Exhibit 99.1

 

Gaia Reports Third Quarter 2018 Results

Gaia Surpasses 500,000 Subscriber Milestone

BOULDER, CO, November 5, 2018 — Gaia, Inc. (NASDAQ: GAIA), a conscious media and community company, reported financial results for the third quarter ended September 30, 2018.

Highlights of Third Quarter 2018

 

Surpassed 500,000 paid subscriber milestone on September 13, 2018

 

66% subscriber growth year over year

 

Gross margin up 90 basis points to 87.1% year over year

 

Gaia’s paying subscriber count increased to 515,000 on September 30, 2018, up 66% from 311,000 on September 30, 2017 as Gaia expanded its geographical reach to over 185 countries.

 

Gaia recently launched its fourth channel, Alternative Healing. Gaia’s third channel, Transformation, which launched in fall 2016, now represents primary viewing for approximately one third of Gaia’s subscribers. The growth of the Alternative Healing channel is expected to follow a similar path as the Transformation channel since its launch.

 

Gaia announced a premium subscription offering, an annual subscription for $299 that includes the unlimited streaming of live events from Gaia’s new event center, opening at its corporate headquarters in the second quarter of 2019, and selected other events, as well as access to the existing Gaia online offering.

 

“We are continuing the year on a good track, achieving our subscriber growth target,” said Jirka Rysavy, Gaia’s CEO. “We expect the Alternative Healing channel to meaningfully contribute to our growth in the coming years.”

 

Third Quarter 2018 Financial Results

Total revenues in the third quarter increased 52% to $11.4 million from $7.5 million in the year-ago quarter. This was due to 56% growth in streaming revenues, which was driven by the 66% increase in paying subscribers versus September 30, 2017.

Gross profit in the third quarter increased 52% to $9.9 million compared to $6.5 million in the year-ago quarter. Gross margin increased 90 basis points to 87.1% from 86.2% in the third quarter of 2018 due to increased revenues and continued cost efficiency in Gaia’s content investments. Gaia expects to maintain gross margins at this level through 2018.

Total operating expenses in the third quarter were $20.4 million compared to $12.3 million in the year-ago quarter. The increase was due to the planned increase in marketing expenses associated with Gaia’s targeted subscriber growth, the launch of the new Alternative Healing channel and costs associated with the new premium subscription offering.

Net loss in the third quarter was $10.3 million, or $(0.58) per share, compared to a net loss of $5.2 million, or $(0.34) per share, in the year-ago quarter.

As of September 30, 2018, Gaia had $30.8 million in cash and an unused $13 million line of credit compared to $32.8 million in cash with $12.5 outstanding on our line of credit as of December 31, 2017.

 

1


Exhibit 99.1

 

Conference Call

Gaia is hosting a conference call today, November 5, 2018, beginning at 4:30 p.m. ET (2:30 p.m. MT). The conference call dial-in numbers are (888) 394-8218 (or (323) 701-0225 for international callers), passcode 9978336. Questions will be reserved for analysts and investors. If you have any difficulty connecting with the conference call, please contact Liolios at (949) 574-3860. Following the completion of today’s conference call, a replay will be available until November 19, 2018, by dialing (844) 512-2921 (or (412) 317-6671 for international callers), passcode 9978336.

About Gaia

Gaia is a global video streaming service and community that provides curated conscious media in four primary channels—Seeking Truth, Transformation, Alternative Healing and Yoga—to its subscribers in 185 countries with approximately 8,000 titles. Over 90% of its library is exclusive to Gaia, and approximately 80% of the views are generated by content produced or owned by Gaia. For more information about Gaia, visit www.gaia.com.

Forward-Looking Statements

This press release includes forward-looking statements relating to matters that are not historical facts. Forward-looking statements may be identified by the use of words such as “expect,” “believe,” “will,” or comparable terminology or by discussions of strategy. While Gaia believes its assumptions and expectations underlying forward-looking statements are reasonable, there can be no assurance that actual results will not be materially different. Risks and uncertainties that could cause materially different results include, among others, operating losses, general economic conditions, competition, changing consumer preferences, acquisitions, new initiatives undertaken by us, costs of acquiring new subscribers, subscriber retention rates, and other risks and uncertainties included in Gaia’s filings with the Securities and Exchange Commission. Gaia assumes no duty to update any forward-looking statements.

Contacts

Paul Tarell

Gaia, Inc.

(303) 222-3330

Paul.Tarell@gaia.com

 

Cody Slach

Liolios Investor Relations

(949) 574-3860

GAIA@liolios.com

 

 

2


Exhibit 99.1

 

GAIA, INC.

Condensed consolidated statements of operations

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

(in thousands, except per share data)

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

(unaudited)

 

 

(unaudited)

 

Net revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Streaming

 

$

10,942

 

 

$

7,025

 

 

$

30,080

 

 

$

18,290

 

DVD subscription and other

 

 

445

 

 

 

497

 

 

 

1,382

 

 

 

1,574

 

Total net revenues

 

 

11,387

 

 

 

7,522

 

 

 

31,462

 

 

 

19,864

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Streaming

 

 

1,386

 

 

 

958

 

 

 

3,857

 

 

 

2,541

 

DVD subscription and other

 

 

88

 

 

 

79

 

 

 

265

 

 

 

225

 

Total cost of revenues

 

 

1,474

 

 

 

1,037

 

 

 

4,122

 

 

 

2,766

 

Gross profit

 

 

9,913

 

 

 

6,485

 

 

 

27,340

 

 

 

17,098

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and operating

 

 

18,908

 

 

 

10,784

 

 

 

47,971

 

 

 

31,812

 

Corporate, general and administration

 

 

1,454

 

 

 

1,528

 

 

 

4,205

 

 

 

4,321

 

Total operating expenses

 

 

20,362

 

 

 

12,312

 

 

 

52,176

 

 

 

36,133

 

Loss from operations

 

 

(10,449

)

 

 

(5,827

)

 

 

(24,836

)

 

 

(19,035

)

Interest and other income, net

 

 

120

 

 

 

62

 

 

 

297

 

 

 

150

 

Loss before income taxes

 

 

(10,329

)

 

 

(5,765

)

 

 

(24,539

)

 

 

(18,885

)

Income tax benefit

 

 

 

 

 

(131

)

 

 

(1,826

)

 

 

(760

)

Loss from continuing operations

 

 

(10,329

)

 

 

(5,634

)

 

 

(22,713

)

 

 

(18,125

)

Income from discontinued operations, net of tax

 

 

 

 

429

 

 

 

 

 

429

 

Net loss

 

$

(10,329

)

 

$

(5,205

)

 

$

(22,713

)

 

$

(17,696

)

Income (loss) per share-basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.58

)

 

$

(0.37

)

 

$

(1.33

)

 

$

(1.20

)

Discontinued operations

 

 

 

 

 

0.03

 

 

 

 

 

 

0.03

 

Basic and diluted net income (loss) per share

 

$

(0.58

)

 

$

(0.34

)

 

$

(1.33

)

 

$

(1.17

)

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

17,890

 

 

 

15,161

 

 

 

17,048

 

 

 

15,157

 


3


Exhibit 99.1

 

GAIA, INC.

Condensed consolidated balance sheets

 

 

 

September 30,

 

 

December 31,

 

(in thousands)

 

2018

 

 

2017

 

ASSETS

 

(unaudited)

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash

 

$

30,813

 

 

$

32,778

 

Accounts receivable

 

 

1,483

 

 

 

1,055

 

Prepaid expenses and other current assets

 

 

3,166

 

 

 

3,082

 

Total current assets

 

 

35,462

 

 

 

36,915

 

Building and land, net

 

 

20,324

 

 

 

17,028

 

Media library, software and equipment, net

 

 

25,825

 

 

 

20,387

 

Goodwill

 

 

10,609

 

 

 

10,609

 

Investments and other assets

 

 

12,743

 

 

 

12,040

 

Total assets

 

$

104,963

 

 

$

96,979

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable, accrued and other liabilities

 

$

8,239

 

 

$

16,848

 

Deferred revenue

 

 

4,527

 

 

 

3,316

 

Total current liabilities

 

 

12,766

 

 

 

20,164

 

Deferred taxes

 

164

 

 

 

663

 

Total equity

 

 

92,033

 

 

 

76,152

 

Total liabilities and equity

 

$

104,963

 

 

$

96,979

 

 

 

 

 

 

4