GAIA - Earnings call transcript Q4 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon. And thank you for participating in today’s conference call to discuss Gaia, Inc.’s Financial Results for the Fourth Quarter and Full Year Ended December 31, 2017.

Joining us today 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. Safe of under XXXX. the Litigation Private constitutes Act Reform following Harbor the statement Securities The The that risks involve discussed numerous matters today assumptions, and include uncertainties. forward-looking statements losses, to, These Exchange retention and Commission, Securities on in and uncertainties report business include our not and acquisitions, consumer the limited including risks Form from but conditions, subscriber our are rates, XX-Q. historical XX-K and detailed competition, other costs filings changing preferences, the general and time-to-time with update or publicly any Gaia forward-looking assumes to no revise statements. obligation With would over like turn to to Gaia’s that, now I the CEO, call Jirka Rysavy. ahead. Please go

Jirka Rysavy

you, Thank good and Bethany, afternoon everyone.

basis fourth acceleration to ahead basis of XXX,XXX target, the up XX which our achieving The of for year. increased the quarter margin at and points our basis XX% at grew results XX%. at XXX,XXX is and XX% grew of end Gross the was from XX growth XXX streaming the set subscribers XX% in end Revenue ago revenue same So sequentially quarter increased ended ago. rate points points to the X,XXX increased XX.X%, from XXXX, point months third year. quarter quarter and from rate XXX for year expectations. subscriber last the the XX% growth again from which Paid basis of end our quarter

our acceleration We investment both and the subscriber and our of additional we previous have growth, our our quarter. with maintained below plan again even last kept loss discipline

over-performance. optimization, including again our Our the sophistication search increased personalized increased marketing, using leverage of for of contributed experience organic engine and each to subscriber

let speak quarter sequential our remained to to quarter. more costs helped I result. acquisition Paul? reduce customer the net loss Our which about for another Paul will flat,

Paul Tarell

million Jirka to the in Gross XX% into to streaming our growth increased year the the Streaming continued the highlighted. $X.X $XX.X XX% Jirka. ago year compared $X.X million fourth million. compared In profit quarter quarter. to Jumping $X.X quarter strong revenues ago in due subscriber quarter increased increased just the XXXX, in million XX% to to Thanks, revenues to fourth right results.

basis be media XX.X% As increase higher the subscriber lower increased to investments. service, and XX quarter increased Jirka mentioned, driven fourth our historical gross costs our library to year. to margin and margin by last lower in continued The revenues per including XX.X% streaming leverage deliver in has points on gross from costs

subscriber were to reasons, Total to was gross increased margin points ago same these $X.X XX% $XX.X basis in up full $XX.X For to operating in year XX.X%. to XXXX million XXXX the acquisition and compared million rate of to compared and $XX.X XXX million last all including to to primarily increase these in in of a spending quarter fourth XXXX. quarter of in efficiency marketing annual again of by the previously year fourth expenses launching growth in increased year acquisition was to XX% percentage quarter, increased fourth numbers, the of profit the quarter. in ahead $XX.X our from the that despite growth gross costs million quarter offerings. cost rate due acceleration acquisition our XXXX, XXXX. due language reiterate in the we important efforts, It's on to sequential same customer to the quarter XXXX subscriber our mentioned. year was declined operating in XX% the On XX% foreign our ago XX% the third driven million particularly of expectations continued million expenses growth. drive as as of our dramatic Customer from rate to full a The increased considering increase year-over-year This customer during basis, accelerated $XX growth revenue in subscriber our include quarter expenses

$X.X $XX.X the from despite our of in operations Net which of loss the costs of business and value in $X.XX XXXX the We loss XXXX, at the of on loss value, on sheet. ago operations also of continuing credit in not life subscribers we million million $X.XX $X.X the July in quarter. share by or time significant December incurred balance $XX.X a of in under share or $XX.X stock the million campus. and share. included place put to million foot square subscriber outstanding we million do our million reflected share net $X.XX had continuing our per XXXX, XX% the was like year repurchase or XX the in On of in share acre approximately borrowings sales per to from equity any gain that or expand acquisition the Gaiam $X.XX million which from operations per cash, compared in $XXX.X XXX,XXX of line a period In common record in $X.XX to XX, loss net quarter a $XX.X per secured XXXX, fourth was branded compared continuing

call maturity now the the remarks turn December We balance which liabilities; back over call some the is like questions. in the Jirka line to have included after XXXX. that, for due With to until contractual not open current for additional on we'll although, I Jirka? the would

Jirka Rysavy

below strengthen while to track continued in customer to we accelerated our growth, business The acquisition subscriber plan. costs momentum continued as has

with During we quarter, now footprint grew XXX our also geographic over subscribers in countries. the

Gaia recently Spanish, and expanded also we Gaia in German, have launched in French. in We

XXXX times higher profitably, of we XX% operated during count to than now quarter is subscriber Our only growth. the limited were third but when we three revenue

months growth which XX% XXXX. subscriber end the of was our our by achieved to As ago discussed, we have set XX goal, successfully accelerate to first

is goal, open million Bethany, the the also months for thereafter. which end by next of next to like I'd with set subscribers questions. was profitably reach operator? to Our ago, and operate year call to that, XX And

Operator

Instructions]. sir you Thank [Operator

from first come Lake Our Markets. Argento Mark question will Capital of Street

Mark Argento

ended XXXX, growth of of I or couple know thoughts in on subscriber up for you for to initial off whatever a what you're the relative Any XXXX? 'XX first over been acquisition in growth. terms control in of for expectations Just have thinking the about terms quick lot the levers ones, XX% of

Jirka Rysavy

I think focus can end million to higher you to for subscribers the of little start. and as that. hit generally, so would the members to right grow the now, a by But We million is tend optimize hit to we calculate next probably quarters market allows. going the year, to goal us

Mark Argento

any -- growth? talk kind in then of you terms value life of could of updated And or about anecdotally churn in the subscriber or terms time trends any

Jirka Rysavy

the said drop consistently, all you life is growing, for time of it call, The life we value drive people to this its also as size expect acquisition continues time costs company on the We us quarter-to-quarter. because pretty more it's growing would But look in our pool value, annual that if the the have in mature that which on value. own. the mature customer, will for you

upsides. those have you So

really very So actually range, doing and we to dynamics dramatically. they're on soon numbers in the get a and it'll grow million profitable well our as show can more we

Mark Argento

that the real then I drew know terms the availability lastly prepared of just from and your down maybe guys mentioned line And remarks, in to me. had a line What Paul, that on on estate. it? you you

Jirka Rysavy

tomorrow generally, said December drops as XXXX. million we K with it's filed full of six months the balance due every that end December there. down I included $XX.X be the in That'd full the agreement But at

Paul Tarell

make place, to typically in just it drew not it. currently sure do to that It's We line the is outstanding. on

line just place put can we the planned. now headquarters sales in the obviously also in as leaseback we So do increase always and/or as

Operator

Capital. from will And Rabover our question Artko Peter come of next

Peter Rabover

question, I a mean getting confused. I had like but I quarter ask I this every I keep feel

and XX.XXX, revenue, that's you were on was SG&A based said your X.X. reporting that acquisition so had you your So XX% your costs of about

million What am balance, goes in that trying out $X guess I balance. that figure So I that to bucket?

Paul Tarell

like salaries? Do our mean you

Peter Rabover

Yes was on -- the that corporate…

Paul Tarell

is this get good we fairly often. it So because do a question,

and the overhead our includes publishing customer operating team, merchandizing our support team, and of our of operations selling team, all our marketing So team, salary our team. overhead,

today, employees, and at we you myself, very that of that XXXish in a employees line. from operate up because line really majority So just do say infrastructure have we the end and perspective. those Jirka When covers corporate I'd corporate the look lightly about

the that's remainder majority of the that of So that the line.

Jirka Rysavy

Also, in XX%, our of all languages expense in hit titles marketing and to and subscribers in that take line, we upfront around marketing did, accounting German we because company, as have expenses. We but if you we that we in pretty all P&L especially for by a because media the chunk it that high change Again, line. there's yet, take languages, a the for the French. because big those percentage that existing number, you don't other

Peter Rabover

was what at driving -- that. that’s I was That think I actually

that Is the So that saying? foreign XX% so. the language include of launch you're what or

Jirka Rysavy

Yes.

Peter Rabover

actually Xish that actually for that other with the line you think going study forward, but line, mentioned would you Is that? X.X way because aren’t acquisition that salaries fluctuate that there. down, the things included the have be that about in going to the costs the So shouldn’t customer that's

Jirka Rysavy

probably drive about dollars even to higher talking of to of because that the to have decline. at one continues the rates spend, revenue with know continue as a number don't caveat. it's Yes, we that percentage grow going if I that we're down, growth absolute we

Just that's the one caveat.

Paul Tarell

of at grow of XX of the inclined look if revenue like leverageable. if will million grow there's we cost basically people, times, on cost so revenue, really percent company so -- one employment we than as very it you on at It a time, our leverage if look less $XX

XX probably times leverage. have You XX,

to the like but very Facebook compared to Google get probably to still per is other like numbers. expenses revenue. which would more other make employee, We $X million that -- grow, compared So lightly or

Peter Rabover

little past, just number I sure this guys the true. but have you Maybe that's backward make about want a I question, to talked think in

be probably growth you be a had you XX%, So this But breakeven would around decided quarter to like mentioned? business? it's what last if I your just think

Jirka Rysavy

it'll be today. That more XXXX, was in

Paul Tarell

every -- looked haven't hitting we focused specifically, we on XXX,XXX hitting because raises that were Yes, meaningfully. the on add we're But focused subscribers that number number XX%. we at incremental that

XX% growth. obviously We’re to staffed support

I than number it is but have today. for you, So exact XX% higher don't

Jirka Rysavy

things we're profitably. grow because what say if It probably there's the save we've But with as can happening million launching. XX% big probably sub, -- you picture, we other

Operator

back At Mr. for turn the closing this like I time, this concludes our Rysavy session. over would question-and-answer call to now remarks. to

Jirka Rysavy

when early we you Bethany, quarter you, our look Thank And and Thank report next with we in speaking you one you. May. forward every for to thank joining.

Operator

Ladies conclude and teleconference. this today's does gentlemen,

for disconnect this time. may at your participation. Thank You lines you your

Gaia (GAIA) 26 Feb 182017 Q4 Earnings call transcript