GAIA - Earnings call transcript Q2 2021

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Operator

Good afternoon, everyone. And thank you for participating in today's conference call to discuss Gaia Incorporated's Financial Results for the Second Quarter ended June 30, 2021.

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 XX-Q. losses, to, These Securities retention and and with our to and uncertainties including business include, time not and acquisitions consumer reports limited Exchange risks XX-K from but conditions, subscriber Commission, are rates, and historical on the detailed competition, other costs in changing preferences, filings Form general Form time our no publicly forward-looking to assumes statements. any Gaia or revise obligation update note being Please recorded. that today's call is that, And the Rysavy. Gaia's would with over Jirka I turn now like CEO, call to to go ahead. Please

Jirka Rysavy

per Thank you, Even slightly of revenue of dollars $XXX,XXX the Net improved million second a by decreased $XX.X $X.X with year our Jenny. of $X.XX to loss. XXX,XXX XX% $X.XX operating from as improving revenue members. gross, with to for XX% our ago. was actually And expenses XXX% a XX.X%. afternoon, $X.X Revenues million Gross income in share increased at percentage to everyone. million and quarter net loss XX% significantly margin from good steady or

an As this a represented XX% percentage revenue, of improvement.

$XXX,XXX talk to will X% XX% quarter. driven Paul about the of now which to million, from $XXX,XXX or to increase in year And revenue an by results. $XXX,XXX speak $XXX,XXX. now employee and improved is almost These for you EBITDA of Our of the $X.X in were from revenue XX% ago - improvements more profit gross

Paul Tarell

of costs quarter in XXX,XXX the quarter the This ago the XX% positive member XX%, margin Total with $X.X marks for income or is quarter, cost over and fifth revenues, our quarter. the year from which during value increased adds ended million consecutive our quarter to while million which to paying still in Despite target members. be X. gross We revenue growth acquisition quarter, Jirka. to during at $XX. uptick, of crowded per XX% staying second XX% quarter of within drive generating EBITDA. Revenues revenues caused customer the customer XX.X%. $XX.X our spend improved to were with steady Thanks, paid ratio market and market, the to were cost lifetime uptick our to acquisition level. competitive this media advertising over able digital continued The XX,XXX an while with net overall during we X.X the challenging Even acquisition

net focus occurred during an The of the Our XX%, for in rate, that for as rate annual niche cohort new growth our cohort streaming to started an north to of and year the been from large the our lockdowns ago COVID the added launching the benefited quality original we members the world of audience. a content of variety library and of reopen renewal is a testament quarter. have size services period renewal has and annual strong underserved the on

planned, flow the compared to to income, the able Cash incremental costs during focusing $X million and improved providing investment quarter member the through return XX% our almost net in the $X.X a in quarter, from year have per We successful consecutive in $X.X or current XXXX, increasing $X.X second generating to year events of EBITDA expenses July We generating our the quarter revenues Live $X.X while revenues from period XXXX positive have improved prior month quarter of levels. $X.X with and million in content or $X.X consecutive our of Again, traction quarter we quarter our an XXX% restarted our Selling XXXX to which $X.X on excluding investment operations. and quarter XX% the down second ensure our this million also X% monthly ago the flow of acquisition and operations marketing internal balance the of events year programming or that cash to generated million improvement quarter. XX% in million of quarter. XX% content and and control G&A ago marks full revenues, per to from in ago that increased from ago quarter. in of is fifth at a year the second the improved revenues content $X.XX during million. the EBITDA cash million seventh to or in the million, an Corporate revenues of cost first saw benefit scaling event the been share production million sales of in from quarter reached we in increased in have XX% program and positive $X.XX globally. or of the from of of of expenses, income our improvement of flows during the to a been of November. basis upcoming net team from original viewership has We've new in operating the August We threshold. end-to-end $X.X quarter $XXX,XXX Ambassador member to our generated continued as on from second $XX.X the our share year. million hour overall same high With were our to on net also a early loss completed on swing quarter new in-house, the fully per quarter. each

we of we year, growing As into to our membership putting tier. the half second premium energy look are the the

is the combined Ambassador premium blended on offering of the as the well compared revenues with the potential and to on members, new events, growth dependence $XXX member ARPU on user utilizing growing business of annual $XX value focus as offering. XX%. will continue be a educating to current offering operating additional or concentrated reducing our the premium to members per media paid north to a with margins premium drive allow will ARPU network promote current incremental revenue We growth. on model's $X.XX drive revenue us upcoming spend this while to the of profitability, This to Monthly average for monthly

result As focus expect resulting up I'd levels higher this increased open call revenue to questions. margins Operator? With generate like we in similar to for at of the that, starts compound, profitability. to a operating

Operator

Thank you [Operator Instructions] our Argento to first we And Lake Mark will from question Street. go of

Mark Argento

little a And I little afternoon, just incremental updates there's about on down Good Jirka. there Good if afternoon, content bit wanted just bit program, what that? component a Paul. well? about you the Ambassador also to little drill a any as get, quarter. wanted then premium. to just Nice that I the talk to Maybe is a bit on Thanks live talk

Paul Tarell

Sure.

incremental premium content XXXX those from in the of events the early perspective, members here, content and Center any or part So offering COVID Event new And the Sphere because produce we of in Gaia that XXXX. the restrictions, weren't to our get. able the

as now we've from mentioned, month So August events November. July the event, had, I and through have we each

expect as roll preliminary only the been have calendar are we able catalog these the sometime not we fall And well. completed, that out as that events but of have already the coming the So be well. do have XXXX to upcoming to in we ones

watch or to So from as content. the getting on access couch that to style a conference really lean of value style your the kind opposed workshop content, it's back, type about perspective, of

and economics there. ambassador the promoting premium because point the with key tier lot that really So about the you if more program events premium tier. it's think of And work. fundamentally marketing ambassadors It's those share the way lucrative for that and be rev intertwined of subscription the our price a the because that's to

So the we mentioned ambassador of hire - ramped the network grow. on as start our last and She's starting up sales - is beginning starting and SVP call, we I had of to March to March.

Mark Argento

then one other And Great. quick one. just

look In of pretty be the terms EBITDA margins strong. to

reaccelerating certain philosophy playing didn't here. you'd as you In that thoughts as cash going around throttled off around. point if to starts market you back At now terms pile the it everything a [ph] are that do up? to of you on were like think free margins that what about on incremental accelerating growth Or with togged and you're I good, Any threshold, your kind significant and EBITDA, to the able when know had to look cash, any generating of of kin been extra you look do growth. back and one plot rate? hit

Jirka Rysavy

be So as we'd said year, a kind of, we talking, definitely, to to like bit I'll of more vision, kind little of beginning on we grow. while still EBITDA margin XXXX, year, at next the a on growth refocus want the

lot see When there leverage. for So contributing of incremental a an we're much how is revenue. you

we'd but absolutely year. to on next So starting like growth - from refocus

undergrowth for to main know, the are there's as and because kind cash really $XX profitable well, subscribe difference, monthly obviously, MBA [ph] said, very the So our focus members because what's be flow it's Paul site really more we But going of premium for to It's because a to a network. you or similar. getting as us, since you costs $X on pay if big why factor. our

like some more of profitability. getting put also in wouldn't people we to So on a because focus premium

of a you're the people So subscribers subscribe as grow will membership. from divergent revenue because now see to and a on more probably revenue the kind the $XXX to going more little

Mark Argento

Appreciate guys. it. Thanks, Great.

Operator

B. Riley question Wold will our of we to move next And from Eric Securities.

Eric Wold

Thanks. Good afternoon.

spend? and you questions. premium have you give sense obviously bang of kind of mentioned competitive spending - get focus of the of will pivoted where for the kind dependence the us paid you the a you or lessen on Paul, of buck So for program is have subscription during how on that Maybe you a are media, focus couple the have I restart. what more of your And adapted? to kind Ambassador economic guess, paid how more becomes you as shifted media, kind your just on

Paul Tarell

a it's question. Yeah, good

a play couple that at as things of One mentioned. think you is reopening you there I the as is here.

there a So have time would into coming of than historically advertisers space the year. this been at lot there's the more digital

away the they of means have that respond their there, using first we various historically restrictions party started used service have piece And to to in rolled advertisers that pretty The that in of cost bit plus. move to and size on become heavily after the from to for through then worthwhile terms where that over drive but build And also really paid a continue the But last the us, really that as audience are globally. the our volume as tools media lot starting that for those second is from of providers performance-based able both app in challenging us, grow and able to SEM, social now us, iOS and the the digital XX terms privacy is our search focus Apple's more for YouTube year been reach bread terms just marketing to and have for we starting we there. we've paid it. changes And go us are. butter scale information the we're to and for to become of a

Jirka Rysavy

we from XX% revenue And give also, little kind as a last year that's obviously a this in to of, marketing restriction, year, spend. us of we as also took but that perspective, bit XX% percentage of try the control to

that the this put also for drive that members. So premium of kind to

Eric Wold

Okay. time, we be moving of of maybe kind towards paid actually How more they kind lower on think your unchanged we kind total. about spend how think less How on buckets? should dependent shifts more get the of in will Or you you the Is about Ambassadors philosophy spend? did media know, should that as of you get compensated. amount total the and as efficient kind how and over dollar

Paul Tarell

it revenue. of So is - as I a it's think percentage the about way think we

So we're range. XX% today, that in target

the As at economics to trying that Ambassador the move all we in. of XX% revenues we're to look of closer model,

you marketing us of you content. targeting. that more revenue as that then driving to down, shift as a revenue we're to of allocate would the the channel, more then percentage to So in growth potentially allow rates And get while bring still that the future, can the

like and balance mid-term. with is If spend we more of ideally, XX% in as for the I'd said near to But revenue. term see you target marketing that a longer percent our the remember,

Eric Wold

the sense later of came those Then maybe question. if subscribers. successful you do plan? you the retaining cohort that any joined Was back just month-to-month for Fair. that so, of The aspect a the renewal of of kind of how a kind kind And annual have there. kind final XX% one of were come and rate for that on on lockdown and

Paul Tarell

get in monthly Yeah. just The actually that see we've on was COVID, with how feature the That a we a very independent so monthly put we that do hold churn is implemented where behaved albeit up our lose of to to And for member up. plan. and for way. a that can bigger similarly members what don't monthly perspective product annual their then behave people a But returning out to few resign they from a them have some monthly back months, three we're a up, account seeing We to to come that come decent people there losing then want and our cancel might months for might month of do go content and of members and resign away a take and or number continuing couple positive we're break trends into them. then visibility for just back without promote. and that push

also member monthly as coming they a behavior they So we've high as the intent they for pretty to use pay that want consistent as but that's us, positive have of it, back. flexibility well seen

Eric Wold

Thanks, Helpful. Paul.

Operator

question go to of Capital next from we'll ROTH Darren Aftahi our And Partners.

Darren Aftahi

guys. Good taking afternoon. for Thanks Hey, questions. my

terms how first, upselling on terms as you were in general? the just are new products marketing growth aggressive subs of Just in in spend after going premium of

Paul Tarell

capacity in get out on Most mid-QX. quarter of going if after subs the - we of until really were initiatives our you general of in recall, the marketing didn't because the focused shroud restrictions

So behind to we pivot case emphasis to didn't the in we any all. want events at had it major really put

then own drive around the and to their coming and and I'd more in for in start offering. and existing the in that it. audience primary talent us we've But the whatever using the focus and the that thankfully, to given members say and new educating price on moving However, which to Colorado, point push ability marketing to they confidence more has higher events are premium around have to been have converting acquisition and their events really clear our more on might is open, therefore,

be relatively world, catalyst we expect good and visible the for us. coming that social a in have We in for media to a event, September talent the pretty

show we'll members August not into their upsell for to event September, but the in launching members. feed With then premium and in the able be also the opportunity only

Jirka Rysavy

sure cash over a right much growth put make But on thinking time would spend weigh still on with four last of about more really our we equation. three, focus positive that more we of lot we profitable weren't now, are also quarters, the the the because, - flow, when as can the stay profitability solid the really level with we growth have

we kind step as Paul So focused said, more to now it's try growth next and of on next as what's year. to the accelerate go the

Darren Aftahi

the growth? is critical, And then then like what out? would point that as mix? quarter, out call kind on growth, of about markets the International, accelerating And me, how And any like you your acceleration was like in is excuse international of XX,XXX to in pivotal ads you

Paul Tarell

media the levers we US that on future getting world. a is continue paid of market building Yeah. actually the our we've which the with Ambassadors I going and front that seen around particularly Spanish capability South to adds, We've case building the wouldn't Mexico, up, our in growing net the one it's for disposal, down Ambassador while having at on offering my say actually focus as quite the that more didn't Central of same it's is the bit and definitely the not price I it us contribute seen that's quarter's see to critical, and there. meaningfully but the in like saturated America, traction

we saw, marketing do traditional couldn't for that with it a of was opportunity area and initiatives. us So big that we our

get South for America. areas down marketing is in more those us and word-of-mouth in this way Central regional So to a

Darren Aftahi

last me. just then one And for

Is logistics Given that run guys I increased know prevalent it produce levels? your in anything the house. actually XXXX own guys creating has you is everywhere, inflation there that content for the of say, baseline? versus in-house, content you Is to cost

Jirka Rysavy

to money employees. all. at with all. lot our early full of We is that to avoid not pretty try a because No, content at much done that all see don't actually, invested we pressure our time It's

shows music little all more like So be animation. I the in more we a might having mean, and

So zero we quality we have cost. increased number internal, doesn't subscribers, production any of it's but pressure content virtually our of, - consciously, from outside with total kind on really

Darren Aftahi

to hear. good guys. Thanks, That’s

Operator

Instructions] Peter go [Operator of And Capital. to will Rabover we Artko

Peter Rabover

guys. Hey,

little the or like Just changed maybe better some new curious potential have curious few so idea was, market, guys on in years, you've addressable taken for five what XXX,XXX what's you of, you getting kind clients about and your on learned, total you've off. bit I congratulations to - and doing have whether a last been almost discovered have I'm whether this years, subscribers.

color be great. would any that on So

Paul Tarell

investing the drive started start around not we market also French And in German, and globe. really And more that our our Spanish, situation we the our on more part that the Yeah. mental separation I prevalent. the market things some more I looks health and them. that side separation of through people with current challenges see from will obviously content. wasn't around going move and and try think in fear as for now English this, when helping of world that a from then day We going to addressable with which that original addressable the of say, opportunity I with on other is people that of more of and like and any have and stay events of us through anecdotally, move I see benefit expanding a we are every will of whatever be perspective resonating use resource the lot to to only. really away becoming

content out audience give can And take, the able our have then and our that obviously for. niches sub-segments third will, if use call we to to niches existing grow of We're as to is them get grow to that that we start actually data our start them within start ability have some of audience you mine and to we and and love out So and produce go the expansion to piece to then well. there.

that I didn't streaming our continue addressable households So comfortable get that more move total question market more as digital and just early your numbers, answer targets grow would I our specific fact also content but topics and we for of breadth the aware then and with as to first and deliver and any say more and resource we're covers the people depth that of for exclusive a we become the and technology the content the to Gaia bring use pretty that that it.

I'd So going the say perspective. everything market the is right addressable in from direction

Peter Rabover

at color. use Great. then Thanks more media ways word And customer years. to an that think that And the maybe spend last business in of of the few is don't like guys development I kind influx combinations. look so want content to focus much to I from affects I'm potential for - to industry you certain sure turmoil,

you would media industry thoughts with state guess, So funnel? willing thoughts have of be I'm that your where just curious share current whether guys us, and the to the you that or fit guys think you any color on into I you

Paul Tarell

of there. That's lot questions a

Jirka Rysavy

of definitely But think question different that's lot a It's five like now. ago, of segments, about markets, Yes. even I think different totally validity I it's years wide question. right, disappear right for streaming, was

to And kind you start to difference struggle, start like to of in a have quality and better launched them offering. see execution. of some business, of a they combine players who lot of their You create

a If kind Netflix Netflix has Peacock, compare you doing Obviously, it and of day. it. and like compare, debugging like, it's night longer benefit say,

to staying market. on subscription kind our the difficult overall I And still in make the our to more a looks, would So affect see really a we it's - to standard, more market new of us size there's now. have per was didn't the niche. of say, are quality It's how let's much. want But But how year On not so market kind it they would kind some other in that of se than of really it's still you deal there being restriction. we being is didn't a in restriction, any We a expect it advertising overall, is of we entries would players definitely, happen. short side, the like a knew new does changing. ago, standard the say, entries, competition everybody happen have right we what day to going see this you behind and keep virtually kind will didn't offering COVID see of the and But Netflix lagged definitely defining see not space.

the gets looser. market advertising So much

much. - tightening. that more but I sure the it's but impact, that much Olympics, I'm not Probably impact see probably wouldn't us is some there's Now affect definitely really how there's in But some.

these media kind But advertising events. developing. have market events the think you I typically So whole as is you of

have You control way iPhone. for Apple-driven with how they the changes the

I you say impacting to So to would us. from directly our point always have but adjust it, is not

think I much do. what people what it's than other we do more

Peter Rabover

question. appreciate somebody really color. a take I else I giving great. And the Okay, you're in thorough like

Jirka Rysavy

Peter. Thanks,

Operator

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

Jirka Rysavy

you speak which you, Jenny. and everyone thanks we you early will Thank in look third to be very for quarter, November. Thank will much. with our report forward to we when joining, And

Operator

this And today's so and conclude does teleconference. gentlemen, ladies

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

Gaia (GAIA) 2 Aug 212021 Q2 Earnings call transcript