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DATE
Monday, Nov. 3, 2025, at 4:30 p.m. ET
CALL PARTICIPANTS
- Executive Chairman — Jirka Rysavy
- President — Kiersten Medvedich
- Chief Financial Officer — Ned Preston
- Operator — Sachi [Operator provides limited content and is included due to material participation in Q&A management]
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TAKEAWAYS
- Revenue -- $25 million for the quarter, representing a 14% year-over-year increase, with a $100 million annualized run rate.
- Gross margin -- 86.4%, up 30 basis points from 86.1% in the prior-year quarter.
- Member count -- 883,000 total members at quarter end, including direct and third-party channels.
- ARPU strategy -- A recent $2 price increase contributed to revenue growth, but resulted in lower member growth; management plans a similar $2 increase in mid-April 2026.
- Gross profit per employee -- $814,000 annualized, up from $703,000 in the prior-year quarter, contributing to improved free cash flow of $900,000.
- Cash balance -- $14.2 million as of quarter end, rising from $4.4 million the year prior, with a fully available $10 million line of credit, renewed on improved terms.
- Free cash flow -- $900,000 for the quarter, marking the seventh consecutive quarter of positive free cash flow.
- Ignition valuation -- Recent fundraising values Ignition at about $100 million, with the value of Gaia ownership above $70 million.
- Ignition revenue -- Generated $700,000 from Gaia marketplace sales; annualized run rate is projected around $3 million.
- AI guide launch -- AI guide launched in beta to direct members; management reports "encouraging" engagement and usage trends ahead of full rollout.
- Content investment -- Content spend is rising approximately 23% over the prior year.
- Cash flow trend -- Free cash flow totaled $3.2 million for the first nine months of 2025, up from $1.8 million in the same period last year (first nine months of 2024).
- Churn and revenue by channel -- Churn is nearly twice as high, and revenue per subscriber is roughly half on third-party platforms compared to direct memberships; management will prioritize growth in higher-ARPU direct members.
- Credit line -- Credit line renewed for an additional three years with a lower interest rate and broader permitted use, further enhancing liquidity flexibility.
- Profitability outlook -- Net loss of $1.2 million, or $0.05 per share, unchanged from the prior-year quarter.
SUMMARY
Gaia (GAIA 6.93%) management confirmed a strategic focus on integrating AI-driven engagement and member retention within the core direct-to-consumer platform, while reducing dependency on lower-value third-party channels. Ignition is projected to contribute meaningfully to revenue with a high-margin profile, though full annual run rates are anticipated beginning in 2026. The company is investing in both community platform development and increased proprietary content as key growth initiatives for the coming year.
- President Medvedich stated, "Session depth and repeat usage are both trending upward," for the launched AI guide, indicating rising engagement.
- Executive Chairman Rysavy emphasized, "Our plan is to go, like, probably somewhere in mid-April time for another $2" increase to core subscription pricing, signaling confidence in ARPU expansion despite expected member churn impact.
- Management noted, "churn is more than double of ours, and the revenue, what we book, is half of ours," on third-party channels, clarifying rationale for a direct-member growth focus.
INDUSTRY GLOSSARY
- ARPU: Average Revenue Per User; a key SaaS and digital platform metric measuring per-subscriber income, used to evaluate pricing power and customer value.
- SVOD: Subscription Video on Demand; refers to streaming services with recurring payment models, central to Gaia's direct-channel strategy.
Full Conference Call Transcript
Jirka Rysavy: Good afternoon, everyone. During the third quarter, we grew our revenue 14%, and our gross margin improved an additional 30 basis points to 86.4% from 86.1% a year ago quarter. The member count at the same period grew to 880,000. A year ago, we raised our subscription prices for most of our members by $2. So while the losses from the price increase resulted in lower member growth, our revenue grew to a $100 million run rate or $25 million during the quarter, up from $22 million in the last year quarter. Our annualized gross profit per employee increased to $814,000, up from $703,000 in the year-ago quarter, which is also obviously driving further improvement in our free cash flow.
The value of our subsidiary, Ignition, using pricing from its recent fundraising, is about $100 million, valuing Gaia, Inc.'s two-thirds ownership interest in Ignition at above $70 million. Ignition's products are now available on Gaia, Inc.'s marketplace. You can get more information on ignition.com. The Gaia, Inc. cash position improved significantly to $14.2 million from CHF 4.4 million a year ago. Now Kiersten will speak more about business. Kiersten?
Kiersten Medvedich: Thank you, Jirka. So last week marked an important step in Gaia, Inc.'s evolution as we continue moving from a traditional SVOD model to an AI-forward company. One that brings together conscious media, community, and technology. We launched our new AI guide in beta to our direct members, and the early results have been very encouraging. Session depth and repeat usage are both trending upward, confirming what we believed from the start that Gaia, Inc.'s curated content library paired with our customized AI creates a truly distinctive and engaging experience. Now, as we move toward full rollout, this experience will expand to include personalized guidance, contextual recommendations, and integrated chats across both app and web.
Beyond helping members discover content that fits their evolving interests, our AI acts as a research companion, helping members find what's relevant to them faster while keeping the experience fresh and evolving. This direction reflects our commitment to grow in step with our members and the world around us, integrating intelligent technology in service of human potential, and positioning Gaia, Inc. at the leading edge of how people connect, how they learn, and transform in an increasingly digital world. AI will also play a central role in how we express our brand. It will become an integral part of our marketing, helping people discover Gaia, Inc., understand our mission, and meet them where they are on their spiritual path.
In addition to AI, we're actively developing Gaia, Inc.'s community platform. While we're not ready to share specifics yet, we plan to launch next year. Our vision is for members to explore, learn, transform, and then naturally find their community of like-minded individuals to learn and share together. We expect 2026 to be a key transition year for us, focused on advancing the technology that will deliver outstanding value to our direct gaia.com members. This work will position Gaia, Inc. for the next stage of growth as we fully integrate content, community, and AI into a seamless, cohesive experience. As part of this evolution, we're also reframing how we define success.
Traditional viewership metrics no longer capture the actual depth of connection we're building. With the intersection of AI, content, and community, engagement actually becomes the true measure of value. This shift better reflects our mission, our technology, and the growing resonance within our direct member base. That being said, our third-party members don't have access to these new AI or community features as they're not supported on external platforms. And with churn nearly double on the larger platforms and revenue per subscriber roughly half compared to our direct members, we believe our focus is better spent on deepening those direct member relationships. So going forward, we'll prioritize revenue and members with higher ARPU.
Today, about two-thirds of our direct members have been with Gaia, Inc. for more than a year, and that number continues to grow. This ongoing loyalty strengthens our foundation and positions Gaia, Inc. for greater long-term profitability. Now over to Ned to talk about the financials.
Ned Preston: Thank you, Kiersten. For 2025, Gaia, Inc. delivered revenue of $25 million, up from $3 million or 14% year-over-year, driven by growth in both ARPU and member count. Total members increased in Q3 to 883,000. Gross profit increased 14% to $21.6 million from $19 million in 2024, with gross margins expanding to 86.4% up from 86.1%. Net loss was negative $1.2 million or negative $0.05 per share versus negative $1.2 million or negative $0.05 per share in 2024. Operating cash flow was $300,000 with free cash flow of $900,000, representing the seventh consecutive quarter of positive free cash flow and further reflecting ongoing operational discipline.
For the first nine months of 2025, free cash flow was $3.2 million, up from $1.8 million during the same period of last year. Our cash balance increased to $14.2 million as of 09/30/2025, up from $4.4 million a year ago, with a fully available $10 million line of credit. In July, Gaia, Inc. also renewed its credit line for an additional three years, with improved terms, including a lower interest rate and a wider range of permitted use. The company's financial position continues to strengthen with double-digit revenue growth, improving margins, and a growing cash balance through accelerating cash flow generation.
And we have all of this with zero debt outside of the mortgage on our campus, which we are in the process of renewing by the end of this year. In summary, we continue to manage costs carefully and maintain healthy margins while investing in the strategic areas that will create long-term value for shareholders. I will now turn the call back over to Jirka.
Jirka Rysavy: So for the summary, we expect our annual growth rate for this year to be in low double digits. And similar probably revenue growth for the next year. This continually increases our ARPU and obviously generates a free positive cash flow. So this concludes our remarks. I would like to open the call for questions. Operator, Sachi?
Operator: Thank you. At this time, we'll open the line for questions from the company's publishing analysts. Press star one on your telephone keypad. A confirmation tone will indicate your line is in the queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment, while we poll for questions. The first question is from Ryan Myers from Lake Street Capital. Please go ahead.
Ryan Myers: Guys, thank you for taking my questions. First one for me, you know, you called out some loss from the customers on price increases. So just curious what the churn number was during the quarter and kind of how that compares to what churn is historically?
Jirka Rysavy: Well, for the price increase, you can roughly figure out you lose about half of the price increase as additional churn because you increased prices. So there's definitely, you know, some people, they kind of respond to it. But you get the delta about half of it. We kind of view it positively. That's where we kind of expect it, and based on their experience, we probably do another price increase next year.
Ryan Myers: The churn
Jirka Rysavy: we don't really use a specific number because we try to do it, and everybody does it differently. Like, for, let's say, Netflix, if the customer comes back in ten months, it's the same customer. For us, it's a different customer. And pretty much 80% of losses happen within six months. So the numbers on their own don't really make sense.
Ryan Myers: Okay. Fair enough. And then, you know, with the AI offer that you guys talked a little bit about, you know, how do you think that changes the core subscription model? Any additional details on that, I think, would be helpful.
Kiersten Medvedich: Well, I think, you know, keep in mind, it's still in beta. But, you know, it is considered a conversational experience that will connect our members with the right content, and the interaction will now be measured as an engagement. So our feeling is ARPU will increase and so will churn decrease.
Ryan Myers: Okay. Got it. And then lastly, did you guys see any significant growth in the Ignition offering on the actual Gaia, Inc. marketplace?
Jirka Rysavy: Well, we didn't really launch Ignition on the Gaia, Inc. marketplace till after Labor Day. So we started, I think, selling it, like, so we have only, like, three weeks in a quarter. And so it went pretty well. Obviously, there is no cost to that. We probably sold it about $300. But it was also a new item. So, but, you know, so it's still for it's the kind of stabilized all the lines. We find different outside fulfillment houses and stuff, and they will probably continue till the end of the quarter. Fourth quarter. So I don't expect really push revenue in Ignition for this year until next year.
Ryan Myers: Okay. Got it. Thank you for taking my questions.
Ned Preston: Thanks, Ryan.
Operator: The next question is from George Kelly from ROTH Capital Partners. Please go ahead.
George Kelly: Hey, everyone. Thanks for taking my questions. George. Hi. First, just a couple of follow-ups from the prior questions. It sounded like you're a little uncertain about taking pricing core subscription pricing. Early next year. Did I hear that right? Is that still the plan? And if so, how much do you plan to take?
Jirka Rysavy: Our plan is to go, like, probably somewhere in mid-April time for another $2.
George Kelly: Okay. Okay. Understood. And then there was also a discussion on the call about with your AI features really prioritizing the direct channel. How should we think about that as far as, you know, partner marketing spend and you're just allocating sort of marketing resources behind partners, like, is there gonna be some churn or some slower growth by channel next year as you sort of really emphasize the direct? And how is that gonna I mean, how are you thinking about subscriber growth next year with those kinds of changes?
Jirka Rysavy: Well, you know, if we're going to raise prices, it's typically the most of the hit you take the month you introduce it because all the monthly, which is, like, half of the business monthly subscription compared to annual, it will kind of decide if they will, you know, continue or not. So that's typically, you know, I said about if we don't raise the prices, the revenue growth and member growth is as a percentage above the same. If you do a price increase, the member growth is maybe half of the revenue growth. So you're going to I assume that's what we saw this year. That's what we're going to see next year.
Kiersten Medvedich: You know? And also, we continue to see challenges with advertising efficiencies and targeting on our third-party platforms, which we can't fully control. So our focus will remain on sustainable member growth and not short-term volume.
Jirka Rysavy: Okay. Yes. And then understand that because if you have to go to a third party, the churn is more than double of ours, and the revenue, what we book, is half of ours. So it's really what we need one person for the same revenue, just one person on as our direct rather than four on outside parties. So it's just you know, that's what she meant by the higher value members.
George Kelly: Okay. Understood. And then still on the core business, as you improve the sort of curation tools in your discovery, I know it's still early days, but you're discovering sort of what people are most interested in and wanting and learning about. Do you expect to raise your content spend, or do you think it's in a good place where it sits now?
Kiersten Medvedich: No. We are raising our content spend about 23% from the prior year, so we will continue to make more content.
Jirka Rysavy: So next year I'm just thinking of our numbers. I mean, next year, like, what's a good kind of ballpark? Maybe you're not ready to give that, but how should we think about content spend next year?
Kiersten Medvedich: We're not ready to give that, but I could say it's 23% more. No. I mean, in the rough figure because we're going to right now look at engagement. Which includes community and AI.
Jirka Rysavy: But if you would strip that and then just look at pure content investment, probably about $15 million.
George Kelly: Okay. Okay. And then just the last one for me, just back to Ignition. I thought that the official big launch was in September. It sounds like maybe you're pushing it out a little bit. Like, what have you seen? Did you put much marketing funds behind it in September? Or is there any more detail you can give there? And that's all I had. Thank you.
Jirka Rysavy: We all we did was put it in the Gaia, Inc. marketplace and sent an email to Gaia, Inc. members. We didn't do any marketing push, and we probably won't do anything till, like, our Christmas. Till our Christmas time.
George Kelly: Okay. Thanks.
Operator: The next question is from James Sidoti from Sidoti and Co. Please go ahead.
James Sidoti: Hi. Good afternoon. Thanks for taking the question. Jirka, I think I heard you say the Ignition revenue was about $300k. Is that for the month or for the quarter?
Jirka Rysavy: No. There was just the Ignition product Gaia, Inc. marketplace. The revenue for the quarter was I think one. No. That's Well, that's from the product. Yeah. Probably $700k.
James Sidoti: So once this is fully launched, do you think this is a $3 million a year product?
Jirka Rysavy: We expect to be pretty much close to it in this year.
James Sidoti: Close to $3 million in 2025?
Jirka Rysavy: Well, yes.
James Sidoti: Okay. So you Hey, Jim. I can get into it in a little more detail. Actually, for this year, it's gonna be on a run rate of around $3 million. But for this year, because we launched it kind of two-thirds of the way through the year, we'll finish this year about half you know, about approximately half of that. Heading into 2026, I think that's when you would expect the higher number.
James Sidoti: And what will the impact on gross margin be?
Jirka Rysavy: It's run right now about 82%, so it's slightly below the 86% Gaia, Inc. does.
James Sidoti: Okay. But still a pretty healthy gross margin.
Ned Preston: Yes.
James Sidoti: Okay. Alright. And in terms of the AI, can you just detail how do you monetize that? Is that gonna be greater member retention or help support the price increases? Know, what is the ultimate goal of the AI investment?
Jirka Rysavy: Well, there are several of them. But I kind of believe it would have pretty good engagement on its own. As we see some people really spend more time on search through the AI. Spent a lot of time incorporating a lot of, you know, ancient books and videos from our side, so it's quite different than other AIs could be. So it's really proprietary. And then it will really function also as a search for Gaia, Inc. for all the videos. So if you ask any questions, we will recommend videos. Which we have on the topics. So that's really the kind of main function and based on early indication, it was a good call.
Because the engagements are already very good and increasing. And they launched it like a week ago. Yeah.
James Sidoti: Right. Thank you.
Jirka Rysavy: Thanks, Jim.
Operator: At this time, this concludes our question and answer session. I'd like to turn the call back over to Mr. Rysavy for his closing remarks.
Jirka Rysavy: Well, thank you, everyone, for joining, and we'll look forward to speaking with you when we report our fourth quarter results, which will be in early March next year. Thank you.
Operator: Thank you for joining us today for Gaia, Inc.'s third quarter 2025 Earnings Conference Call. You may now disconnect.