GAIA - Earnings call transcript Q3 2017

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Operator

Good afternoon, everyone, and thank you for participating in today’s conference call to discuss Gaia, Inc.’s Financial Results for the Third Quarter Ended September 30th, 2017. Today, joining us are Gaia’s CEO, Jirka Rysavy; and CFO, Paul Tarell.

Following some prepared remarks we will open the call for your questions.

Before we get started however, I would like to take a minute to read the Safe Harbor language. The following constitutes the Safe Harbor statement of the Private Securities Litigation Reform Act of 1995. of general the assumptions today and as with XX-Q. but of limited filings on information, risks and in Securities and forward-looking Form uncertainties, company’s reports and historic of not numerous integration involve well to, Exchange for matters XX-K and uncertainties new development competition are other discussed statements including, acquisitions, Except Form from timely detailed business, time-to-time conditions, the and business impact as the our Commission, risks including no obligation statements. assumes to Gaia revise publicly any update forward-looking or turn With Rysavy. that, I the would call to now Jirka like CEO, to Gaia’s over Please go ahead.

Jirka Rysavy

Thank you, everyone. Cathleen, to good and afternoon

to end third margin of of our points last at subscriber XX% XXX a the XXX,XXX and quarter basis gain increased So X,XXX XX% results, quarter Q growth count, subscriber end ahead of quarter the sequentially from expectations ended XXXX, basis Paid of guidance. target. same XXX in the third which was in the $X.X XX% The from increased Revenue to to XXX XX% Gross the streaming third the increased point point ago, million and at from XX%. quarter our million at and year. grew of from ahead XXX,XXX including grew our of XX% basis second again, year quarter $X.X point revenue basis XX.X%. subscribers

or our growth maintained below have in We loss, even gain quarter. with investment kept and faster the discipline plan the subscriber our

flat, talk in net And another to overall performance. quarter. search Paul for also and leverage results. remained the our optimization the each sequential will engine drove, and subscriber personalized acquisition helped loss again, more now reduce – which for about Q increased experience Our our Customer of

Paul Tarell

just year-ago Streaming points to continued Jirka $X.X results. third the million subscriber strong Thanks, quarter million ago XX.X% compared margin XX% the the growth increased to year quarter $X in QX Gross the the in XX.X% Jumping quarter. last right into in mentioned. due quarter quarter basis to $X.X XX% in compared our to increased revenues Gross profit million to Jirka. to from XXX to year. the third increased

from quarter $XX million came particularly subscriber revenue costs efforts, It’s respectively. and and considering streaming subscriber X,XXX XXXX on value, sequential important record basis percentage to lifetime of acquisition from of compared to accelerated increased to XX% the our again, in elect second acquisition XX% in our the in efficient the and sheet. of increased and growth reiterate were expand customer any balance a third second the budgeted the due in that the first declined sequentially costs million leverage Total original operating compared revenue not third do quarters to at million period efficiency our our quarter. benefit in of production despite acquisition This, costs continue the as We relatively our incurred flat under $XX.X and quarter in expenses we on to to the points significant quarter our $X subscribers value spend Customer the XXX% growth. to once year-ago in content. in

compared $X.XX XX% XXXK repurchase in of $X.XX million third quarter the the million business approximately share which the that, offer quarter like cash, I from also per per by of million and the the of the common to $X.X usage operations, on two reflected sale the our debt additional $X.XX our stock previous in like call or campus. $X.X questions. in pretax income of quarter. $XXX.X of reduced we’ll of no tender continuing outstanding XXXX, quarter, acre foot XXX,XXX-square after in with our the quarter, July GAIAM-branded would or I open Jirka $XXX.X in year-ago and now reducing some second or during gain remarks, in that net for by trend We XX to XX% for unencumbered the we to share. at cash improving which, back share Jirka? turn our continued the And consecutive loss ownership With over quarters. the compared loss loss the million highlight to to would Net approximately call was for a million $X.X

Jirka Rysavy

accelerated strengthen as to momentum continues The gross acquisition has business plan. our our below Yes. our subscriber while target we of to cost track continued exceeded customer our

to our content subscribers grew over offering, English X,XXX over now so the our our we we geographical our and grew XXX in During titles, library also expanded quarter, with footprint countries.

titles Gaia expanded launching film XXX we current the now in quarter. are Spanish, have and language, in in over German including this native We

Our million exploring XX additional for Peru some in Nazca, special the discovery last views we mentioned total report on archaeology call received of XX as million. a

this market, our the of the clearly amount of While demonstrate is free for still charge, interested which Discovery, view size we provide in content. of

discussed expect count I the questions. XX% XXX,XXX about Operator, for current paying to growth to from subscriber up XX% rate the would XXX,XXX, end and time, like Cathleen? rate year with bring from and open would our end As growth XXs about XXXX. accelerating that, fourth the of in of And for call to further last to quarter the of the we The keep year.

Operator

hear We’ll from Mark Instructions] Argento with Lake Street [Operator Capital Markets.

Mark Argento

on exceeding congrats strong Nice sub-growth see guys, expectations. the the afternoon Good quarter. to

seeing different continue on of those have premium actually other on offerings acquisition Maybe they that could in touch then you’re also bit favorable. Just little new could little wanted And a lifetime know percentage down that you as channels, drill subscriber I offerings drill the value. any testing you what down been guys acquisition any out? much a or bit costs. or you to how be to if a on you’re you’ve spending rolling

Paul Tarell

take I’ll over hand it Sure. first second question, the the for Jirka question. I’ll and to

so that improvement decent incremental paid those amount. overall our in last from all reduced of Nazca on tailwind free from we views docu saw mentioned the our efforts, Jirka tremendously which social quarter benefited a we sequentially by that So series, CPA marketing our

obviously, Yoga, look in across internally continue Seeking say well of probably under we’ve XX% range and average, that we we closer spend the the As we’re Transformation XX% on and now I’d to we across. set look a lifetime Truth value the channels, blended right when

Jirka Rysavy

at we’re second There’s smaller everybody we and clearly, XX the side, accounts of – part, under the like For in price XX% there’s look when you else. – others – Yoga market, the especially between we well more. XXX% the

But make some it. year under can discussion. potentially yet, decision it do is there’s did what decide nothing still Netflix it to might it, we for relatively affected So But but should but there we kind we so �� quick, something press Also on we more it going features, we on about still probably soon. we do we And right be But room premium, make clearly did a possibility. late we’ll of something upwards? year. next while, kind this of if until opens have offer late talking but obviously, would now. that last didn’t it But wouldn’t do some

Mark Argento

building And in opportunities, still that a I channels. more then of for And opportunity having or content, thoughts terms would exist? been you channels other decent new could have hard so other time But existing guys know okay. the content, obviously, the of on does any finding with areas plenty growing? be it, you of see opportunity, not that the Looks channels, that? your what you’re like timing Got

Jirka Rysavy

We did.

it’s last, And we – a Now launched start we also LTVs called we Transformation. nicely go. our have about what a to increase year we since the as

on clearly response positive So we it. have internally

We have channels we’re testing alternative other is bucket. overall one Expanded right now Transformation is under Consciousness, One healing. two that

be one our but introduce next was of those decision why of So the And the would question? make other we one. likely be two that didn’t any part what we’ll it, will

Paul Tarell

Other channels.

Jirka Rysavy

answer Yes, the saying. Did I question? that’s was miss I what something? I Did

Mark Argento

just fine. That’s was no. wondering. No, I

sounds like side it what there’s rates the but the on small really you’re So opportunity. you penetration this just the on going of to at focus given point have opportunity

Jirka Rysavy

than the – It’s of kind free, of have size updates, year going do to we’re going we it. The we’ll publish is, with Nazca. to for still we’re when the like continue going It’s do to see it thought. to till of some see end Yes. we probably still we’re much obviously, bigger the market

the lot of get expect a there from still uniques, what million-plus. grow would e-mails, and might uniques I now, probably but XX number XX hard We the get to right is it’s And obviously, million now of put the probably or now. XX we right million viewers right it number than more

a huge we now, it go it it need at that. And of of kind to we go as people so kind on to beyond we to have want what it’s we how capitalize go, expected. but definitely we still well clear Right more let of can or can pool look

the So size not is clearly momentum market market issue an here.

find ROI optimum I and out and growth think the more the like stuff that. it’s rates

So indicators. favorable will growing kind of that’s see what we very this obviously, what that see. of get on we now doing, Like, we’re we kind XX%,

we’ll acquisitions. not when to It’s and close see. there’s clearly between of – ROI and more it’s an new farther quarter that’s XX% any see – and for size. find But issue the to there, we’ll next for So growing optimal market of keep a we to investments the issue resistance XX%, to if an where

Mark Argento

Great. Thanks guys and congrats again.

Jirka Rysavy

Thanks, Mark.

Operator

questions additional queue. gentlemen, And we you. in Thank no the have

Jirka Rysavy

thank Well, Okay. you.

joining. Can forward for we we you much. to report you quarter speaking look I’d when very in to So thank like Thank February. our everyone with fourth

Operator

you. today’s all again participation. that again, and gentlemen, for you Thank once your Thank conference. Ladies conclude does

now may disconnect. You

Gaia (GAIA) 6 Nov 172017 Q3 Earnings call transcript