Gaia, Inc. Q4 FY2025 earnings call

• Focus on direct channel: Approximately two-thirds of direct members have been with Gaia for over one year, and the company is concentrating capital and innovation on the direct platform as third-party platforms don't support AI and community capabilities. • AI integration: AI is embedded across major functions, with a beta version of the AI guide launched, generating over two million prompts in 60 days, and further AI-driven capabilities like personalized onboarding and intelligent recommendations being extended. • Price increase: Implemented a price increase starting this quarter, with churn tracking favorably relative to prior increases. • Leadership transition: James Colquhoun's responsibilities were transitioned to Yonathan Nuta, who previously had executive leadership roles at Gaia.

Fourth quarter revenue was $25.5 million. Full-year 2025 revenue was $99.0 million, representing an 11% year-over-year growth. Fourth quarter gross margin was 87.6%, and full-year gross margin improved to 87.1% from 86.1% the prior year. Free cash flow in the fourth quarter was $1.7 million, which was a 1.1 million increase from the prior year's fourth quarter. Full-year free cash flow improved by $2.2 million to $4.9 million. Member count reached over 900,000 for the first time.

• Reiterated double-digit revenue growth expected for 2026, with growth primarily coming from the core business. • Expect gross margin to remain at the 87.1% level for fiscal year 2026. • Anticipate achieving profitability in the fourth quarter of 2026. • Growth in 2026 to be driven by ARPU growth and progress in the core business and new initiatives like Igniton (though Igniton's growth is not yet material to the majority of revenue).

Q: Ryan Myers asked about customers' willingness to pay higher prices and 2026 growth, including Igniton.

A: Kirsten and Ned responded that the price increase is driven by added value from AI guide, content slate, and AI personalization, and growth in 2026 will mostly come from the core business with focus on ARPU and some contribution from new initiatives like Igniton.

Q: George Kelly asked about 2026 revenue growth guidance, pricing, AI licensing, and community initiatives.

A: Ned confirmed double-digit revenue growth guidance for 2026, pricing is between 14% and 17% for new and existing customers in opt-out countries, AI licensing is in early stages with no material impact expected in 2026, and the community experience is on track to launch later in 2026.

Q: James Sedoti asked about third-party subscribers percentage, converting them, and plans for cash.

A: Ned said third-party members were around 20% in 2025 and the focus is on marketing the direct channel with brand campaigns, and the plan is to remain free cash flow positive but no comment on acquisitions or share buybacks at this time