Gaia Reports First Quarter 2019 Results
Revenues Increase 36% with Subscribers up 34%
BOULDER, Colo., April 29, 2019 (GLOBE NEWSWIRE) -- Gaia, Inc. (NASDAQ: GAIA), a conscious media and community company, reported financial results for the first quarter ended March 31, 2019.
First Quarter 2019 vs. Same Year-Ago Quarter
- 36% increase in revenues driven by 34% subscriber growth
- Customer acquisition costs as a percentage of revenue declined to 69% in the first quarter of 2019 from 109% in the year-ago quarter
- Loss from operations reduced to $6.4 million from $8.0 million
“We made meaningful progress on improving the ratio of our lifetime value to cost per acquisition over 3:1 during the quarter,” said Jirka Rysavy, Gaia’s CEO. “Last week we also announced the initial line-up of our live events to be held in our new event space on our campus.”
Paul Tarell, Gaia’s CFO, said: “The first quarter of 2019 represented consistent execution on the plan to maintain revenue growth of 30% and reduce our operating expenses as a percentage of revenue to reach EBITDA profitability by the end of September 2019 as planned.”
Gaia’s paying subscriber count increased to 562,000 on March 31, 2019, from 418,200 on March 31, 2018. Both counts give effect to the discontinuation of Gaia’s legacy Spiritual Cinema DVD club in the first quarter of 2019.
First Quarter 2019 Financial Results
Streaming revenues in the first quarter increased 36% to $12.5 million from $9.1 million in the year-ago quarter. This was primarily due to a 34% increase in paying subscribers versus March 31, 2018. Revenues before the effect of the discontinued operations increased to $12.9 million from $9.6 million.
Gross profit in the first quarter increased 36% to $10.9 million compared to $8.0 million in the year-ago quarter. Gross margin increased to 87.2% versus 87.1% in the year-ago quarter and Gaia expects to maintain gross margins at this level through 2019.
Total operating expenses in the first quarter increased to $17.3 million compared to $15.9 million in the year-ago quarter. This was primarily driven by increases in personnel-related costs over the past twelve months as Gaia has scaled operations to support higher revenues. Customer acquisition costs as a percentage of revenue declined to 69% in the first quarter of 2019 from 109% in the year-ago quarter. As a percentage of revenue, operating expenses declined to 139% in 2019 from 174% in 2018.
Loss from operations in the first quarter improved to $6.4 million from $8.0 million in the year-ago quarter.
Net loss from continuing operations in the first quarter was $6.4 million, or $(0.36) per share, compared to a net loss from continuing operations of $6.1 million, or $(0.40) per share, in the year-ago quarter.
As of March 31, 2019, Gaia had $22.3 million in cash. On April 26, 2019, Gaia refinanced its current line of credit set to expire in 2020. The new financing increased borrowing capacity to $17.0 million, fixed the interest rate, has recourse solely to Gaia’s corporate campus, and extended the maturity to 2022, with two one-year extension options and no prepayment penalty after two years.
Adjusted Summary Financial Information Reflecting Discontinuation of Spiritual Cinema DVD Club in Q1 2019
| Dec-15 | Dec-17 | Mar-18 | Jun-18 | Sep-18 | Dec-18 | ||||||||||||
| Subscribers as Reported | 133,000 | 364,500 | 421,000 | 466,000 | 515,000 | 550,000 | |||||||||||
| Less: Spiritual Cinema Subscribers | (4,800 | ) | (3,100 | ) | (2,800 | ) | (2,800 | ) | (2,600 | ) | (2,500 | ) | |||||
| Current Subscriber Count | 128,200 | 361,400 | 418,200 | 463,200 | 512,400 | 547,500 | |||||||||||
| (in thousands) | FY 2017 | Q1 2018 | Q2 2018 | Q3 2018 | Q4 2018 | FY 2018 | ||
| Revenues, net | $26,220 | $9,138 | $10,000 | $10,942 | $11,917 | $41,997 |
Conference Call
Gaia is hosting a conference call today, April 29, 2019, 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 9818875. 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 May 13, 2019 by dialing (844) 512-2921 (or (412) 317-6671 for international callers), passcode 9818875.
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
GAIA, INC.
Condensed Consolidated Balance Sheets
| March 31, | December 31, | ||||||
| (in thousands, except share and per share data) | 2019 | 2018 | |||||
| (unaudited) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash | $ | 22,299 | $ | 29,964 | |||
| Accounts receivable | 1,905 | 1,334 | |||||
| Prepaid expenses and other current assets | 2,534 | 3,192 | |||||
| Total current assets | 26,738 | 34,490 | |||||
| Building and land, net | 22,245 | 21,688 | |||||
| Media library, software and equipment, net | 29,436 | 27,623 | |||||
| Goodwill | 10,609 | 10,609 | |||||
| Investments and other assets | 12,741 | 12,741 | |||||
| Total assets | $ | 101,769 | $ | 107,151 | |||
| LIABILITIES AND EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable, accrued and other liabilities | $ | 7,797 | $ | 7,993 | |||
| Deferred revenue | 5,975 | 5,029 | |||||
| Total current liabilities | 13,772 | 13,022 | |||||
| Line of credit | 12,500 | 12,500 | |||||
| Deferred taxes | 164 | 164 | |||||
| Total liabilities | 26,436 | 25,686 | |||||
| Equity | 75,333 | 81,465 | |||||
| Total liabilities and equity | $ | 101,769 | $ | 107,151 | |||
GAIA, INC.
Condensed Consolidated Statement of Operations
| For the Three Months Ended March 31, |
||||||||
| (in thousands, except per share data) | 2019 | 2018 | ||||||
| (unaudited) | ||||||||
| Revenues, net | $ | 12,467 | $ | 9,138 | ||||
| Cost of revenues | 1,600 | 1,181 | ||||||
| Gross profit | 10,867 | 7,957 | ||||||
| Gross margin | 87.2 | % | 87.1 | % | ||||
| Expenses: | ||||||||
| Selling and operating | 15,722 | 14,517 | ||||||
| Corporate, general and administration | 1,593 | 1,411 | ||||||
| Total operating expenses | 17,315 | 15,928 | ||||||
| Loss from operations | (6,448 | ) | (7,971 | ) | ||||
| Interest and other income, net | 37 | 17 | ||||||
| Loss before income taxes | (6,411 | ) | (7,954 | ) | ||||
| Income tax benefit | — | (1,826 | ) | |||||
| Loss from continuing operations | $ | (6,411 | ) | $ | (6,128 | ) | ||
| Income (loss) from discontinued operations | (315 | ) | 93 | |||||
| Net loss | $ | (6,726 | ) | $ | (6,035 | ) | ||
| Income (loss) per share - basic and diluted: | ||||||||
| Continuing operations | (0.36 | ) | (0.40 | ) | ||||
| Discontinued operations | (0.02 | ) | 0.01 | |||||
| Basic and diluted net loss per share | $ | (0.38 | ) | $ | (0.39 | ) | ||
| Weighted-average shares outstanding: | ||||||||
| Basic and diluted | 17,890 | 15,364 | ||||||
|
As Historically Reported Before Discontinuation of Spiritual Cinema DVD Club |
For the Three Months Ended March 31, |
|||||||
| (in thousands, except per share data) | 2019 | 2018 | ||||||
| (unaudited) | ||||||||
| Net revenues | ||||||||
| Streaming | $ | 12,467 | $ | 9,138 | ||||
| DVD subscription and other | 456 | 477 | ||||||
| Total net revenues | 12,923 | 9,615 | ||||||
| Cost of revenues | ||||||||
| Streaming | 1,600 | 1,181 | ||||||
| DVD subscription and other | 71 | 91 | ||||||
| Total cost of revenues | 1,671 | 1,272 | ||||||
| Gross profit | 11,252 | 8,343 | ||||||
| Gross margin | 87.1 | % | 86.7 | % | ||||
Released April 29, 2019