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Dec 31, 2020
XpresSpa Q4 2020 Earnings Report
XpresSpa Group announced Q4 2020 financial results, revealing a decrease in revenue due to COVID-19 impacts and temporary spa closures, offset by revenue from strategic spa partnerships, while XpresCheck saw increasing patient testing volumes and average revenue per patient.
Key Takeaways
XpresSpa Group's Q4 2020 revenue decreased due to COVID-19's impact on spa operations. The company focused on XpresCheck wellness centers, which showed promising patient testing volumes and revenue per patient. Despite not recognizing revenue from XpresCheck in Q4 2020, the company anticipates revenue recognition in 2021. They are also developing a new travel health and wellness brand.
Revenue decreased in Q4 2020 due to temporary closure of spa locations.
XpresCheck saw increased patient testing volumes and revenue per patient, driven by the rollout of COVID-19 rapid testing.
The company is developing a new travel health and wellness brand, with the first locations expected to open in late summer/early fall 2021.
As of December 31, 2020, the company had a strong liquidity position with approximately $90 million in cash and cash equivalents.
XpresSpa
XpresSpa
Forward Guidance
XpresSpa Group is focused on expanding its XpresCheck wellness centers and launching a new travel health and wellness brand to capitalize on the growing demand for health-focused travel services. The company expects to recognize revenue from XpresCheck in 2021 and is optimistic about a strong recovery in the second half of the year as travel resumes.
Positive Outlook
- Rising patient testing volumes and increased average revenue per patient at XpresCheck Wellness Centers.
- Rollout of COVID-19 Rapid Testing has become the preferred testing option of over 73% of all patients.
- Increasing passenger flow due to the resumption of personal and leisure travel.
- Development of a new travel health and wellness brand to meet the emerging needs of travelers in a post-COVID-19 environment.
- Strong liquidity position to support ongoing investments and potential acquisitions.
Challenges Ahead
- Overall airport traffic remains significantly below 2019 levels.
- Unable to recognize revenue for accounting purposes during the fourth quarter of 2020 due to uncertainties around the cash flow of the XpresCheck business.
- Reopened spa locations have underperformed due to limited airport traffic and changes in consumer behavior.
- Impairment of XpresSpa trade name and leasehold improvements due to the changing business climate.
- Future development of additional XpresCheck Wellness Centers is being reassessed based on economic viability.