GAIA - Earnings call transcript Q4 2021

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Operator

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Gaia Incorporated, Financial Results for the Fourth Quarter and Full Year Ended December 31, 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.

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

however, the like Sage started minute take get cover to Harbor we I to would a Before language. of The statement following Act under Harbor XXXX. the Private constitutes Securities Litigation the Safe Reform statements discussed matters numerous and today forward-looking The that include assumptions, involve risks uncertainties. time-to-time limited not acquisitions uncertainties price losses, acquisition personnel, Exchange general business membership costs, our preferences, and customer growth, and brand in member are competition, but and conditions, from reports the of rates, loss Form other with include, risks Securities detailed including to Commission, These consumer on retention key changes, XX-K future filings Form reputation, XX-Q. changing and our Gaia or revise assumes update publicly obligation no any forward-looking to statements. to the now that, to would With call turn I Gaia's like over Rysavy. CEO, Jirka go Please ahead.

Jirka Rysavy

everyone. afternoon good and you Thank

key we and at positive flows. cash business Yoga we negative represent improved Gaia, XX%. as in for EBITDA have years first margins XXXX, from results our have revenues growth our the positive XXXX operating to XX% and XX% as a we product compounded and sale annual of So a rate, income achieved Since free milestone grown

XXXX grew During to to $XX.X member XXX,XXX, million. we count XX% revenue increasing our percent

the million in from $X.XX sale to of operation to flow campus. year of XX% income a and per over million We $X from included of of share the gain to with Cash or $X.XX ago $X.X Net quarter the XXXX on $XX.X to or run million. the loss in Income share from a increased a $X.X for revenue revenues. Net improved or $X.X our per year $X.XX $X quarter. incremental expect for from EBITDA $X.X compared $X.XX flows to XXXX $XX.X year, rate which million the represent share exit which portion to million. through million, $X.X was $XXX XX% through, for share per per improved year improved million XXXX. million income operation for last a million million

Gross the cash our $X.X a Our for was the our of it members profit XX drive per We is after at the acquisition cash use below of on million. profit decrease annual our profit increasing compare offering XXX,XXX, This annual employee for to is at Library. ARPU $XX.X gross by few quarters of and employee gross $X.XX to per in will was another XX,XXX Yoga will balance sheet balance of our the million help $XX beginning To compare pricing. International was and doubling year XXX,XXX. our December International improved to French Gaia. overall employee. without Content $XX.X to But price million. actually This next of Yoga at but Gaia

our a achieving which internationally, $XXX cash flow, are $XXX Our to average position to assembled of Gaia improved year aggressively content. virtually a member lifetime our and good value of our over we annual last utilize we of income now we expand before. operating from Because goal of have more year to worldwide can to rights and all free in

both can existing we talk will our So infrastructure. leverage to results further Paul And operating now.

Paul Tarell

added XX.X% of XX% incremental slightly primarily up declined the to to revenues during margins XX.X% were million. $XX.X due quarter. Revenues Gross quarter fourth the the impact fourth up to the year with to for and for the quarter content for amortization year,

media during to next the approximately completed with Total year and of the of $X market, a gross forward, were ongoing combined XXXX, going million iOS year impact on season create million of member revenues quarter. ago XX% revenues or of the changes the December headwind during compared paid be efforts on full adding amortization The quarter XXXX in acquisition our X million customer for acquisition our to year to to or acquisition we the margins quarter. year line in privacy International $X.X Yoga levels. XX% XX, With crowded anticipate per content a the costs holiday

digital environment in evolve early adapt and we to to strategies continued some marketing acquisition the relief current experienced the seen the fourth our have to ‘XX customer per in quarter. have We costs from

Yoga have that $XX a access With were a $XX.XX and is a-la-cart the were on Selling reach plan the addition includes $X.XX an allow member in higher annual premium the overall to or Xx the year and to compares which excluding G&A variety $X.X $XXX and revenues. Combination basic expenses offering X% million of now or ARPU. ARPU year expand $X.X revenues. a marketed opportunity interested or of also courses historically sold were forward. XX% and marketing differential Lifestyle fourth efforts the continue priced International, have should quarter we pricing, and quarter marketing expenses premium expected to a in the with acquisition at costs million tier the year. basis. going a in Corporate our that to plan consumers Their to to They of an fourth a expand our on us wide at of operating of Yoga

to prior For total XX% we the XX% operating year year. of full expenses the of improve revenues compared to revenues in

non-recurring transaction. acquisition in XXX,XXX to costs YI incurred related the also We

additional revenues million related to or did due on expenses will XXXX our operating material amortization being operations acquisition addition results December of YI is previously content $X.X the for include acquired of assets, intangible approximately million not impact While the ’XX, impact noted. amortization ‘XX incremental to the in on completed have which a of $X on to

during amortization, the first from historical trends level a to slightly our expense expect we incremental acquisition. due addition half also the operating to ‘XX of higher the In

or quarter, and the million XX% but acquisition $X.X across do quarter operating of in included costs. We EBITDA third are of on in the show our up revenues company, impact synergies the expense benefits of our the results integration expect until activities ‘XX. process completing the combined not the identifying to of the was operating which

partial expect the noted synergies first the costs margins compensation XX% quarter. of previously. to until the year which share the be million Adjusted half to ago EBITDA $X.X or in for acquisition expense with the million in year million or We $X.XX operating revenues of and line We excludes we increased from generated based income the fourth quarter, share $X EBITDA quarter $X benefit $X.X realize period. net million of or by net quarter million per results compared ‘XX $X.X XXXX fourth $X.X $X.XX or as to the ago the income during a per allowance generated release during result a year per share. share acquisition. triggered the of income of we fourth in have YI of tax $X.XX Year-to-date The an reflect valuation the million of

have generate Our strategic evidenced by our acquisition scaled. continued has cash International. to operations expand grow our as This to has ability as Yoga to we allowed opportunities thinking of it relates us flows to as from growth

call XXXX, like maintaining we have focused about revenues look to for to the an annual into similar global growth revenue we growing while benefit I ‘XX. annual would Operator. continued questions. for As from With We're financial are the open and driving our Gaia excited rate profitability. that, to – rate opportunities scale up on we discipline demonstrate the to growth and

Operator

come Mark first question Instructions]. with our Please will Street. Lake you, Argento proceed. Thank sir. from And [Operator

Mark Argento

on International. Jirka! Yoga Hey Paul! Hey questions, quick Just first a couple

products? the the separate How brands. leave to base, going Gaia to you relative do as guys about kind together Yoga the better maintain in Yoga subscription them are just understand, wanted of subscription of put think to International. Just you them you the Do legacy base kind or

Jirka Rysavy

as Strategically a Mark! more… like brand and Hi premium – brand, Yoga look Jirka. Paul a we give yeah. offering don't separate separate of which kind a offering. as at a can offering, to We with want say want it company, separate continue some to per is the

Paul Tarell

and Yeah, so of ours. one monthly price I and between components is annual the first to differential their think acknowledge the prices

to consumers as So by really Yoga Gaia’s makes Yoga offerings and leave it try can the drive Yoga the some more supplementing so with it that content, aggregating sense strategically International value them Yoga the delineation on offering. we offering to longer to Consumer the to into of focus International form separate

recall, price are level, focused the really to for Only you a compared Yoga month historically years to at been three a $XX our $XX Yoga $XX of Gaia two to offerings that haven't was As majority the we point the because past on month.

as gives my we customer this is really after and do even technology us much to So possible trying back cost opportunity savings, differentiated. and allow as experience be remarks, the the to integrate prepared that. it in able to an really mentioned to historically didn’t go if as office I for we're But

Mark Argento

some sell Yoga Great! the guys, to customer and subscribers how is file customer there opportunity cross any file. size you can legacy that could maybe content your other big how at you many and International is And to of

Paul Tarell

some opportunity of add original our an definitely there's Yeah, as content. we

[inaudible] is lifestyle Yoga the shows of One Yoga the that's content and in International the very that other content. based just is map on not Yoga interested

definitely to there's back. trying their win members add them their to to an to So and use former in offering that opportunity go to that

when experience the member past based years One of so COVID the we mid-XX,XXX the over the a roughly is range. half their Yoga and on that in the them unwinding things International base, bump, has growth and acquired is of

that as logic we review finalizing member and the customers and to after looking that ours, we We number, months now customers between two data are at the making sure them. still with that's for used and their same our feel the end our with the but comfortable overlap base pretty estimate level what transaction their of apply we of year counting

Jirka Rysavy

$XXX they you for soon do And to live-lessons price, will price to live-lasses. not which basically year their They the be price average, premium a Gaia. for the will will some but to $XXX, to basically the start regular they the basic offer it know – include used it

Mark Argento

Very Great! Thanks guys. helpful.

Paul Tarell

Mark. bet You

Operator

Please We'll take with question go Wold our Eric Securities. ahead. Riley next B from

Eric Wold

guys. afternoon Good Thanks.

you about Just quarter guess out as costs hold quarter. the a know the market to adapt you couple customer want somewhat acquisition those challenging or of around spend there, one, in you your able back into Paul did did advertising year? a this you advertise talked Were spend to higher efforts questions. how and you you your everything I

Paul Tarell

for of off dissipation then with timing being December. once the redeployed historically particularly kind and We seen of spend spend, November end trigger the into our it shipping the the backed we've the though which had That's for of result early deadline, that free but and to the the convert. media. members of day because incurred December the the expenses demand the of not that we trial, opportunity during all seven paid the month, of is The of

XX pushed a way two we that So member effectively from of that wouldn't that in January. a first last the the will kind of a the spending messed be of but back of Normally bit from that if held in the that conversions bit to the how we capital of deploy for us that it redeployed with ads issue days, into big was compared perspective, little to allowed terms happened spend. customer December then the timing weeks little and get you in a timing it But in marketing. opportunistic

Eric Wold

subscribers day to could how countries that from plus possible a minus have of many delayed estimate of relate mid-XX might think XX you what January. Any kind about as been into Yoga,

Paul Tarell

that environment, cost of to we macro, about acquisition specifics everyone's in don't qualified is the this and the external that that point level have increasing. at customer we No, key media the of talking as cost level. speak don't evidenced increasing though been Really of and the

years seen already we've few So from February high that say QX. what mark was I’d saw in in the significantly January we have past QX the dissipated and water and

Jirka Rysavy

it, of would have have Yeah, because know you first historically people members, how so know And double, cannot you there's the to some, adjust don’t still for things a we we things, basically a with. you time right. have own deal if for couple exact do the to it overlap the of long while paid you always we so

customer a I So it's but overall to individual marketing. getting that, know fourth in And you buying my base it cheaper of we and over the kind quarter, into that the situation tried the right estimate overall in customer be we might because in – the in than of what market, life now on saw just it's several did happened companies. as obviously the buying XXX acquisitions buying

last you in to from have it lot smaller for inbound six of international got and it’s interesting a environment another we negative companies, because and growth them, would difficult the having and companies. be the We calls we a we companies acquiring saw months for other see

So raise the prices that. very impossible also, small it's company a money virtually to difficult, like for

make chase it know it this at actually not, than this be a to higher the want do we look better So of part you the acquisitions model, as be the market dollars. what might but year. we might something with time to If our

keep kind will of this percentage the assume that but would this make saw declining You us other – our situation allow it's that. and so I every of like marketing might some year during to year year, solve acquisitions

Eric Wold

question. then final Got it, and

You about a know talked you ending Jirka Paul talked XXXX the run $XXX more million about – than rate. revenue on

would know are that get now? biggest into You you point as where know driver I you to you the what guess, from to

Paul Tarell

And number I’d the say was is growth rate, revenue and use our so broader then mentioned growth driver point to successful would of Jirka to be as that international from the decouple number mix, the integration the more price meaningfully to into play. be higher one. grow one going two, the can try that rate revenues marketing we subscriber number YI

the prepared that, marketing year started French and have half sometime to have that well. the as doing meaningful German library and that we his on this in in we are adds to last expect he start to already started year Now online Spanish we come mentioned second ready more French what remarks, which of

us third So on market getting the ARPU feel some to incremental offering traveling languages side the the rate. Gaia to meaningful from person we're more be events $XXX and allow that around, will on component as other again and gives this decouple strict then growth U.S. I of year. we plus to that which three using expand Gaia if as new the And in restrictions is to of now us sphere and that premium again of going on will events potentially attendance, the subscriber build the think

of it. are back three at because at ’XX. a probably played the way as that out exiting of year, say to have I the I'd of little We're year first from comps the drivers of and the the half going in look with rate the tougher the headwind now bit we those over biggest So just last half growth right year look

it expect QX be we we the in that to QX trend and as I’d So QX. from accelerating go into see

Eric Wold

you Thank both. good. Sounds

Operator

next Please from [Operator ahead. from Steven We'll Instructions] our take Frankel go Colliers. question

Steven Frankel

all with? us number this business With international, entered afternoon. Good remind the on or year, subscribers whichever international you’re focus Gaia more you the where as stood you of comfortable QX could exited

Jirka Rysavy

what party the So, are by people percentage. subscribers Comcast, the counting digit total States, Amazon direct we in means if be United and they we keep a that XX%, you call what who and high like single call operated not take because of outside will always want third those as for to revenues, Gaia so those definition U.S. we

U.S. of the probably the those, of mid-XX’s outside we’re about outside Excluding like of customers,

outside. But – of Here – say yet. that's kind international the was the of We at people know the the number as from who you look. XX%, kind first least of I at know wouldn't pay is absolutely that number we that

of English our people all would historically offering. those However, watch still

languages, just we’re those so language we international, what that’s still talk and do are going the now probably to doing except while, started know as it's to where but we international low, in right as you be something overall we there members offering all and offering. when XXX,XXX a for within actually talk So Spanish a numbers

Paul Tarell

inside U.S. acquisitions. on outside done look the mentioned, XX% location, Jirka you and it Then English countries about U.S. for billing XX% it’s U.S., if by that's U.S. speaking dominated we've basis to outside revenue been the on as compared a where historical historically at based the

Western in So as in the there are as New Canada, top Australia, Zealand European aggregate. well

to, I German Jirka where non-U.S. But been our be side alluded we've Spanish historically online the a spent money and and English, on started year. French focus on things this of for mentioned as now as have So that's coming will

Jirka Rysavy

future obviously name, in we’re in And expand deal know geographical. can be so well. not you to basically language want the we all as the as you offerings kind more countries to with and It's it's going languages our we what of

Steven Frankel

in of quarter, and fourth in us annual of the – you toward other subscribers subscriptions? rates much insight Could how subscriber give as annual new in activity some any was renewal that you QX

Paul Tarell

$XX ARPU that to we month experienced of members. the first, generally from easier. this historically, rate on gone significantly has because below I’ll wanted mindful was that we've Yes, we just second it's and bring annual the through $XX. because start up new the the do we question some it’s between revenue monthly XX% so as the from shift customer The been get and higher to XX% the you that because year, a answer When XX% a percent of that, monthly sign

we've and number the that able positioning planned between selection to we’re do. way influence what want to So able do we of depending to been through XX% XX% and we the on the plans, the that

the renewals, shifted started we XXXX significantly to you October relates the volume recall it really to As plans. if higher we see to the in annual is mix when

we’re now dynamics on two and but annual well. have to renewal specific trends trends is retention to, right have willing I the as for continued cash to for beneficial we're I'm overall positive a percentage in and the plans that dynamics the flow and So annuals. indicative that the levels seeing continued higher renewals year of comment healthy don't be number

Steven Frankel

you. Okay great! Thank

Operator

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

Jirka Rysavy

report and early to you you quarter be when will our we thanks first you and will Operator? forward which speaking everyone Thank with Thank joining May. much. look for results, we very

Operator

to today's for XXXX call. report first look forward speaking our We with results. and investor And we analysts when our thank you everyone quarter joining

participation. your for you You may now disconnect. Thank

Gaia (GAIA) 1 Mar 222021 Q4 Earnings call transcript