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Gaia Reports Third Quarter 2023 Results

Gaia, Inc.
Gaia, Inc.

- Increased Member Growth with Continued Positive Cash Flow -

BOULDER, Colo., Oct. 30, 2023 (GLOBE NEWSWIRE) -- Gaia, Inc. (NASDAQ: GAIA), a conscious media and community company, reported financial results for the third quarter ended September 30, 2023.

“In the third quarter of 2023 we experienced another increase in revenue and member count while continuing with a positive cash flow generation,” said Jirka Rysavy, Gaia’s CEO. “Our annualized gross profit per employee in the third quarter grew to our all-time high of over $650,000, reflecting our operating efficiency, which was brought on by the cost improvements undertaken in the first quarter. Gaia Marketplace, which we rolled out so far only to less than 5% of our members, generated over $100,000 in sales within the first 20 days.”

Gaia CFO Ned Preston commented: “The initiatives implemented over the past nine months to attract and retain our members have continued in the third quarter. We continue to focus on growing revenues in a cost-effective manner, while also generating cash flows from operations in excess of our reinvestment in content and other capex.  The member growth doubled compared to the second quarter and we expect the member growth to further increase during 2024.”

Third Quarter 2023 Financial Results

Revenues for the third quarter were $20.2 million, another sequential increase from $19.8 million in the second quarter and an increase from $19.9 million in the year ago quarter, as the company recovered from the post-COVID subscriber contraction experienced industry-wide during 2022.

Member count growth during the third quarter doubled to 16,000 members added, compared to the second quarter, finishing with 790,500 members as of September 30, 2023, above the 776,000 members from the year ago quarter.

Gross profit of $17.2 million was in line with the year ago quarter.

Total operating expenses were in-line at $17.7 million or 87.5% of revenue compared to $17.6 million or 88.2% of revenue in the year-ago quarter.

Net loss was $0.6 million, or $(0.03) per share, compared to net loss of $2.4 million, or $(0.11) per share, in the year-ago quarter.

EBITDA increased to $3.9 million, up from $1.8 million in the third quarter last year.

Gaia continued positive net cash flow generation with a cash balance as of September 30, 2023 of $11.2 million compared to $10.9 million at the end of last quarter.

Conference Call

Date: Monday, October 30, 2023
Time: 4:30 p.m. Eastern time (2:30 p.m. Mountain time)
Toll-free dial-in number: 1-877-269-7751
International dial-in number: 1-201-389-0908
Conference ID: 13741146

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 13, 2023.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13741146

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 85% 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, 2022. 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 devise platforms for steaming; 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, including the coronavirus (COVID-19) pandemic and our response to it; 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 United States generally accepted accounting principles (GAAP), the financial information included in this release contains non-GAAP financial measures, including EBITDA and Adjusted EBITDA. 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.

EBITDA represents net income before interest expense, provision for income taxes, other income, depreciation and amortization.   Adjusted EBITDA is defined as EBITDA further adjusted to remove acquisition costs, share-based compensation expense and the results of discontinued operations. EBITDA and Adjusted EBITDA do not represent measures of net income, as that term is defined under GAAP, and should not be considered as an alternative to net income or as an indicator of our operating performance.

Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow available for management or discretionary use as such measures do not consider certain cash requirements such as capital expenditures, tax payments and debt service requirements. EBITDA and Adjusted EBITDA as presented herein are not necessarily comparable to similarly titled measures.

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. EBITDA and Adjusted EBITDA are key performance measures management uses to assess Gaia’s operating performance and to facilitate internal comparisons to our historical performance. We believe EBITDA and Adjusted EBITDA are useful metrics to investors, enabling them to better assess Gaia’s operating performance in the context of current period results and provide for better comparability with Gaia’s historically disclosed EBITDA and Adjusted EBITDA, as well as allowing greater transparency with respect to the key metrics used by management in its financial and operational decision-making. Additionally, investors and the analyst community use these non-GAAP financial measures to help them analyze the health of our business.

Company Contact:
Ned Preston
Chief Financial Officer
Gaia, Inc.
Investors@gaia.com

Investor Relations:
Gateway Group, Inc.
Cody Slach
(949) 574-3860
GAIA@gateway-grp.com

GAIA, INC.
Condensed Consolidated Balance Sheets

 

 

September 30,

 

 

December 31,

 

(in thousands, except share and per share data)

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash

 

$

11,229

 

 

$

11,562

 

Accounts receivable

 

 

3,829

 

 

 

2,955

 

Prepaid expenses and other current assets

 

 

4,132

 

 

 

2,656

 

Total current assets

 

 

19,190

 

 

 

17,173

 

Media library, software and equipment, net

 

 

50,481

 

 

 

51,115

 

Right-of-use lease asset, net

 

 

6,492

 

 

 

7,093

 

Real estate, investment and other assets, net

 

 

30,296

 

 

 

30,979

 

Goodwill

 

 

31,943

 

 

 

31,943

 

Total assets

 

$

138,402

 

 

$

138,303

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable, accrued and other liabilities

 

$

14,051

 

 

$

12,355

 

Short-term debt and lease liability

 

 

9,920

 

 

 

894

 

Deferred revenue

 

 

15,334

 

 

 

14,124

 

Total current liabilities

 

 

39,305

 

 

 

27,373

 

Long-term debt, net

 

 

5,842

 

 

 

14,958

 

Long-term lease liability

 

 

5,911

 

 

 

6,489

 

Deferred taxes

 

 

499

 

 

 

499

 

Total liabilities

 

 

51,557

 

 

 

49,319

 

Total shareholders' equity

 

 

86,845

 

 

 

88,984

 

Total liabilities and shareholders' equity

 

$

138,402

 

 

$

138,303

 

GAIA, INC.
Condensed Consolidated Statements of Operations

 

 

For the Three Months Ended
September 30,

 

 

For the Nine Months Ended
September 30,

 

(in thousands, except per share data)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

Revenues, net

 

$

20,223

 

 

$

19,907

 

 

$

59,709

 

 

$

62,458

 

Cost of revenues

 

 

2,983

 

 

 

2,648

 

 

 

8,595

 

 

 

8,312

 

Gross profit

 

 

17,240

 

 

 

17,259

 

 

 

51,114

 

 

 

54,146

 

Gross profit margin

 

 

85.2

%

 

 

86.7

%

 

 

85.6

%

 

 

86.7

%

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and operating

 

 

16,254

 

 

 

15,543

 

 

 

49,462

 

 

 

48,197

 

Corporate, general and administration

 

 

1,433

 

 

 

2,019

 

 

 

4,726

 

 

 

5,598

 

Acquisition costs

 

 

 

 

 

 

 

 

 

 

 

49

 

Total operating expenses

 

 

17,687

 

 

 

17,562

 

 

 

54,188

 

 

 

53,844

 

Income (loss) from operations

 

 

(447

)

 

 

(303

)

 

 

(3,074

)

 

 

302

 

Interest and other expense, net

 

 

(141

)

 

 

(65

)

 

 

(375

)

 

 

(175

)

SEC settlement

 

 

 

 

 

(2,000

)

 

 

 

 

 

(2,000

)

Loss before income taxes

 

 

(588

)

 

 

(2,368

)

 

 

(3,449

)

 

 

(1,873

)

Provision for (benefit from) income taxes

 

 

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations

 

 

(588

)

 

 

(2,368

)

 

 

(3,449

)

 

 

(1,873

)

Loss from discontinued operations

 

 

 

 

 

(7

)

 

 

 

 

 

(300

)

Net loss

 

$

(588

)

 

$

(2,375

)

 

$

(3,449

)

 

$

(2,173

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.03

)

 

$

(0.11

)

 

$

(0.16

)

 

$

(0.09

)

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(0.01

)

Basic earnings (loss) per share

 

$

(0.03

)

 

$

(0.11

)

 

$

(0.16

)

 

$

(0.10

)

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.03

)

 

$

(0.11

)

 

$

(0.16

)

 

$

(0.09

)

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(0.01

)

Diluted earnings (loss) per share

 

$

(0.03

)

 

$

(0.11

)

 

$

(0.16

)

 

$

(0.10

)

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

21,154

 

 

 

20,806

 

 

 

20,951

 

 

 

20,686

 

Diluted

 

 

21,154

 

 

 

20,806

 

 

 

20,951

 

 

 

20,686

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA*

 

$

3,881

 

 

$

1,795

 

 

$

9,628

 

 

$

10,011

 

* See reconciliation below.

GAIA, INC.
Summary of Cash Flows

 

 

For the Three Months Ended
September 30,

 

 

For the Nine Months Ended
September 30,

 

(in thousands)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

Net cash provided by (used in):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating activities - continuing operations

 

$

3,601

 

 

$

1,686

 

 

$

10,081

 

 

$

8,373

 

Operating activities - discontinued operations

 

 

 

 

 

(7

)

 

 

 

 

 

(300

)

Investing activities

 

 

(3,252

)

 

 

(4,484

)

 

 

(10,371

)

 

 

(14,903

)

Financing activities

 

 

1

 

 

 

7,451

 

 

 

(43

)

 

 

7,402

 

Net change in cash

 

$

350

 

 

$

4,646

 

 

$

(333

)

 

$

572

 

Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA

 

 

For the Three Months Ended
September 30,

 

 

For the Nine Months Ended
September 30,

 

(in thousands)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

Net loss

 

$

(588

)

 

$

(2,375

)

 

$

(3,449

)

 

$

(2,173

)

Interest expense, net

 

 

141

 

 

 

65

 

 

 

375

 

 

 

175

 

Depreciation and amortization expense

 

 

4,328

 

 

 

4,105

 

 

 

12,702

 

 

 

12,009

 

EBITDA

 

 

3,881

 

 

 

1,795

 

 

 

9,628

 

 

 

10,011

 

Acquisition costs

 

 

 

 

 

 

 

 

 

 

 

49

 

Share-based compensation expense

 

 

56

 

 

 

338

 

 

 

599

 

 

 

1,267

 

Discontinued operations

 

 

 

 

 

7

 

 

 

 

 

 

300

 

Anticipated SEC settlement

 

 

 

 

 

2,000

 

 

 

 

 

 

2,000

 

Adjusted EBITDA

 

$

3,937

 

 

$

4,140

 

 

$

10,227

 

 

$

13,627

 


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