Gaia, Inc. (NASDAQ: GAIA), a conscious media and
community company, reported financial results for the second
quarter ended June 30, 2024.
Highlights:
- Revenue growth of 11% and member growth of 10% from the
year-ago quarter.
- Operating cash flows for the first half of 2024 improved by
$2.6 million and free cash flow improved by $2.0 million from the
same period in 2023.
- Gaia subsidiary completed transactions raising $12
million.
“During the second quarter, which is our seasonally slowest, we
grew revenue 11% and members 10% year over year, while delivering
positive free cash flow. We expect the positive cash flow
generation to continue with revenue growth increasing to about 15%
in the fourth quarter,” said Jirka Rysavy, Gaia’s Executive
Chairman. “In 2016 we invested $10 million and recently raised $12
million for our subsidiary Igniton from outside investors, a
portion of which was used to acquire an exclusive worldwide license
for the Igniton health technology. This technology uses
concentrated quasi-particles transmitted by the sun to improve
cognition, memory and longevity.”
Gaia CEO James Colquhoun commented: "We continued our trend of
executing on cash flow positive growth with notable improvements in
marketing efficiency. Today, we are also excited to officially
announce the launch of the Gaia Marketplace to our entire member
base. This initiative not only strengthens our community engagement
but also introduces an alternative revenue stream to the Gaia
business. Additionally, we have also implemented a price increase
for new members, starting in July, which we expect to positively
impact our revenue by the end of the year. The timing was moved
from Q2 to Q3 to strategically align with our third-party partners,
ensuring minimal disruption to our members, which resulted in a
slight impact on our second quarter revenue."
Gaia CFO Ned Preston commented: “Operating cash flows for the
first six months finished at $3.9 million, representing a $2.6
million improvement from the first six months of 2023 and continues
the momentum we've delivered in the prior four quarters. During the
second quarter, we incurred meaningful amounts of non-recurring
expenses related to Igniton and corporate administrative expenses.
We expect our ARPU to grow more rapidly with our price increases
and the launch of Gaia Marketplace during the second half of
2024.”
Second Quarter 2024 Financial
ResultsRevenues for the second quarter grew $2.24 million
or 11% to $22.08 million from $19.84 million in the year-ago
quarter. Member count increased to 850,000 as of June 30, 2024, up
from 774,500 or 10% from June 30, 2023.
Gross profit in the second quarter increased 10% to $18.7
million from $17.0 million in the year-ago quarter. Including the
non-recurring expenses, net loss was $(2.2) million, or $(0.09) per
share, unchanged from the year-ago quarter, and free cash flow was
$0.7 million, representing a fifth consecutive quarter of positive
cash flow.
In the last six months both revenue and member growth were
stable at over 10%, with an improvement in free cash flow of $2.0
million on top of the $8.4 million improvement delivered during
2023.
Conference Call
Date: Monday, August 5, 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: 13747669
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 August 19,
2024.
Toll-free replay number: 1-844-512-2921International replay
number: 1-412-317-6671Replay ID: 13747669
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, adjusted for
interest payments, and less capital expenditures. 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) 574-3860 GAIA@gateway-grp.com
|
GAIA, INC.Condensed Consolidated
Balance Sheets |
|
|
|
|
June 30, |
|
|
December 31, |
|
|
(in thousands, except share and per share
data) |
|
2024 |
|
|
2023 |
|
| |
|
(unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
5,459 |
|
|
$ |
7,766 |
|
|
Accounts receivable |
|
|
4,806 |
|
|
|
4,111 |
|
|
Other receivables |
|
|
2,903 |
|
|
|
2,191 |
|
|
Prepaid expenses and other current assets |
|
|
2,468 |
|
|
|
2,015 |
|
|
Total current assets |
|
|
15,636 |
|
|
|
16,083 |
|
| Media library, net |
|
|
39,125 |
|
|
|
40,125 |
|
| Operating right-of-use asset,
net |
|
|
5,875 |
|
|
|
6,288 |
|
| Property and equipment, net |
|
|
25,282 |
|
|
|
26,303 |
|
| Equity method investment |
|
|
— |
|
|
|
6,374 |
|
| Technology license, net |
|
|
15,954 |
|
|
|
— |
|
| Investments and other assets,
net |
|
|
8,301 |
|
|
|
3,157 |
|
| Goodwill |
|
|
31,943 |
|
|
|
31,943 |
|
|
Total assets |
|
$ |
142,116 |
|
|
$ |
130,273 |
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
14,132 |
|
|
$ |
12,038 |
|
|
Accrued and other liabilities |
|
|
1,957 |
|
|
|
2,599 |
|
|
Long-term debt, current portion |
|
|
158 |
|
|
|
155 |
|
|
Operating lease liability, current portion |
|
|
809 |
|
|
|
780 |
|
|
Deferred revenue |
|
|
17,737 |
|
|
|
15,861 |
|
|
Total current liabilities |
|
|
34,793 |
|
|
|
31,433 |
|
| Long-term debt, net of current
portion |
|
|
5,721 |
|
|
|
5,801 |
|
| Operating lease liability, net of
current portion |
|
|
5,296 |
|
|
|
5,708 |
|
| Deferred taxes, net |
|
|
551 |
|
|
|
551 |
|
|
Total liabilities |
|
|
46,361 |
|
|
|
43,493 |
|
| Commitments and
Contingencies |
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
|
|
Class A common stock, $0.0001 par value, 150,000,000
shares authorized, 18,046,018 and 17,813,179
shares issued, 17,981,031 and 17,748,374 shares outstanding at
June 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 June 30, 2024 and December 31, 2023,
respectively |
|
|
1 |
|
|
|
1 |
|
|
Additional paid-in capital |
|
|
170,562 |
|
|
|
170,695 |
|
|
Accumulated deficit |
|
|
(88,433 |
) |
|
|
(85,195 |
) |
|
Total Gaia, Inc. shareholders’ equity |
|
|
82,132 |
|
|
|
85,503 |
|
|
Noncontrolling interests |
|
|
13,623 |
|
|
|
1,277 |
|
|
Total equity |
|
|
95,755 |
|
|
|
86,780 |
|
|
Total liabilities and equity |
|
$ |
142,116 |
|
|
$ |
130,273 |
|
|
GAIA, INC.Condensed Consolidated
Statements of Operations (unaudited) |
|
| |
|
For the Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
| (in thousands,
except per share data) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
|
|
|
|
|
|
Revenues, net |
|
$ |
22,081 |
|
|
$ |
19,839 |
|
|
$ |
43,774 |
|
|
$ |
39,486 |
|
| Cost of revenues |
|
|
3,415 |
|
|
|
2,839 |
|
|
|
6,583 |
|
|
|
5,612 |
|
| Gross profit |
|
|
18,666 |
|
|
|
17,000 |
|
|
|
37,191 |
|
|
|
33,874 |
|
| Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and operating |
|
|
18,697 |
|
|
|
17,085 |
|
|
|
36,456 |
|
|
|
33,208 |
|
|
Corporate, general and administration |
|
|
1,988 |
|
|
|
1,520 |
|
|
|
3,617 |
|
|
|
3,293 |
|
| Total operating expenses |
|
|
20,685 |
|
|
|
18,605 |
|
|
|
40,073 |
|
|
|
36,501 |
|
| Loss from operations |
|
|
(2,019 |
) |
|
|
(1,605 |
) |
|
|
(2,882 |
) |
|
|
(2,627 |
) |
| Equity method investment
loss |
|
|
— |
|
|
|
(125 |
) |
|
|
— |
|
|
|
(250 |
) |
| Interest and other expense,
net |
|
|
(144 |
) |
|
|
(113 |
) |
|
|
(252 |
) |
|
|
(234 |
) |
| Loss before income taxes |
|
|
(2,163 |
) |
|
|
(1,843 |
) |
|
|
(3,134 |
) |
|
|
(3,111 |
) |
| Provision for income taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Net loss |
|
|
(2,163 |
) |
|
|
(1,843 |
) |
|
|
(3,134 |
) |
|
|
(3,111 |
) |
| Net income attributable to
noncontrolling interests |
|
|
30 |
|
|
|
45 |
|
|
|
104 |
|
|
|
83 |
|
| Net loss attributable to common
shareholders |
|
$ |
(2,193 |
) |
|
$ |
(1,888 |
) |
|
$ |
(3,238 |
) |
|
$ |
(3,194 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations (attributable to common shareholders) |
|
$ |
(0.09 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.15 |
) |
| Basic and Diluted loss per
share |
|
$ |
(0.09 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.15 |
) |
| Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
23,372 |
|
|
|
20,874 |
|
|
|
23,267 |
|
|
|
20,850 |
|
|
Diluted |
|
|
23,372 |
|
|
|
20,874 |
|
|
|
23,267 |
|
|
|
20,850 |
|
| GAIA,
INC.Condensed Consolidated Statement of Cash Flows
(unaudited) |
|
|
|
|
For the Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
| (in
thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
|
|
| Net cash provided by (used
in): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities |
|
|
(2,081 |
) |
|
|
584 |
|
|
|
3,855 |
|
|
|
1,270 |
|
|
Net cash used in investing activities |
|
|
(11,447 |
) |
|
|
(491 |
) |
|
|
(12,520 |
) |
|
|
(1,909 |
) |
|
Net cash provided by (used in) financing activities |
|
|
6,388 |
|
|
|
(62 |
) |
|
|
6,358 |
|
|
|
(44 |
) |
| Net change in cash, cash
equivalents, and restricted cash |
|
$ |
(7,140 |
) |
|
$ |
31 |
|
|
$ |
(2,307 |
) |
|
$ |
(683 |
) |
|
Reconciliation of Net Cash Provided by Operating Activities
to Free Cash Flow (unaudited) |
|
| |
|
For the Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
| (in
thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
| |
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities |
|
$ |
(2,081 |
) |
|
$ |
584 |
|
|
$ |
3,855 |
|
|
$ |
1,270 |
|
| Cash paid for interest |
|
|
154 |
|
|
|
128 |
|
|
|
262 |
|
|
|
253 |
|
| Net cash used in investing
activities |
|
|
(11,447 |
) |
|
|
(491 |
) |
|
|
(12,520 |
) |
|
|
(1,909 |
) |
| Purchase of technology
license |
|
|
10,000 |
|
|
|
— |
|
|
|
10,000 |
|
|
|
— |
|
| Adjustment from investment held
in restricted cash |
|
|
4,035 |
|
|
|
|
|
|
4,035 |
|
|
|
|
| Restricted cash |
|
|
— |
|
|
|
— |
|
|
|
(4,000 |
) |
|
|
— |
|
| Free cash flow |
|
$ |
661 |
|
|
$ |
221 |
|
|
$ |
1,632 |
|
|
$ |
(386 |
) |
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