GAIA, INC Q1 FY2025 earnings call

• Q1 was a solid start with double-digit revenue growth and margin expansion. - Accelerated development of generative AI product and Gaia Community platform following $8 million offering. - On track to launch Gaia's conscious AI companion by early 2026. - Fully embracing AI-first strategy, integrating AI into various workflows. - Marketplace revenue lower in Q1 due to Egypt travel advisory, pivoted to Peru tours. - James to transition CEO role to Kiersten Medvedich at end of Q2, focusing on business development. - Closed $8 million common stock offering in February, allocating proceeds to AI development and community initiatives.

In Q1 2025, Gaia's revenue was $23.8 million, up $2.5 million or 12% year-over-year. Gross profit increased 15% to $20.9 million, with gross margin expanding to 87.8% from 85.4% in the year-ago quarter. Member count grew to 867,000. Annualized gross profit per employee increased to over $800,000, up from $680,000 a year ago. Revenue contribution: Revenue increased 12%, gross profit 15%, gross margin improved from 85.4% to 87.8%.

• Expect gross margin for remainder of the year to be in the range of 86% to 87%. - Anticipate marketplace revenue to perform in line with expectation in the back half of the year. - Community platform expected to have alpha tested in latter part of 2025 or sooner, aiming to launch beta soon and likely end of Q1 2026.

• U.S. Level 3 travel advisory for Egypt in October 2024 impacted marketplace revenue as Egypt trips were heavily weighted in first half of the year, leading to 30% decline in bookings and tourist travel at 45% of pre-conflict levels.

Q: Could you get a quick update on Igniton?

A: We're going to introduce the brand in Biohacking Conference in end of this month and it would start to be available after July 4.

Q: Did I hear right a transition at the end of Q2?

A: Yes, Kiersten Medvedich will step into the CEO role at end of Q2.

Q: Can you talk a little bit more on how you see AI specifically kind of rolling out on the platform?

A: Members will be able to interact with a generative AI within current product, with a conversational connection with the generative model trained on our dataset.

Q: Were you guys striking any deals with any of the large hyperscalers to use any of your content at this point?

A: Not at this stage, but we're talking about content and technology licensing.

Q: Where are you in terms of the platform today in terms of new either content or programs?

A: We've been starting on development side, anticipate having an alpha to test in latter part of this year or sooner and aiming to launch beta as soon as possible.

Q: Was the business that you discontinued in the quarter accounted for? And how much revenue did that business contribute to 4Q?

A: That represented $1.2 million of revenue last year, and that has been removed, with a line of discontinued business in our 10-Q