Gaia(GAIA) - 2024 Q1 - Quarterly Results

Executive Summary & Q1 2024 Highlights This section provides an overview of Gaia, Inc.'s strong Q1 2024 performance, highlighting improved marketing efficiency, significant member growth, and positive cash flow achievements Q1 2024 Performance Overview Gaia, Inc. reported strong Q1 2024 results, demonstrating improved marketing efficiency, significant member growth, and positive cash flow. The company saw a 10% decrease in customer acquisition costs, doubled net member additions, and achieved its fourth consecutive quarter of positive free cash flow - Customer acquisition costs decreased by 10% in Q1 2024[2] - Net member addition doubled to 33,000 in Q1 2024, up from 16,000 in Q4 2023, reaching a total of 839,000 members[2] - Re-branded premium membership tier from Events+ to Gaia+, achieving the highest one-month increase in premium members since its launch in October 2019[2] - Deferred revenue on the balance sheet increased by $2.0 million during the quarter due to increased focus on direct-to-paid campaigns, annual memberships, and the new Gaia+ tier[2] Q1 2024 Key Financial & Operational Highlights (in thousands) | Metric | Q1 2024 | Q1 2023 | Change (YoY) | | :-------------------------------- | :---------- | :---------- | :----------- | | Revenues | $21,700 | $19,600 | +11% | | Operating Cash Flows | $5,900 | $700 | +$5,200 | | Free Cash Flow | $1,000 | $(600) | +$1,600 | | Net Loss | $(1,000) | $(1,300) | Improved | | Loss Per Share | $(0.05) | $(0.06) | Improved | | Member Count | 839,000 | 766,500 | +9% | | Gross Profit | $18,500 | $16,900 | +$1,600 | - Cash balance as of March 31, 2024, grew to $8.6 million, with an unused $10 million line of credit[4] - Achieved the highest single quarter of membership growth since Q1 2021[4] Company Information This section details Gaia's mission, content offerings, investor communication channels, forward-looking statement disclaimers, non-GAAP measure definitions, and contact information About Gaia Gaia is a global, member-supported video streaming service and community specializing in conscious media. It offers a vast library of exclusive content across four primary channels in multiple languages to members in 185 countries, accessible on various platforms - Gaia is a member-supported global video streaming service and community[6] - Produces and curates conscious media through four primary channels: Seeking Truth, Transformation, Alternative Healing, and Yoga[6] - Content is available in four languages (English, Spanish, French, German) to members in 185 countries[6] - Library includes over 10,000 titles, with over 88% exclusive to Gaia, and approximately 75% of viewership from content produced or owned by Gaia[6] Conference Call Details This section provides the schedule and access information for Gaia's First Quarter 2024 financial results conference call and its subsequent telephonic replay - The conference call was held on Monday, May 6, 2024, at 4:30 p.m. Eastern time[5] - Dial-in numbers: Toll-free 1-877-269-7751, International 1-201-389-0908, Conference ID: 13746134[5] - A telephonic replay was available after 7:30 p.m. Eastern time on the same day through May 27, 2024, with replay ID 13746134[6] Forward-Looking Statements This section serves as a cautionary statement, indicating that the press release contains forward-looking statements subject to various risks and uncertainties. Actual results may differ materially from projections due to factors outlined in SEC filings, and the company undertakes no obligation to update these statements - The press release contains forward-looking statements that involve risks and uncertainties[7] - Actual results could differ materially due to factors such as the ability to attract and retain members, competition, service disruptions, general economic conditions, and other risks detailed in SEC filings (e.g., Form 10-K)[7][8] - The company undertakes no obligation to update any forward-looking information[8] Non-GAAP Measures This section defines Free Cash Flow as a non-GAAP financial measure, explaining its calculation and its utility for management and investors in assessing performance. It also cautions that this measure should not be considered a substitute for GAAP results and may not be comparable to similarly titled measures from other companies - Free Cash Flow is a non-GAAP financial measure[9] - Free Cash Flow is calculated as net cash provided by operating activities, adjusted for interest payments, and less capital expenditures[9] - Non-GAAP measures are used by management and investors to assess performance but should not substitute GAAP results and may not be comparable to other companies' calculations[9] Contact Information This section provides the contact details for Gaia's Chief Financial Officer and its Investor Relations firm for inquiries - Company Contact: Ned Preston, Chief Financial Officer, Gaia, Inc. (Investors@gaia.com)[10] - Investor Relations: Gateway Group, Inc., Cody Slach ((949) 574-3860, GAIA@gateway-grp.com)[10] Financial Statements This section presents Gaia's condensed consolidated balance sheets, statements of operations, cash flows, and free cash flow reconciliation for the reported periods Condensed Consolidated Balance Sheets The balance sheet shows an increase in total assets and liabilities from December 31, 2023, to March 31, 2024, driven by higher cash, restricted cash, and deferred revenue, while total equity slightly decreased Condensed Consolidated Balance Sheet Highlights (in thousands) | Item | March 31, 2024 | December 31, 2023 | Change | | :-------------------------------- | :------------- | :---------------- | :----- | | Total assets | $133,842 | $130,273 | +$3,569 | | Cash and cash equivalents | $8,599 | $7,766 | +$833 | | Restricted Cash | $4,000 | — | +$4,000 | | Total current assets | $21,460 | $16,083 | +$5,377 | | Deferred revenue | $17,815 | $15,861 | +$1,954 | | Total liabilities | $47,684 | $43,493 | +$4,191 | | Total equity | $86,158 | $86,780 | - $622 | Condensed Consolidated Statements of Operations For Q1 2024, Gaia reported an 11% increase in revenues year-over-year, leading to an improved net loss and loss per share, despite a slight decrease in gross margin. Operating expenses also increased Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Item | Q1 2024 | Q1 2023 | Change (YoY) | | :-------------------------------- | :---------- | :---------- | :----------- | | Revenues, net | $21,693 | $19,647 | +$2,046 (11%) | | Cost of revenues | $3,168 | $2,773 | +$395 | | Gross profit | $18,525 | $16,874 | +$1,651 | | Gross margin | 85.4% | 85.9% | -0.5 pp | | Total operating expenses | $19,388 | $17,896 | +$1,492 | | Loss from operations | $(863) | $(1,022) | Improved by $159 | | Net loss attributable to common shareholders | $(1,045) | $(1,306) | Improved by $261 | | Loss per share (Basic & Diluted) | $(0.05) | $(0.06) | Improved by $0.01 | Condensed Consolidated Statement of Cash Flows Gaia experienced a significant improvement in net cash provided by operating activities in Q1 2024 compared to the prior year, contributing to a positive net change in cash, cash equivalents, and restricted cash Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Item | Q1 2024 | Q1 2023 | Change (YoY) | | :-------------------------------- | :---------- | :---------- | :----------- | | Net cash provided by operating activities | $5,936 | $686 | +$5,250 | | Net cash used in investing activities | $(1,073) | $(1,418) | Improved by $345 | | Net cash (used in) provided by financing activities | $(30) | $18 | -$48 | | Net change in cash, cash equivalents, and restricted cash | $4,833 | $(714) | +$5,547 | Free Cash Flow Reconciliation The reconciliation demonstrates Gaia's positive Free Cash Flow of $971 thousand in Q1 2024, a substantial improvement from a negative Free Cash Flow in the prior year, reflecting strong operational cash generation despite an increase in restricted cash Free Cash Flow Reconciliation (in thousands) | Item | Q1 2024 | Q1 2023 | | :-------------------------------- | :---------- | :---------- | | Net cash provided by operating activities | $5,936 | $686 | | Cash paid for interest | $108 | $125 | | Net cash used in investing activities | $(1,073) | $(1,418) | | Restricted cash | $(4,000) | — | | Free Cash Flow | $971 | $(607) |