destination resort revenue from hotel closures.
rose 16% to $23.2 million, helped by the improvement in , a reduction in as fell 10% to $81.6 million, and a lower .
The company paid $10.2 million in dividends during the first half of the year, while share repurchases slowed to $0.4 million from $37.9 million a year earlier, reflecting a more conservative capital allocation as cash and equivalents ended the quarter at $40.4 million.
What changed
The Q1 FY2026 watch item on whether the 9.2% could be sustained was answered: margin widened further to 9.4%, even as the cost reallocation from salaries to third-party administrative expenses continued, with administrative costs rising 63%.
The liquidity concern flagged in Q1, with cash at $16.1 million, eased this quarter as of $31.0 million rebuilt cash and equivalents to $40.4 million, though this remains below the $62.5 million held a year ago.
The pace of share repurchases decelerated markedly to $0.4 million this quarter from $37.9 million in the first half of 2025, signaling a shift in capital allocation priorities toward preserving cash and paying dividends.
What to watch
Whether the 9.4% can be sustained or expanded, given that the cost reallocation from salaries to third-party administrative fees is a structural shift, not a one-time saving, and administrative expenses rose 63% this quarter.
The pace of new ship additions from cruise line partners, which drove the 4% increase in and remains the primary engine of growth.
The company's ability to maintain its $0.04 per-share quarterly while rebuilding cash reserves, given that cash and equivalents of $40.4 million remain below the $62.5 million held a year ago.
Any developments on Pillar Two global minimum tax implementation in The Bahamas or other jurisdictions, which management flags as a risk that could materially increase the and cash tax liabilities.
Cost of services rose 10% to $176.9M in line with service growth, while administrative expenses jumped 63% to $7.2M due to $2.0M in third-party fees from a restructuring that shifted costs out of salaries.
grew 16% to $23.2M, helped by a $2.4M improvement in , lower from a $15M debt reduction, and a lower .
for the first half of 2026 was $42.4M, up $12.0M , driven by higher and a favorable change.
The company paid $10.2M in dividends and $2.5M in term loan principal during H1 2026, while share repurchases slowed to $0.4M from $37.9M a year earlier.
Quantitative and Qualitative Disclosures About Market Risk
For a discussion of our market risks, refer to Part II, Item 7A. - Quantitative and Qualitative Disclosures about Market Risk in our 2025 Form 10-K. There have been no material changes to our exposure to market risks since the date of our 2025 Form 10-K.
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For a discussion of our market risks, refer to Part II, Item 7A. - Quantitative and Qualitative Disclosures about Market Risk in our 2025 Form 10-K. There have been no material changes to our exposure to market risks since the date of our 2025 Form 10-K.
There have been no material changes in the risk factors previously disclosed in the Company’s 2025 Form 10-K, Part II, Item 1A. “Risk Factors.” However, the risks and uncertainties that we face are not limited to those set forth in the 2025 Form 10-K. Additional risks and uncert…
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There have been no material changes in the risk factors previously disclosed in the Company’s 2025 Form 10-K, Part II, Item 1A. “Risk Factors.” However, the risks and uncertainties that we face are not limited to those set forth in the 2025 Form 10-K. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also materially and adversely affect our business and the trading price of our securities.