GAIA - Earnings call transcript Q4 2023

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Operator

Greetings, and welcome to Gaia Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Jirka Rysavy. Thank you.

begin. may You

Ned Preston

our but With go head I need will Jirka. quick, X-K over Any to sure, as at make statements do covered I not, Just so. sure in I'll forward-looking. just -- This we we read to any we CFO. ahead will here? hand is do If to we and that it's our real need want in Ned forward-looking end, read if that, and make that, it the I earnings release, need to and Preston,

Jirka Rysavy

afternoon, Thanks, Ned, and good everyone.

So about Gaia of member XXXX continue which milestone good XXX,XXX, our we XX% momentum. end count XXX,XXX over And finish benchmark, and is growth a we our XXXX. to our target build for grew expect towards the at revenue quarter at to increasing first

the driver per the $XXX,XXX, the quarter. increased gross key profit the up The cash of the of quarter $X.X from million year because flow improvements. $XXX,XXX base. to over revenue in employee That our in from quarter, over member Revenue ago $XX.X annualized quarter year for to or million last primarily in million growth grew XX% $XX.X to was our growth fourth

growing was increasing to during XXXX. by Member ending growth in the sequentially fourth X, XX,XXX quarter, year, the additional [indiscernible] December on

XXXX. during We accelerate member expect to growth the

unused fourth marketing and by flow year -- operating quarter our $X.X in of This net year. for increased because million to of $XX $XX.X last million, was to last net amortization. $X.X a but million $X.XX the of $X.X XXXX. increased $XX.X compared in quarter $X of increased million of as $X was Gross an in borrowing our 'XX which The $XX.X of million million is The the $X.XX the December was year. million But XX in increased to cash, by margin $X.X from million the million quarter, a credit, was -- end or with positive which $XX cash of compared profit $X.X or cash with at loss of million our cash net to the $X.X million, with free credit flow gross and spend line last line million. higher kind balance like $XX XX.X% on loss million cash line million

a industry part for year Revenue the $XX.X contraction, company still of million second million whole from post-COVID which recovering during to as the in XXXX. all compared by experimented was $XX subscriber the XXXX was was

the improved, even $X marketing million So I from from the loss for positive increased $X.X free why loss revenue year million XX.X% as increased cash our year, in million when $X.X of increased amortization, last the million $X.X spend flow we to the a by $X.X of because million marketing for mentioned, XX% to revenue. year spend of to

to efficiency annualized and was The cash exist bring free XX the the headcounts balancing had in previously which included by work of the flow work cut, in about would of a of beginning mandates about of which million expenses, was $X because from year we as kind home previously. elimination the finalized helped

to just ahead, to Ned to now growth quarter. will to our said, reported we first accelerate we the Ned. about you And results. XX,XXX from XXXX, Go more about as addition and in XX,XXX the about member member now in our expect the I expect net quarter during We double speak fourth

Ned Preston

growth XXXX. driven XXX,XXX the of you, Revenue members, Thank member of in increased growth by during Primarily, was the XXXX. count fourth the an XXX,XXX Jirka. year fourth to the December the from XXXX additional increased by million for sequentially XX,XXX Member Yes. members up our quarter during Hello. at fourth on with the million base. member growing ending from of XX, year, the $XX.X X% quarter $XX.X quarter this

member expect growth with continuing of further accelerate We during increases to our XXXX. ARPU

Gross million the in XXXX. was million, Net but of million $X.XX flow compared cash the and same flow million $X.X year line [ quarter $XX.X quarter free profit with of with in to cash up the million [indiscernible] negative year. the or in fourth quarter loss increased million Gross or -- share $X.XX X.X margin ] quarter by million operating $X.X per from per fourth was ago to improved higher in net $X $XX.X improved during year. to negative share loss as $X.X XX.X%, the $X last from amortization,

XXXX, cash The cash against of unused XX, $XX.X net or $X $XX credit of the million of cash million borrowing compared $X.X with an million, $X.X line of to balance was credit ago. of as of million with a December year million line

in full results. million. per or financial was share to to the million from of was With recovering increased cash XXXX. operating company the the the part $X.XX and negative $X.X Shifting for flow for negative a contraction industry-wide share or Loss loss XXXX amortization, $XX.X XXXX experienced per to post-COVID compared year however, negative of as the improved compared by $X.XX as million during year latter Revenue $X.X marketing $XX for million subscriber $X.X spend XXXX. as the was million year

from efficiency to flow of increased home from in free added annualized XX.X% it cash $X The offset flow XX was in $X.X finalized reduced elimination by year, the $X.X prior spending, year, work the $X.X the mandates. XX.X% negative revenue million beginning the as to of of headcounts helped included free because in previously marketing which improved million from cash to year. even by million, of million we For

reflecting for already and this are line or of presentation The impacts restate the industry. to changes with first of X in XXXX, consolidated or statements restatement in free None financial and quarters these XXXX decided the changes company the our some flow, the to release. the be making cash we revenue

while now growth member net double our we XX,XXX -- our free I the about additions cash XXXX CEO. Colquhoun, hand to sorry, to in in forecasting the James continuing expect Gaia's XXXX to from [indiscernible] of finishing fourth member quarter will We that, members first accelerate the positive to are XXX,XXX as during XXXX, first quarter I'm it With flow. XX,XXX over generate with quarter to of

James Colquhoun

you, Thank Jirka, Ned, everyone. and thank you, and hello,

with We for Jirka ARPU trend our on have marketing flow beginning executing of growth on As execution we continued on continued in mentioned, consecutive positive lowest basis. quarters the final our customer costs improvements of found and on acquisition annualized efficiency X our continued cash improving since some the XXXX of XXXX. an

direct-to-pay as the December, I've as initial my CEO our return in our move moving and paid centered directly this result on the Key improving with to from membership in marketing focus a spend. full and which on of success a by role had QX, Since of improving rollout been marketing into retention has members incentivizing on has to period efficiency plan. the trial our campaigns in to annual focus a to cash skip

increasing of our project at as booked revenue conscious life physical margin. [indiscernible] Additionally, access discounts. of Initiative and we the courses the show from XXX% of sales gross whilst experiences, members company's continued cash to has with aimed exclusive been transition selection Marketplace this facilitate flow is and the member-only retreats, This rollout where curated the can our gross cycle at goods improving a also to members Gaia supporting

on projects trained quickly over implemented also titles AI-powered to leveraging savings documentaries can the an we improvements media building episodes, relevant a the QX, Key unlocking our within transformational launching categorical films, and in search and the classes a now In efficiencies XX,XXX to stream. was at cost AI engine German. power transformational of most series French search their team product yoga metadata of from level. our transcripts, this and further queries organization and interest Spanish, English, library conscious level on to related or to enter uncover Members exclusive

to further look library we ways can into capitalize exclusive and continue we forward. content on as our move data We

focus leveraging to ways player transformative conscious These efficient grow use find as leading reach in world's capacity space our to AI Gaia on the audience continuing our to and target projects our more and community. the establishing our and media are

year XXXX for was a landmark also us.

X X produced side, across content X,XXX the and On over our we titles released events. live languages

our in of Beyond, original to [indiscernible], Season series civilization Healing Biohacking Ancient X top included Vibrations. releases the channeling with and XXXX called documentary a Bridge Dave Our programs original an

cash our our maintaining growing shortly. for forward of QX XXXX, focus our our positive improving I continue all it's time Moving since all will marketplace initiative, be rollout focus membership to flow know premium updating in we're looking on forward last renewed announcement, tier, execute improvements efficiency, been the numbers on our to and you And on our growth. to a ARPU marketing some

immersion new with of membership that, premium tier GioSphere Gaia+ As we rebrand Jirka at event And sneak a Events+ celebrated attendees a pass globe. close to our the record XX,XXX sold-out from I'll up. and stream to peak, Center Event back relaunched with quick and live from a across with unique new to our over a

Jirka Rysavy

Yes. Yes.

out, the which front I Ned I'd of to to the I close actually, close we like neglected read So before statements, to up. forward-looking then statement reach and

Ned Preston

go Okay. this through I'll quickly.

forward-looking well than statement, fact that as federal forward-looking forward-looking securities risks uncertainties. statements release, of statements but release meaning All historical and statements earnings statements the within X-K of the the other as the in said, laws. press I As the are contains involve

contemplate, believe, might, could, intend would should, this discussion, target, expect, they continue, may, in and intend, will ongoing future, the such similar identify to anticipate, strive, estimate, words potential, to expressions objective, as relate to used When us statements. plan, forward-looking hope, predict, project, we use and

and without financial regulation conditions, loss filings entertainment, to Securities with usage liability of service. maintenance of Internet-related compete effect key COVID-XX of of for retain content, us, threats product new programs third risks, including with results losses, it existing increased the and litigation include, of our coronavirus fluctuation our to related and our Commission. pandemic customer effectively to in provide the in U.S. ability risks of to response including and health other platforms acquisitions, service device changes, government general information of operating Forward-looking including Exchange uncertainties limitation, new we price expansion the failure plans our company's taxes, brand founders and the and future and our undertake, restatement future attract a members modes ability impact quarterly different statements adequate and members, for public reputation, economic trends, parties to customers Fluctuations and the of personnel, disruptions, initiatives, control of for streaming, website systems the consumer legal security service, statements,

the financial factors statements differ the and results qualification and the known outcome evaluation materially involve company's may actual from that and of of impact including other financial implied completion the statements, cause issued of by those and of Form identified risks, file previously is unanticipated statements These the unanticipated forward-looking required annual uncertainties in results company's to, December unknown of the to material the in the errors of the and adjustments possibility tax specific and additional able discovery including by its XX-K an or the XXXX, report completing to on of procedures there application accounting during company and the XX, principles the manner. for year ended information before

press of future the should update Also With risks it that, as SEC. filings going forward-looking these on those with views reliance to, additional We listed forward-looking and SEC, no We with company's not information. date risk you section which the back limited the statement the periodic forward-looking reflect the including, our of Jirka. filed obligation the statements, guarantee that and performance, factors place you report forth XX-K to undertake the I'm Risk company's in set no and Factors in pass annual in uncertainties of entitled to to any caution but Form only undue not release. as

Jirka Rysavy

Thank you.

would So interesting have thought. thing, the final it's I a

deliver view we planning So remarks. And for million now is cash to a XXXX, about line. we forward summary, indicators expect our the of $XX positive our with last I'd to for gross to growth And flow. for also open XX%, year million current X our free $X.X business ARPU. going grow increase cash in revenue continue on our started that the this as questions. and we our concludes of employee [indiscernible] in this our to And our like and call. to profit the continuing We're with And said

please. operator, So

Operator

[Operator with first comes Argento Capital Instructions] Markets. Street from Mark Our Lake question

Mark Argento

through growth? you kind you the -- little if growth, kind of [indiscernible] nice what's sub got us drew you walk short know the growth. growth, sub That growth between there the growth the bit referenced XX% ARPU a just ARPU multiple seeing balance on maybe current overall of but there straw And as and I some may kind get pricing? of you

Jirka Rysavy

about So to we're first quarter, is in first didn't now, kind corresponding. really the of, right going XX%, Q we're I that in for to growth probably think, be you the I revenue in start, it's which number but it, similar the probably gave or looking and we way. the calculate

for pricing, guys? the you And

James Colquhoun

you, Thank Mark.

So plan We're year. QX. it's our USD the on GBP pricing James EUR increasing and this also increasing here. our quarter, pricing pricing, in we the With of later end by

So this will increase ARPU.

growth. we we initiative, that cash increase help keep Additionally, our contribute, will third-party, maintain as of that continue ARPU foot blend the year also maintain a of to to year. flow growth growth to steady scale second-party with of direct we'll the to addition ARPU to on out And and subscriber be the gas the as continuing and we like us throughout Marketplace the and for well with mentioned this as members

plan. our that's So

Ned Preston

Yes. going get us more natural The add a And Ned. last is XXXX to this path. thing to Mark, on is would

and So growing XXXX has for modeled path growth as our member member us that here items. about Going model case. And that than revenue like for we are well talking higher X not excited as this will lot of and more past with about forward on back revenue for our others QX, the where more to us provided you've items in growth. ARPU in to the real talk And I already we a for modeled this aligned, the actual churn we out numbers our with more QX forward, predictive your about will have other growth, think and member and get be we was year, here But look XXXX, weeks detail other gate along we're results. excited as right?

Unknown Executive

we the the second the have We're to to Yes. part part there. we year, prices of you're and somewhere. than or fall it's increase faster probably as plan going members growing going in to mentioned, have second -- revenue somewhere in because, --

So expect that that. will of kind decouple I

you So already the revenue we we conversion, probably did see because but a revenue before. faster little [indiscernible] expect it once we

we So the the course back up of which kind of of far from you how some price increases people of kind we to the regular Probably so But statistics. we first messed in don't seasonality, COVID was have by our see know, also the prices. And increase second will obviously, quarter? the quarter first you lot how quarter a look, we'll to -- but raise industry, see definitely see the the fourth. the so on we do kind

So of kind it's expected.

going people, So also we to pushback. don't for much prices existing increase expect for only not We're new members.

Mark Argento

And a XXXX? -- that generated on in Any revenue should of small believe QX, in revenue. there can thoughts contributor know marketplace, thinking or you I a test continued [indiscernible] then we material little I that Or that? is . tested how -- be be on about

James Colquhoun

out with [indiscernible] Egypt X of to continued sold a Ancient top stage. Mark. from this had roll phase in series Yes, out. tour talent Civilization. we've in our Thanks, still at Yes. a We beta It's November

into to this a fashion. beyond I'll year. more where move we later rolling have to that you And serious out is report X the on and in in anticipate more As we'll QX,

Mark Argento

[indiscernible]? And with us the is the on maybe -- intertwined all? then just on are just Or that they refresh there I imposing Gaia+, at mean

James Colquhoun

in that, which consistently ARPU premium our with year. It's the to Jirka tier, initiatives, growth and Yes, week tier. go as throughout [indiscernible] start it's membership on said, subscriber our QX rebrand membership that tier is the detail Essentially, of the increase, our addition a our Marketplace will, And X to along more we grow ago. happened discussing it's call. our we'll premium and just be these in [indiscernible] which in see as price

happy now in have really in other. growth upwards each these So to our with place keep that and subscriber initiatives ARPU so we moving can conjunction growth

Mark Argento

a down. X acquire spend function of Is or to Or driving Last or to your to Facebook a really cost in what's . ability But kind buying that it's what of looks caught the for it the is flat terms you're like of kind basically officially? platforms? what [indiscernible] me. of other subscriber, acquire new

James Colquhoun

which saw X that There's a quarter beginning few these in of of bring of finding with acquisition of there, factors, we leads just or are them on the of on select fourth we landing prospects online since the improvements checkout acquisition customer of the most all, these new events conversion into cost. experience addition, at some quarter, [indiscernible] our -- for through Mark. of content improvements Gaia the A membership, an a provide XXXX. and in lowest and driven front QX In reduces costs lot the things levels before average a where of number pages inviting of conversion but the our

with a implemented we've monthly it's as us these been more plan. or helped as well of reporting on some really membership company. improvements Additionally, QX, And into campaigns, be a either as members And seeing continue we'll through invited these positive detail because for shortly. has we this for retention which paying roll we're incentivized in to annual upfront, into

Operator

next with from Our question comes Thierry Research. Tower Water Wuilloud

Thierry Wuilloud

Yes.

on talked give first in the bit I -- I XX,XXX But wondering covered Is something of most new? being you think questions. -- lower. for can I'm color the it Is driving a if what's it I'm -- seasonal? more about -- you've improvement there wondering quarter maybe us acquisition know membership the that is costs you that? [indiscernible]

James Colquhoun

CEO in how by to of highest understanding and this can just our that I the first focusing sort did pathways then board, business. the marketing way acquisition the retention my really can in our avatars which Jirka our customers has since there's Board previous our acquisition segment some from message where improvements focusing of our some well, foremost, efficiency of fine-tuning see answers the further of and on December, just of targeting to deeper say, we we coming market segments in X if further dialing been and key how marketing in COO on on on work to on stabilized continuing core on improve my COO a our he plus start focuses moved efficiency was side. I the as on has and to I'll I would

and more Thierry, And and we're I together, more as just think, come this we we're getting time, over seeing grow. data

So growth that in to And way. really meaningful to a signal. see we're a I'm strong back happy it's

Jirka Rysavy

I like marketing it was would outside lowering as say we the of I because in expectation that's kind my the market definitely come cost, because how and that's background his of big this with I and capital, it there's we a that. lot to position like this kind but merge personally is kind James of to wanted [indiscernible] of actually company

impact some a the So thing. the President the you I on lot impact the of done James' But of see work part to of think, actually year marketing prep work over second marketing. of, the first was our the it's last by

going tune. a fine So to it's more like be

-- fourth that we already -- to saw third quarter, again. think the it in growth already idea, -- I you accelerating keep such So potential. But quarter, so we because much have grow we the it's like started

that job. glad doing I'm So James his

Thierry Wuilloud

is that and you you that . live then you attend events Did leads to Or working? sign are invite that you them good using that Do new gives to them how attract members. up? How and you does work? say

James Colquhoun

So event. acquisition XX space into And us inviting very the content is the like some which prospects to and reducing was, your clearly, costs. our that in of directly for subscription the Thierry, into people people -- X this has [indiscernible] experience boosts we X front can our and been of this in an And also industry, content membership, annual businesses retention before your typically because a leads that most them so of for mentioned, Gaia terms some encouraging implemented the of putting inside largest effective last in strategies, churn of the year membership. I days

a So leapfrog to incentive. that is huge

open GaiaSphere see up had in stream And mentioned, XX,XXX in to great You're attendees. Event We to retarget and we're people was up to for reach we'll a March out. top recent XXXX these is And our attendees. ultimately, Center to we further launched the we be sold initiative acquisition live a did by and that event it's time, with funnel. open we able that that Jirka forward. to technology that membership limited move over And really that an leveraging the I of able as had that referring start unique down drive as people our will continue to more and scale costs hope

Thierry Wuilloud

that's a I for that pretty mean attendees XX,XXX unique live event, . amazing. event -- yes, X

James Colquhoun

Yes, happy the with result. we're very

Thierry Wuilloud

Yes.

first because Or some when you said about you quarter? So a well will understand -- that that give Gaia+ of report insights more bunch had us I questions I Gaia+? is on you the

James Colquhoun

QX and you let will That the do just know, be of when the last first to quarter. we within happened weeks few this only

intend just premium alongside will Marketplace it be and So year, tier, that continue to into -- of leaning initiatives. we our the our beginnings throughout our of scaling that

So grateful lot a of throughout year. done, on and the groundwork move the can we execution we as is I'm that focus

Thierry Wuilloud

is offerings some single you not there it any color you with X quite Gaia the every yet? share there? of -- us your open number us, of metrics the Are platform . to Marketplace give can on members maybe or that Can about

James Colquhoun

we're I'll some on marketplace. still providing beta in our Thierry, that be call. the a QX more on data

been we results, our prove we've just full to offering. continue doing rollout continues to the And testing to solidify so far, staging we're the as and our great membership

So QX on call. I'll more the know let you

Thierry Wuilloud

to as quick last been maybe those Okay. quickly for And question [indiscernible]? us you can Ned. -- some changes. give have then what changes Is Presentation a insights there

Ned Preston

in know, have Gaia they've over of look, thing I've hard lot June, mean, end your as people talked been people said, track XXX since same now on Yes. and you I Board industry. to -- investors well against as to similar and for of I've it's me No. asked the a the

as and the transitioned that first fact opportunity out all We we new in with as auditors, was And statements, through and QX looked previous in year at public due so we leaving the went on standards. closing align to auditors brought auditors our our industry fiscal to an of financial to really really, it well new space. my

And so in we really what shared the X-K.

restatements or of really our flow, earlier, free I and in I with But revenue As we'll that changes of be to cash what the we already is the or the existing talk none common potential as happy and speaking factors impact are release. reflecting investors, said I'm now, this same language around business.

Operator

have end closing session. I'd the for now question-and-answer We back call over like management the . to the of reached to turn comments.

Jirka Rysavy

thank results for look quarter early you our speaking you Thank we very Well, forward we when you, everyone, much. report May. first with joining, to in and

Operator

conference. concludes This today's

You for this we your may you and your thank time, disconnect lines at participation.

Gaia (GAIA) 27 Mar 242023 Q4 Earnings call transcript