Shares of OneSpaWorld Holdings Limited (OSW) plunged 5.73% in pre-market trading on Wednesday following the release of its first-quarter 2025 financial results. Despite beating analyst expectations, the company's report revealed a significant year-over-year decrease in net income, which appears to have spooked investors.

OneSpaWorld reported Q1 2025 earnings per share of $0.22, surpassing the average analyst estimate of $0.21. Revenue for the quarter increased by 4% to $219.6 million, also beating the Street forecasts of $219.1 million. However, net income for the quarter fell to $15.3 million, down from $21.2 million in the same period last year, representing a 28% decrease.

The company's CEO, Leonard Fluxman, commented on the results, stating, "We are pleased to report first quarter results at the high end of our guidance and reaffirm our fiscal year 2025 guidance." However, the significant drop in net income seems to have overshadowed the positive aspects of the report in investors' eyes.

Adding to the mixed signals, OneSpaWorld announced a new $75 million share repurchase program and declared a quarterly dividend of $0.04 per share. The company also provided guidance for Q2 2025, projecting revenue between $235-$240 million and adjusted EBITDA of $28-$30 million. For the full year 2025, OneSpaWorld reaffirmed its previous guidance of $950-$970 million in revenue and $115-$125 million in adjusted EBITDA.

The market's negative reaction to OneSpaWorld's earnings report highlights investors' concerns about the company's profitability, despite its revenue growth and beat on earnings estimates. As trading continues throughout the day, it remains to be seen whether the stock will recover from its pre-market plunge or if investors will continue to focus on the decline in net income.