Gaia, Inc. (NASDAQ: GAIA), a conscious media and
community company, reported financial results for the third quarter
ended September 30, 2024.
Highlights:
- 10% growth in revenue with large acceleration expected in next
quarter.
- Sixth consecutive quarter of positive operating and free cash
flow.
“Over the last few months we raised, for the first time in our
history, our subscription prices for all members by at least two
dollars. While the initial losses from the price increase kept our
member count flat, we expect that the price increases will push our
revenue to almost $24 million during fourth quarter, up from $22.2
million currently,” said Jirka Rysavy, Gaia’s Chairman.
“Q3 marks another successful quarter of free cash flow
generation while maintaining double-digit growth, reinforcing our
position as a leader in conscious media. We’re especially
encouraged by the positive momentum and early success of our recent
price adjustments, which are setting a solid foundation for
accelerated growth heading into Q4 and 2025,” said James Colquhoun,
Gaia’s CEO. “Additionally, we would like to announce our
partnership with ElevenLabs, who will now be Gaia’s official
provider for AI dubbing and translation across multiple languages.
This partnership helps us to enhance our operating efficiency as we
continue growing our international audience.”
Gaia CFO Ned Preston commented: “Operating cash flows for the
first nine months finished at $4.3 million, representing a $1.6
million improvement from the first nine months of 2023 and
continues the momentum we've delivered in the prior five
quarters.”
Third Quarter 2024 Financial Results
Revenues for the third quarter grew $2.0 million or 10% to $22.2
million from $20.2 million in the year-ago quarter. Member count
increased on a year-over-year standpoint to 846,000 as of September
30, 2024, up from 790,500 or 7% from September 30, 2023.
Gross profit in the third quarter increased 11% to $19.1 million
from $17.2 million and gross margins improved to 86.0% from 85.2%
from the year-ago quarter.
Net loss was $(1.2) million, or $(0.05) per share compared to
the year-ago quarter at $(0.8) million, or $(0.04) per share.
Adjusting for the $1.8 million ERTC (Employee Retention Tax Credit)
recognized in the third quarter of 2023, the quarterly net loss
improved by $1.4 million.
For the third quarter of 2024, operating cash flow was $0.4
million and free cash flow was $0.1 million, representing the sixth
consecutive quarter of positive cash flow.
In the last nine months revenue grew 10.4%, with an improvement
in operating cash flow of $1.6 million and free cash flow of $1.5
million.
Conference Call
Date: Monday, November 4, 2024Time: 4:30 p.m. Eastern time (2:30
p.m. Mountain time)Toll-free dial-in number:
1-877-269-7751International dial-in number:
1-201-389-0908Conference ID: 13749012
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact Gateway Group at (949)
574-3860.
The conference call will be broadcast live and available for
replay here and via ir.gaia.com.
A telephonic replay of the conference call will be available
after 7:30 p.m. Eastern time on the same day through November 18,
2024.
Toll-free replay number: 1-844-512-2921International replay
number: 1-412-317-6671Replay ID: 13749012
About Gaia
Gaia is a member-supported global video
streaming service and community that produces and curates conscious
media through four primary channels—Seeking Truth, Transformation,
Alternative Healing and Yoga—in four languages (English, Spanish,
French and German) to its members in 185 countries. Gaia’s library
includes over 10,000 titles, over 88% of which is exclusive to
Gaia, and approximately 75% of viewership is generated by content
produced or owned by Gaia. Gaia is available on Apple TV, iOS,
Android, Roku, Chromecast, and sold through Amazon Prime Video and
Comcast Xfinity. For more information about Gaia, visit
www.gaia.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. All statements other
than statements of historical fact are forward looking statements
that involve risks and uncertainties. When used in this discussion,
we intend the words “anticipate,” “believe,” “contemplate,”
“continue,” “could,” “estimate,” “expect,” “future,” “hope,”
“intend,” “may,” “might,” “objective,” “ongoing,” “plan,”
“potential,” “predict,” “project,” “should,” “strive,” “target,”
“will,” “would” and similar expressions as they relate to us to
identify such forward-looking statements. Our actual results could
differ materially from the results anticipated in these
forward-looking statements as a result of certain factors set forth
under “Risk Factors” and elsewhere in our filings with the U.S.
Securities and Exchange Commission, including in our Annual Report
on Form 10-K for the year ended December 31, 2023. Risks and
uncertainties that could cause actual results to differ include,
without limitation: our ability to attract new members and retain
existing members; our ability to compete effectively, including for
customer engagement with different modes of entertainment;
maintenance and expansion of device platforms for streaming;
fluctuation in customer usage of our service; fluctuations in
quarterly operating results; service disruptions; production risks;
general economic conditions; future losses; loss of key personnel;
price changes; brand reputation; acquisitions; new initiatives we
undertake; security and information systems; legal liability for
website content; failure of third parties to provide adequate
service; future internet-related taxes; our founder’s control of
us; litigation; consumer trends; the effect of government
regulation and programs; the impact of public health threats; our
ability to remediate the material weaknesses in our internal
control over financial reporting and technical accounting; and
other risks and uncertainties included in our filings with the
Securities and Exchange Commission. We caution you that no
forward-looking statement is a guarantee of future performance, and
you should not place undue reliance on these forward-looking
statements which reflect our views only as of the date of this
press release. We undertake no obligation to update any
forward-looking information.
Non-GAAP Measures
In addition to disclosing financial results
calculated in accordance with generally accepted accounting
principles in the United States of America (GAAP), the
financial information included in this release contains non-GAAP
financial measures, including Free Cash Flow. These non-GAAP
measures should not be considered a substitute for, or superior to,
financial measures and results calculated in accordance with GAAP,
including net income, and reconciliations to GAAP financial
statements should be carefully evaluated. Free Cash Flow represents
net cash provided by operating activities plus cash paid for
interest payments, less cash used in investing activities, plus
cash from non-core business activities. We believe Free Cash Flow
is also useful as one of the bases for comparing the Gaia’s
performance with its competitors. Although Free Cash Flow and
similar measures are frequently used as measures of cash flows
generated from operations by other companies, Gaia’s calculation of
Free Cash Flow might not necessarily be comparable to such other
similarly titled captions of other companies. We believe that both
management and investors benefit from referring to these non-GAAP
financial measures in assessing our performance and when planning,
forecasting and analyzing future periods.
Company Contact:Ned PrestonChief Financial
OfficerGaia, Inc.Investors@gaia.com
Investor Relations:Gateway Group, Inc.Cody
Slach(949) 574-3860GAIA@gateway-grp.com
|
GAIA, INC.Condensed Consolidated Balance
Sheets |
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
(in thousands, except share and per share
data) |
|
2024 |
|
|
2023 |
|
| |
|
(unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
4,365 |
|
|
$ |
7,766 |
|
|
Accounts receivable |
|
|
5,035 |
|
|
|
4,111 |
|
|
Other receivables |
|
|
2,333 |
|
|
|
2,191 |
|
|
Prepaid expenses and other current assets |
|
|
2,647 |
|
|
|
2,015 |
|
|
Total current assets |
|
|
14,380 |
|
|
|
16,083 |
|
| Media library, net |
|
|
38,956 |
|
|
|
40,125 |
|
| Operating right-of-use asset,
net |
|
|
5,666 |
|
|
|
6,288 |
|
| Property and equipment, net |
|
|
26,144 |
|
|
|
26,303 |
|
| Equity method investment |
|
|
— |
|
|
|
6,374 |
|
| Technology license, net |
|
|
15,752 |
|
|
|
— |
|
| Investments and other assets,
net |
|
|
6,805 |
|
|
|
3,157 |
|
| Goodwill |
|
|
31,943 |
|
|
|
31,943 |
|
|
Total assets |
|
$ |
139,646 |
|
|
$ |
130,273 |
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
13,573 |
|
|
$ |
12,038 |
|
|
Accrued and other liabilities |
|
|
1,906 |
|
|
|
2,599 |
|
|
Long-term debt, current portion |
|
|
160 |
|
|
|
155 |
|
|
Operating lease liability, current portion |
|
|
824 |
|
|
|
780 |
|
|
Deferred revenue |
|
|
17,366 |
|
|
|
15,861 |
|
|
Total current liabilities |
|
|
33,829 |
|
|
|
31,433 |
|
| Long-term debt, net of current
portion |
|
|
5,680 |
|
|
|
5,801 |
|
| Operating lease liability, net of
current portion |
|
|
5,087 |
|
|
|
5,708 |
|
| Deferred taxes, net |
|
|
551 |
|
|
|
551 |
|
|
Total liabilities |
|
|
45,147 |
|
|
|
43,493 |
|
| Commitments and
Contingencies |
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
|
|
Class A common stock, $0.0001 par value, 150,000,000 shares
authorized, 18,066,942 and 17,813,179 shares issued, 18,001,955 and
17,748,374 shares outstanding at September 30,
2024 and December 31, 2023, respectively |
|
|
2 |
|
|
|
2 |
|
|
Class B common stock, $0.0001 par value, 50,000,000 shares
authorized, 5,400,000 shares issued and outstanding at September
30, 2024 and December 31, 2023, respectively |
|
|
1 |
|
|
|
1 |
|
|
Additional paid-in capital |
|
|
170,822 |
|
|
|
170,695 |
|
|
Accumulated deficit |
|
|
(89,625 |
) |
|
|
(85,195 |
) |
|
Total Gaia, Inc. shareholders’ equity |
|
|
81,200 |
|
|
|
85,503 |
|
|
Noncontrolling interests |
|
|
13,299 |
|
|
|
1,277 |
|
|
Total equity |
|
|
94,499 |
|
|
|
86,780 |
|
|
Total liabilities and equity |
|
$ |
139,646 |
|
|
$ |
130,273 |
|
| GAIA,
INC.Condensed Consolidated Statements of
Operations (unaudited) |
|
| |
|
For the Three MonthsEnded September 30, |
|
|
For the Nine MonthsEnded September 30, |
|
| (in thousands,
except per share data) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
|
|
|
|
|
|
Revenues, net |
|
$ |
22,156 |
|
|
$ |
20,223 |
|
|
$ |
65,930 |
|
|
$ |
59,709 |
|
| Cost of revenues |
|
|
3,101 |
|
|
|
2,983 |
|
|
|
9,684 |
|
|
|
8,595 |
|
| Gross profit |
|
|
19,055 |
|
|
|
17,240 |
|
|
|
56,246 |
|
|
|
51,114 |
|
| Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and operating |
|
|
18,398 |
|
|
|
16,254 |
|
|
|
54,854 |
|
|
|
49,462 |
|
|
Corporate, general and administration |
|
|
2,013 |
|
|
|
1,433 |
|
|
|
5,630 |
|
|
|
4,726 |
|
| Total operating expenses |
|
|
20,411 |
|
|
|
17,687 |
|
|
|
60,484 |
|
|
|
54,188 |
|
| Loss from operations |
|
|
(1,356 |
) |
|
|
(447 |
) |
|
|
(4,238 |
) |
|
|
(3,074 |
) |
| Equity method investment
loss |
|
|
— |
|
|
|
(125 |
) |
|
|
— |
|
|
|
(375 |
) |
| Interest and other expense,
net |
|
|
(144 |
) |
|
|
(141 |
) |
|
|
(396 |
) |
|
|
(375 |
) |
| Loss before income taxes |
|
|
(1,500 |
) |
|
|
(713 |
) |
|
|
(4,634 |
) |
|
|
(3,824 |
) |
| Provision for income taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Net loss |
|
|
(1,500 |
) |
|
|
(713 |
) |
|
|
(4,634 |
) |
|
|
(3,824 |
) |
| Net income (loss) attributable to noncontrolling interests |
|
|
(308 |
) |
|
|
59 |
|
|
|
(204 |
) |
|
|
142 |
|
| Net loss attributable to common
shareholders |
|
$ |
(1,192 |
) |
|
$ |
(772 |
) |
|
$ |
(4,430 |
) |
|
$ |
(3,966 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations (attributable to common shareholders) |
|
$ |
(0.05 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.19 |
) |
| Basic loss per share |
|
$ |
(0.05 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.19 |
) |
| Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations (attributable to common shareholders) |
|
$ |
(0.05 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.19 |
) |
| Diluted loss per share |
|
$ |
(0.05 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.19 |
) |
| GAIA,
INC.Condensed Consolidated Statement of Cash Flows
(unaudited) |
|
|
|
|
For the Three MonthsEnded September 30, |
|
|
For the Nine MonthsEnded September 30, |
|
| (in
thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
|
|
| Net cash provided by (used
in): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities |
|
$ |
409 |
|
|
$ |
1,415 |
|
|
$ |
4,264 |
|
|
$ |
2,685 |
|
|
Net cash used in investing activities |
|
|
(1,361 |
) |
|
|
(1,066 |
) |
|
|
(13,881 |
) |
|
|
(2,975 |
) |
|
Net cash provided by (used in) financing activities |
|
|
(142 |
) |
|
|
1 |
|
|
|
6,216 |
|
|
|
(43 |
) |
| Net change in cash, cash
equivalents, and restricted cash |
|
$ |
(1,094 |
) |
|
$ |
350 |
|
|
$ |
(3,401 |
) |
|
$ |
(333 |
) |
|
Reconciliation of Net Cash Provided by Operating Activities
to Free Cash Flow and Adjusted Free Cash Flow
(unaudited) |
|
| |
|
For the Three MonthsEnded September 30, |
|
|
For the Nine MonthsEnded September 30, |
|
| (in
thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities |
|
$ |
409 |
|
|
$ |
1,415 |
|
|
$ |
4,264 |
|
|
$ |
2,685 |
|
|
Cash paid for interest |
|
|
141 |
|
|
|
141 |
|
|
|
403 |
|
|
|
394 |
|
|
Net cash used in investing activities |
|
|
(1,361 |
) |
|
|
(1,066 |
) |
|
|
(13,881 |
) |
|
|
(2,975 |
) |
|
Change in cash from non-core business activities |
|
|
950 |
|
|
|
105 |
|
|
|
11,050 |
|
|
|
213 |
|
| Free cash flow |
|
$ |
139 |
|
|
$ |
595 |
|
|
$ |
1,836 |
|
|
$ |
317 |
|
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