GAIA - Earnings call transcript Q1 2021

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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 First Quarter Ended March 31, 2021.

Joining us today are Gaia's CEO, Jirka Rysavy; and CFO, Paul Tarell.

Following some prepared remarks, we'll open the call for your questions.

Before we get started, however, I'd like to take a minute to read the Safe Harbor language. The following constitutes the safe harbor statement under the Private Securities Litigation Reform Act of 1995. include that today risks numerous discussed uncertainties. and matters forward-looking involve statements assumptions, The are to, Securities XX-K and not historical but our on uncertainties include, These limited Form time the Commission, changing and risks in preferences, including detailed acquisitions reports from losses, with general XX-Q. consumer subscriber Exchange rates, and costs the Form retention filings other and and competition, conditions, business our statements. obligation no or publicly to forward-looking assumes Gaia revise update any turn the with over I'd that, like to And CEO, Gaia's Rysavy. call Jirka now to go Please ahead.

Jirka Rysavy

Thank you, and good afternoon, everyone.

a So off start. is XXXX to great

We consistently income continue generating to and execute revenue net against our plan positive growing of the flow. cash whilst

per even quarter. of gross per increased higher big from member a as growth through million with So these quarter XX% from revenue flat a XXX,XXX $XX $XX.X and revenue, XXX,XXX ago. XX% operating more or crossed year milestone. by expenses net million increase for known dollars, a generated of year operation from improvement XXX,XXX significantly $X.XX million. cash grew ago. increased about employee numbers. $XX was the as ago of will during improved X% to stay which $X.X margin obviously revenue XX% to revenue the And the we Gross This a talk in the EBITDA loss year million XX% XX% XXX,XXX from or to XX.X%. Paul driven We income to flow in share, of profit percentage to And

Paul Tarell

providing $X.X of the our net the to XXXX marks and incremental generating negative we quarter the flowed income. viewership XXXX our gross positive on during our quarter operations for of and the to fourth early the XXX,XXX growing of to positive was given improved or positive for target a XX% new team member SVP quarter our annualized line our in on excluding which generated with quarter revenue of that while year per negative improved a of the XX.X%. increasing the million plus increased for in hour prior were Cash EBITDA. of selection QX monthly first initial revenue overall growth will an generating a upsell from pace year, increased With while rate gross improving over live XX% consecutive XX% our the growth a promoting increase profitability in XXXX, revenues XX% or also us production members, a the in planned, improvement $XX.X more which ago consecutive first puts We for the to of compared quarter were core maintaining million, almost X% Revenues our begin the profit investment we of to EBITDA the Jirka. ended of content X.X on keeps Members and and is $X year net or fourth acquisition with first quarter operations. Thanks, generated in Total fully original This house, run and with new our which XX% per flow from ago which quarter selecting on marks $X.X shift our while opportunity during revenues, quarter. EBITDA margins, flows the to the during in X.X digital member the member as in the million plan. been $XXX Beginning did reflects we XX% $X.X costs marketing control from XXXX the the in first from We represent quarter. $X.X in go plan going quarter quarter improvement the pricing recently global cash bring in our the first through experienced EBITDA to revenues our XXXX, we of October allowed generating billing or of our flows. million which annual million. now or Premium and members plan, the Corporate year quarter revenues traction a XX% sales customer $X.XX to of of in expenses the investment, ago increased We million market, in growth quarter. programming, of cash million opportunity. million sixth sizable advertising market XX% $XX. the our have improved consecutive double an return XX% acquisition initiatives. during costs revenues after current of G&A content on Ambassador member which full to quarter to us net able focused year also and new line of million, year year cost to hired $X.XX in us quarter of is of is recent build of acquisition our share balance were quarter. quarter from million loss see sales be end in that per prior levels. quarter She some member We revenues, during and with from end our most in high to will share the $X.X driven $X Selling or ago to on from relief which to fact plus our for cash This year quarter quarter XX% income the $XX $XX operating from million which our annual at on quarter. aggressively. million of the expenses annual ensure million prior EBITDA, access the content This costs year XX% to the basis on $X.X

and two going have our of sale significant corporate our performance XXXX September stability of the our with a improvements the in forward. portion created operational we cash have the With we of flows and the predictability in made the financial over campus years, past

board has share for afternoon. provide margins call optimize capital, million will in as open would shareholder as we cash I earnings our up to this focus Operator? and look announced return release flexibility authorized on continue This X growing to flows. operating as Our repurchase we we that, like questions. to a filed With revenues, the on program,

Operator

will ROTH Darren question [Operator from Instructions] a Partners. first And Aftahi Capital our line come of with

Darren Aftahi

mix. that Three the stayed for you or quarter. Paul, at annual just XX% may, consistent just my Hi, question nice in if taking talk thanks I'm plan job curious I on the annual one. adds quarter. annual in guys, and the about

up. looks ARPU one Second ticked like

objectives Or Just kind wondering, the is premium more second your is live on flat. kind half costs your like of business that if about events thoughts curious Just skewed leverage, leverage more it the there it's growth this year? And any growth? yet? of were looks year? of reiterated versus then XX% of operating you And fairly a your movement for from or towards talked operating

Thanks. that growth any about think and your costs to So modest, should if operating think the is in growing right about the way XXXX? is business business and XX% we

Paul Tarell

Sure.

a answer October. and to we certain From So the we specific limited because your level ARPU were yes, people. But live close are contributor around a tick consistent, meaningful a things this push the made we in just of perspective, we're the numbers from QX promotional about revenues has been Thanksgiving per slight holidays. in them absent event pretty bottom, it's of few show not annual times events that plan relatively that year, QX. at year to since to shift a where the actually, take been to the like be that at capacity my down going top given in But XX do mix likely question, to annual back XX%

say help to half going prepared take lot not focused in time in that we it of operating on XX%. But hump my in cash expenses. in annual that's will through net I it build staying we're of So the And planned. net didn't as generating income contribute in then we But February. our July We focused then year. But second not what on little the what start premium remarks. it'll the was and future is cash in that not which of over year's did generating to income out a that and so and terms revenue leverage, subscription, to operating focused getting we the expenses a overall we with we people interesting. QX. And what bit And is on of had being growth happy headcount I meaningfully ticket are XXXX positive flows, in to so flows. mentioned through expect and $XXX be is kept the basically And March on building digital full of six but revenue the only quarter flat relatively reflected

we're call start as incremental require headcount. we've areas, mentioned, those on going last So some in the investing, to which will growth

Jirka Rysavy

add to it. like to I'd

then at look as to know, XX%, revenue we're percentage being, down now XX%. the went marketing So you of XX%, to XX%; when at our of you we obviously, gross revenue historically from XXX% in

the percentage kind So to invested obviously, in this want ambassador, numbers we member cost it's model, But while down to talked the we starting these keep down the driven get of cost of or first we plus, but we as goal as marketing a XX%. acquisition obviously really quarter want next the growing want to cost kind about is bring XX% but the so year, to costs growth of it continue to dropping are revenue. of marketing bring we of higher,

Darren Aftahi

Thank you.

Operator

you. Thank

comes question B. Wolf Securities. Riley next with Our from Eric

Eric Wolf

guess, were subscriber if Good Thank efficient the in spend or subscriber of we reduction more strong as questions A churn? everyone. should a those one. couple may, core more you. and How and numbers, I of I about a think well, a function additions afternoon,

Paul Tarell

both. of The combination

happened I volume “lockdown” March. the look quarter, and of what really at think we the we the of benefit look a back start at ago, year we the half signup didn't until seeing when

that So year that be ago. from big QX saw the that the is wave really going quarter see to we we

us. quarter adds a perspective, as net being QX maintaining the ability flow. going still revenue while this about back And over year, have. we're probably that has confident been so subscriber ad of the where to expectations, quarter be income it's XXXX think have net cash just positive QX years, a said, all in we that had but be an of ahead able volume I the historical our And numbers to our we for a as look the you growth to the historically anomaly, in softest if from drive XX% we're and renewals to that But know, with it's your challenge, given going bit was little line

there headwind even of a are not it based worried too So is little where QX, if about bit on we're we in now.

Jirka Rysavy

We $XXX going premium more start to is live little our to a year. a from get to recall access subscription

on there that push way memberships. you know, of getting So then let's more some is, other focus the say

So we really of the $XXX kind make that push. to like

what we we actually different came or generally this members reports which but separate on pretty were very of us for of quarter was sure, kind bit, might pleased even the of revenue good. not So the but saw you kind happened, little know, where we end actually market,

Paul Tarell

Yes.

of us in is to So sub focusing on to the and higher he growth that what during if migrating advantage markets up members plan just give for specifically a focused that $XXX sound take we're Jirka, to the ARPU summer. on not bite. more it there said

Eric Wolf

I you allocate what your spend you technically then, about And in expecting it? and or forward advertising across of rates, shift some guess, seeing various Okay. relief how in going are talked because you channels, change

Paul Tarell

our in of manage of we house, agency. any to out spend don't Yes, it all put an we

be of and day trends it that day us So advantage to we're very any allows to seeing. take nimble

largest and Google it headlines all more reduced Generally, from on XX% period, our where big digital which the we've of optimize their you about expectations now probably with going you've predominantly I more the was And and happening. traffic trade lot and so the And Facebook our a platforms after market, the QX seen subscriber our the say per released number do we to is is side we at ad and us with “reopening” right money moving that of we toughest be very as is of flexibility trying the to of for to XX%. down I And who benefit after, know, so and are it can source we're being would just spend. do. conversions us plus online. spend dependency we're are looking what sub comfortable we're a targeted trying that gives to very or able The we money, we're going effectively. X on that and do amount to to either not that made minus the And feel try through

Jirka Rysavy

on generally more you is our to And access, the obviously generate goal well, as also, know, by cash. mean, basically it's more live And focusing income $XXX I cash. and it

of lot pretax you of We kind what's have the you high, somewhere line, to of the for so gross increase of for is last $XXX drop year, a the incremental incremental because different, bottom. that customer of our annual is regular more if cost look XX% at So year as growth, kind of the subscriber. is percentage of not even little kind and a growth, but to do acquisition know, XX% driving expect to pretty the this it's at to that

Eric Wolf

kind And spend final levels? versus media into in your focus on you planned market move more growth trends do international subscriber to I it. of your the And [ph]? of current budget as plan your revenue aggressive going forward spend Got media guess, impacts how question, terms

Paul Tarell

me our you say media, you content? When mean

Eric Wolf

Yes, sorry. content. Yes,

Paul Tarell

Yes.

Okay.

exit about last the to up guideline content that looking month what ramping to content, on we're start focus the investment, revenues to being when which model. as a year, we investment spent we're of call continue the should this additions that of library XX%, we approximate bleeding So to each through we gave means that's scale at off And amortization. targeted as the

to license the really do spend likely good the that costs to ourselves. you the three then last into market from we what it would years have gets go allocate how opportunity an content question learned different and growth languages, lower able down for over or than to we we Spanish so is the be our per acquire And to do our

to it we'd us. have to for that over there Given identify do someone

which the how that with we exactly investments So areas can looking again, is, at one of it we played language. we're Spanish make, that library there is is the

might things opportunistic And have Jirka a to be it'll so from And perspective. that add? few

Jirka Rysavy

Well, do we ourselves yes, a you can go but it probably it's it longer. cheaper or it's, you ourselves, acquire it, same, is we if cost roughly takes it if so the do do like, know, little actually,

it's really So to an significant of prepared do them are be of numbers. to kind opportunity both. None

this create again, from growth As a we we, for year. basis, of don't it's, expect XXXX, the lot those country

Paul Tarell

than A acquisition United those on cost per is States. lower general markets

Operator

[Operator next comes Instructions] from Our Mark with Argento question Lake Street.

Mark Argento

guys. afternoon, Good

$X around, just make that buyback wanted Just to know, the the sure you Thanks. you -- thinking what's and criteria place, acquisition put kind customer want said capital or X of philosophical, to there? your road I spending you versus thinking growth thought in process or And that or on about buyback when shares. million million versus the just

Paul Tarell

in to the place. one and made to The it historically as transition for place was Mark, buyback just so had to really shares. purpose place authorize years, that lapsed it's over yes, in we X management a Gaia. have in million We've putting re of many

get to that optionality sake. there wanted back we for So out

in by of world to Not on and investing we a As wanted the heavily primary the pulling other incremental that. see on spending growth, capital we we on But the public member but that to and XX%. be groups, dynamics our more said, can driven growth be an spending ago it to balancing my growth decouple doing to the German more initiatives, the into needs our reinvesting our necessarily market French it that we able to was reducing of look is the share because flexibility [ph]. out do where driving from into years, favor marketing, growth to anymore, at have more shrinking to into international then the almost the going these tool growth much float able be above want we for think year focus on and potentially being repurchase, return put But because But by professional the and float be the from optionality so paid really dependency it there heavily toolkit then not skews overall of from look it that there place a we expansion rosier our back into to time periods so languages I necessary are as on drive as about rate necessarily Ambassador even future, and horizon market. is perspective, media, in growth in but about again, spend. other start because shareholder future

Mark Argento

are about Any and do M&A How additional content guys That's helpful. side?. launching them maybe thinking acquisitions roadmap in that? about additional or channels about and through opportunity other then you thinking or on think content. for tuck Then some that channels you the guys the telling

Paul Tarell

Yes.

what is this been at we'll vast on bring based on aggressively it call benefit German, competition. the efficient to there's to I you're in So how into content member library that much teams so on look dots with expanding other alluded between data to we we would have analysis lower is existing our at and based not or doing and the content pieces internationally new it allows than deep because to costs our audience that acquisition are in connect native or year verticals. our we're language spend. already being understand market and to we XXX to grew subscriber in per those we of as the that the relatively Spanish content in US our also you looking we engineering And then before product go significantly see call looking it markets we focused need connecting or doing a see where because to said, create, there's can Spanish, if we're understand That of of so our topics journey, opportunity filler to with and titles French the work can XXXX, that

Mark Argento

And a solid great. congrats on That's quarter.

so And to fun guys watch execute. Thanks. you

Operator

next Artko Peter Capital. our from with Rabover question And comes

Peter Rabover

think Hey, you on the guys, What's of one, but I the for rest the questions just budget most my year? of answered I'm media curious. your

Paul Tarell

is referring what we're again, to? content The that

Peter Rabover

Yes.

Paul Tarell

say just QX our higher other renew little we okay. a of lot as Yes, ongoing shows. than Generally, I a quarters that's would is

continue the you generally, as reasonable proxy So rest look of the revenues could QX a at grow. being as year, for to

So million for change I and we think QX. $X were

just So that. analyze you can

Peter Rabover

buyback; there sort price would a in you you more have And then, is some you do have that? strategy where the buy guys or with of

Paul Tarell

of almost bit to because are, opportunity our million No that at the But I price. it's to is comment is on we shareholder that value, over the have think alluded cash XXX% period whatever look drives incremental in equation, that that we dislocations to take something put what our and could discretionary horizon. advantage X question to flows understanding QX really, And strategy a for look on of investment quarter, investment period that from Mark's on internal they we analysis I content we what may also Because flexibility, had sure where at the other understanding make looking is of on operations, be. not want we our want we a a pricing, it's in quite from particularly static place at as to where would the with cash. us

Peter Rabover

for the good Well, Great. so on answering Congrats quarter. questions. much thanks a

Paul Tarell

Thanks, Peter.

Operator

and for our now this time, concludes you. I'll Rysavy, answer to Thank turn Mr. remarks. session. over call this back closing the question At

Jirka Rysavy

you August. will you forward And somewhere speaking much. in Thank for us. we early quarter we report joining second you, with our look Thank very everyone, when to

Operator

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

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

Gaia (GAIA) 4 May 212021 Q1 Earnings call transcript