Gaia, Inc. (NASDAQ:GAIA) Q2 2025 Earnings Call Transcript

Gaia, Inc. (NASDAQ:GAIA) Q2 2025 Earnings Call Transcript August 11, 2025

Gaia, Inc. beats earnings expectations. Reported EPS is $-0.07, expectations were $-0.08.

Operator: Good afternoon. Welcome to Gaia’s Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Joining us today from Gaia are Jirka Rysavy, Executive Chairman; Kiersten Medvedich, CEO; and Ned Preston, CFO. After the speaker’s presentation, there will be a question-and-answer session. Before we begin, Gaia’s management team would like to remind everyone that management’s prepared remarks contain forward- looking statements, and management may make additional forward-looking statements in response to your questions, included, but not limited to, statements of expectations, future events or future financial performance. These statements do not guarantee future performance, and therefore, undue reliance should not be placed upon them.

Although we believe these expectations are reasonable, Gaia management undertakes no obligation to revise any statements to reflect changes that occur after this call. Actual events or results could differ materially. These statements are based on current expectations of the company’s management and involve inherent risks and uncertainties, including those identified in the Risk Factors section of Gaia’s latest annual report on Form 10-K filed with the SEC. All non-GAAP financial measures referenced in today’s call are reconciled in the company’s earnings press release to the most directly comparable GAAP measure. This call also contains time-sensitive information that is accurate only as of the time and date of this broadcast, August 11, 2025.

Finally, I would like to remind everyone that this conference call is being webcast and a recording will be made available for replay on Gaia’s Investor Relations website at ir.gaia.com. At this time, I would like to turn the call over to Gaia’s Chairman, Jirka Rysavy. Please go ahead.

Jirka Rysavy: Good afternoon, everyone. So revenue for the quarter increased 12% and gross profit 16%. Gross margin improved 220 basis points to 86.7% from 84.5% at the year-ago quarter. Our member count grew to 878,000 and we are focusing now on high lifetime value members. Our annualized gross profit per employee increased to $814,000 from $695,000 in the year ago quarter. Our subsidiary, Igniton, raised $6 million recently at $106 million post-money valuation, valuing Gaia 2/3 ownership interest in Igniton at $70 million, 2.5x increase from previous $28 million. Some Igniton products, you can now — is also now available at Gaia Marketplace. And if you want more information, you can get it at igniton.com. And I would call — I will turn the call over to our CEO, Kiersten.

Kiersten Medvedich: Good afternoon, everyone. As we begin today’s call, I want to honor this moment of transition. This is my first time speaking to you as CEO of Gaia, and let me begin by affirming our strategy is not changing. I am fully aligned with the path we’ve been walking, a strategy rooted in mission, discipline and the long view. We are building on a foundation of purpose and deep intention, and we remain committed to moving forward with consistency and focus. Our core streaming business remains the heart of Gaia. It is strong, resilient and continues to grow over time. We are focused on scaling it sustainably by improving retention and deepening member engagement. With 90% of our content exclusive to Gaia, we offer something no other platform can, an intentional, curated experience that goes beyond content and into personal transformation and connection.

And we’re seeing the results. So let’s talk about that. In Q2, we carried our momentum from Q1 into a strong quarter, delivering double-digit revenue growth and exceeding our expectations by $300,000. The key drivers of that performance were growth in both member count and ARPU as well as the launch of our Igniton brand, which saw an enthusiastic response following its debut at the Biohacking Conference in May. This success reinforces something we’ve long believed that those seeking to optimize their fiscal performance are often on the same path as those seeking to expand their consciousness. We also more than doubled our free cash flow quarter-over-quarter, reaching $1.6 million in Q2, up from $700,000 in the prior quarter. Annualized gross profit per employee increased to $814,000, up from $695,000 in the prior year quarter.

This is a clear reflection of the efficiency and scalability of our model. But even more so, it is a testament to the focus and dedication of our amazing team. Our people are the heart and soul of this company and their ability to deliver excellence while staying aligned with our mission is what makes results like this possible. And as we look ahead, we see a profound culture shift emerging. More and more people are turning inward, seeking purpose, connection and growth. On many of the AI platforms, questions about consciousness, meaning and awakening now rank among the most frequently asked topics. That is a global signal, and it’s one Gaia is uniquely prepared to meet. So right now, we’re currently planning the next phase of our platform, a foundation for a global conscious community.

We are listening to what people want and they want deeper connections and shared experiences, whether it be face-to-face or across the globe, the desire is the same. People want to connect. And we’re creating a beautiful space for that. Our plan is to build a community around the very topics our content explores, offering members a place not just a watch, but to engage and grow together. We’re designing it with the same care and intentionality that defines our content, and we believe it will become a meaningful advantage in how we serve our global member base. Our plan is to launch within the next year. While from the outside, this may look like the next evolution, but it’s really a return to Gaia’s deeper purpose, a purpose not just to inform but to connect.

So in parallel, we’re making progress on Gaia’s Conscious AI Companion. We believe this will become a beautiful bridge between our exclusive content and the personal journeys of our members. Our AI companion will be sourced primarily from Gaia’s original content. This allows us to offer something rare, guidance that is deeply aligned with our brand and rooted in the wisdom our members have come to love and trust. Lastly, and most importantly, our focus remains centered on long-term sustainable growth, driven by our core SVOD business and our global member community. Gaia is built for scale with a high-margin model, exclusive content and a brand that continues to earn trust and engagement. We are staying true to our North Star while remaining agile enough to capture revenue opportunities along the way.

So it is so exciting. The world is actually catching up with us. Last year, the word manifest was named Word of the Year by the Cambridge Dictionary and that is more than a headline. It is a cultural signal and Gaia is ready to meet that moment because we’ve been preparing for it from the very, very beginning. Thank you all for being here and being part of this vision. Now over to Ned for financial details.

Ned Preston: Thanks, Kiersten. For the second quarter of 2025, Gaia delivered revenue of $24.6 million, up $2.7 million or 12% year-over-year, driven by growth in both member count and ARPU as well as the launch of Igniton. Total members increased in Q2 to $878,000. Gross profit increased 16% to $21.3 million from $18.5 million in Q2 of 2024 with gross margin expanding to 86.7%, up from 84.5%. Net loss was negative $1.8 million or $0.07 per share versus negative $2.2 million or negative $0.09 per share in Q2 of 2024. Operating cash flow was $2.3 million with free cash flow of $1.6 million, reflecting ongoing operational discipline. Our cash balance at the end of June 30, 2025, was $13.9 million with a fully available $10 million line of credit.

In July, Gaia also renewed its credit line for an additional 3 years with improved terms, including a lower interest rate and a wider range of permitted use. We continue to manage costs carefully and maintain healthy margins while investing in the strategic areas that will create long- term value for our shareholders. As mentioned earlier and as further outlined in Gaia’s 10-Q, our subsidiary, Igniton, raised $6 million of private common equity financing in the month of July, which included $2 million from Gaia. Igniton’s implied post-money valuation is now $106 million, up from an implied post-money valuation of $40 million from last year’s raise. The proceeds from the financing will be used by Igniton for product launch, general operating expenses and certain capital expenditures to support future growth.

Gaia now owns approximately 2/3 of Igniton equity. More information about Igniton can be found at www.igniton.com, and Gaia members can purchase Igniton products at a discount through Gaia’s Marketplace. I will now turn the call back over to Jirka.

Jirka Rysavy: Yes, just for the summary, we expect, obviously, continuing growth of our revenue and ARPU as well, increasing gross profit per employee as we have pretty good results for this last year and also, obviously, continued generation of positive free cash flow. And this concludes our remarks. So I’d like to open it to questions. So please, operator.

Q&A Session

Operator: [Operator Instructions] And our first question comes from Mark Argento with Lake Street.

Mark Nicholas Argento: So nice to hear from you on the call. Just wanted — yes, I just wanted — maybe if you could just provide a little bit of your background and kind of your main focus here over the next 3 to 6 months in terms of kind of key priorities.

Kiersten Medvedich: Sure. So my background is in content. I was at Sony for 15 years, and I came on to Gaia to run the content team about 9 years ago and somehow worked my way up to where I am today as CEO. And my focus going forward for the next 6 months is in three areas. One is early tenure engagement which consists of specifically 3 to 6 — 0 to 3 months, which will consist of product improvements, better marketing targeting, which means basically fishing in new ponds, and then also increase content publishing. And then the other two areas, as I talked about, were investments in our AI and investment in our community.

Mark Nicholas Argento: Got it. In terms of AI, are you thinking about using AI more as a tool for a better user experience? Or would you guys get into the — having an AI user interface that the community or other customers can engage with?

Kiersten Medvedich: We’re looking at both. One, from using AI to get better member learnings and to become smarter and delivering our members a better experience from a content perspective. And then the other is an AI companion right now that we’re in the process of tweaking. And we feel that, that’s definitely going to deliver meaningful value to our members.

Mark Nicholas Argento: Got it. So you — I think in the press release, you guys talked about potentially taking pricing in Q1. What — do you plan when you take price, are you guys going to expand additional content? Or what’s the value prop going to be there for the consumer?

Ned Preston: Mark, this is Ned, and I’ll take that one. Yes. So as we’ve discussed in the past, we are still looking to raise prices in March of 2026. At that time, we do foresee that our AI solution will be progressing and so we’ll be adding value to retention and other marketing activities. But the customer experience by then will also start seeing some of those benefits as well as some new content. So the premise around the price increase in March of ’26 will have added value for our customers, and then they will continue to see added value throughout the rest of 2026 as things like our community and other elements come to bear.

Mark Nicholas Argento: That’s helpful. And then last question from me on Igniton. Obviously, raised some additional capital there. Can you provide us any updates in terms of how you’re thinking about the go-to-market or any new updates on that side of the house?

Jirka Rysavy: Yes, we introduced the product in the last few days of May. In Austin, there was a Biohacking Conference, it was one of the largest one in this field. The response was absolutely stunning. There was a line on our booth basically through hall conference about 50, 200 yards. So they never saw anything like that. We sold all the products we brought by far, taking a lot of back orders, which we now filled. And — so because of that, we kind of decided to actually raise some money. So we took — we just did that at least the first part of it. And we just introduced it. Recently, we put it also in Gaia Marketplace, so you can get someone in the Gaia Marketplace starting now. And we plan to use some of this money raised for bigger launch because of the response, and we expect that to be after Labor Day.

Mark Nicholas Argento: And do you anticipate doing any kind of partnership deals using the technology or will you guys — will it be all branded under your own brand?

Jirka Rysavy: Yes. We would, not this year, but I would kind of say we might — we probably would — we have a lot of order requests existing from existing brands, can we enhance the product, because Igniton technology can increase efficiency pretty much all the molecules would have any trace of water. So all organic molecules. So we would focus on hydrogen, and so we probably would — might license — improve some product with some upfront license fee and then the regular margin on selling the product, but we would obviously always have a license fee first. So — but we don’t expect to do any of that this year.

Operator: Our next question comes from George Kelly with ROTH Capital Partners.

George Arthur Kelly: First, just a follow-up on one of the prior questions. How much pricing do you expect to take in March?

Ned Preston: Yes. So similar to what we did last time, George, it was $2 on monthly, and we’ll take a look at the annual increase as well. So it will be in that mid- to high teens area.

Jirka Rysavy: It not necessarily will be in all countries because some countries are opt in, opt out. So it depends that we would — that doesn’t mean we would raise pricing on all our customers, but it would be probably in 80-plus percent.

George Arthur Kelly: Okay. And then a couple more questions on Igniton. Can you help us at all understand the sort of revenue opportunity maybe that you’ve seen coming out of the Biohacking Conference and just your expectations for the back half of the year? I don’t — not to get too specific on guidance or anything, but how much could this sort of help lift the overall business just as you look out in the next few quarters?

Jirka Rysavy: Well, we don’t really — it’s — we kind of focus on the launch, which will be like after Labor Day. So that would be probably better to ask questions because we only so far did the Biohacking Conference where you’ve been there, so you know how — the success what we have. So it’s — the bottle — it’s $200 per bottle. And we had — all the feedback was positive. There was no issues on that. So we’re establishing distributorship. Obviously, we have distributors in some countries, but we have to get it approved some of the countries. But I think it’s kind of hard to say because we don’t really have any experience. So we’re focused right now on from what we shipped so far because we’re getting order now was kind of to finalize the packaging not the bottles, but the boxes, how we ship — how we charge the distributors and all that stuff.

And I can — probably on the third quarter call, I can answer that question. But we basically — we get something budgeted in the third quarter because we thought we’re going to launch it in July. But then when we did introduction and we get a meaningful sales, so they will give us probably $250,000 more than we expected in second quarter. But then in the third quarter, we didn’t launch it in July. So we basically postponed our second quarter revenue until like March, so we’ll probably offset what we kind of generated in the second, we will not generate in third. And otherwise, it’s — the fourth quarter, there might be some upside, but we don’t really know yet until we launch it. But since it was so successful, our launch probably will be bigger than we originally planned, but not probably right in Labor Day, we start slow, and we probably will push it before Christmas.

George Arthur Kelly: Okay. Understood. That’s helpful. And then just on the launch, you mentioned the Labor Day sort of official launch. Can you detail…

Jirka Rysavy: No, it won’t be Labor Day. It will be probably somewhere in like second week of September.

George Arthur Kelly: Can you detail what that launch is going to look like though? What’s the marketing plan?

Jirka Rysavy: We don’t really know yet because the success what we have and now the original and extra funding, we’re looking some stuff, what we didn’t look before. So we would not have the finalized still probably next 3 weeks.

Ned Preston: George, this is Ned. And just real quick, as you probably picked up on some of our commentary, I would consider a very soft launch back at the end of May Biohacking Conference. And then as of the end of last week, the site has changed. It’s been updated. Any customer can go in and buy off of our igniton.com website. And then Gaia members are now able to also purchase off of our Gaia Marketplace at a slightly discounted rate. So the larger launch that you’re talking about will be in the September time frame, but I did want to point out that we have officially launched out and are seeing an uptick.

George Arthur Kelly: Okay. And then last one for me, just a modeling question. G&A in the quarter stepped up a little bit. Was there anything kind of onetime? Maybe, it was the Biohacking conference. Is there anything else? And can you quantify that, if there was?

Ned Preston: Yes, it definitely wasn’t people-related. G&A was up for things onetime items, like the Biohacking Conference and a couple of other things that will come back into shape in future quarters. It wasn’t fixed, it was a onetime event.

Operator: [Operator Instructions] And our next question comes from James Sidoti with Sidoti & Company.

James Philip Sidoti: Can you give us a sense on how you’re going to spend the $6 million you raised for Igniton? Is that to build capacity to build sales and marketing? Where is that money going to go?

Jirka Rysavy: We don’t really — in the capacity, we already spent the money before. We are kind of getting one more unit to boost the production. However, we don’t need it from any other production. However, the success was so surprising that we’d rather be kind of ready, but I think we would not really see that until we push it somewhere around Christmas. So it’s — now the capacity by far exceeds what we can sell.

James Philip Sidoti: Okay. All right. And then in terms of the base business, you grew revenue by 10% in the March quarter, about 12% in the June quarter. I think in the past, you said you expect to grow revenue about 12% for the year. Do you still feel like you’re on track to hit that?

Ned Preston: Yes. Jim, it’s Ned. Yes, that absolutely is our expectation is that 12% for the year. As we said earlier, it was a great performance across all of our core business in the quarter. So firing on all cylinders regarding our core SVOD business and then a little bit of upside from Igniton, but I can’t emphasize enough the big reason for our accelerating growth is because of the increasing ARPU and adding another 10-plus thousand net members.

James Philip Sidoti: Okay. And then last one, can you talk a little bit about how Marketplace is going? I know you kind of changed some of the travel destinations because of some of the world events so far this year. How is that going? Are there other products or services that you started to launch to Marketplace in 2025?

Jirka Rysavy: I would just want to kind of say that we see Marketplace as a part of community, and I will get Kiersten answer the question.

Kiersten Medvedich: That’s exactly what I was going to say. Our Marketplace continues to be a strong foundation for community building, which has always been its core purpose. I think James mentioned on the call earlier this year that we had a pivot away from Egypt, which led us to introduce trips to Peru instead. The spring crew trip quickly sold out and our fall crew trip is already at capacity as well. So we’re seeing a strong demand for where we’ve made adjustments. So — and as far as new products, you will see new products slowly come on, but just to reiterate, it has always been the foundation of community.

Jirka Rysavy: The Marketplace goal is not to chase the revenue. Marketplace is becoming one of the aspects of community. So this is not something to chase revenue with.

James Philip Sidoti: So the goal is really to help build that subscriber base and retain subscribers?

Jirka Rysavy: Well, yes, subscribers is another point of touch point with our members. And they — as we build community, obviously, they can — the community what forms around the topic of geographically can go together on these trips. That’s one of the ideas.

Operator: And at this time, this concludes our question-and-answer session. I’d now like to turn the call back over to Mr. Rysavy for his closing remarks.

Jirka Rysavy: Well, thank you, everyone, for joining, and we look forward to speaking with you when we report our third Q, which will be in early November. Thank you very much.

Operator: Thank you for joining us today for Gaia’s Second Quarter 2025 Earnings Conference Call. You may now disconnect, and have a great day.