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DATE
March 2, 2026, at 4:30 p.m. ET
CALL PARTICIPANTS
- Executive Chairman — Jirka Rysavy
- President — Kiersten Medvedich
- Chief Financial Officer — Ned Preston
- Chief Operating Officer — Jonathan Nyuta
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TAKEAWAYS
- Revenue -- $25.5 million for the quarter and $99 million for the year, representing 11% year-over-year growth.
- Gross margin -- 87.6% for the quarter and 87.1% for the year, up 100 basis points over the prior year.
- Free cash flow -- Improved by $1.1 million to $1.7 million in the quarter; $4.9 million for the year, $2.2 million greater than 2024.
- Net loss -- Reduced to -$0.5 million for the quarter (-$0.02 per share) and -$4.5 million for the year (-$8.00 per share).
- Operating cash flow -- $1.8 million for the quarter and $5.7 million for the year.
- Cash position -- $13.5 million at year end, rising from $5.9 million the previous year, with a fully available $10 million line of credit.
- Subscriber count -- Reached over 900,000, with 20,000 net adds in the quarter; management announced it will no longer report total subscriber number going forward.
- Direct channel focus -- Two-thirds of direct members have been with Gaia for more than one year; direct members deliver roughly double retention and revenue per user compared to third-party channels.
- Price increases -- Management indicated price hikes of 4%-17% for both new and existing customers in opt-out countries, phased throughout the year.
- AI integration -- AI now underpins code, content production, and creative workflows, with over 2 million prompts generated in the first 60 days of member beta access; expanded rollout includes personalized onboarding, recommendations, and enhanced search features.
- Igniton segment -- Igniton contributed $3.2 million after launch in the second half, and management expects the segment to grow faster than the core business but remain non-material in 2026.
- Profitability outlook -- Management expects to achieve profitability in Q4, with continued positive free cash flow and investment discipline.
- Leadership change -- Chief Operating Officer role transitioned to Jonathan Nyuta in January, following the contract conclusion of James Calhoun.
SUMMARY
Gaia (GAIA 2.75%) signaled a continued strategic transition away from legacy subscriber growth metrics, highlighting revenue, lifetime value, and earnings as central indicators. Management reaffirmed its guidance for double-digit revenue growth for the coming year, explicitly flagging a strong ARPU trajectory while indicating that new business lines like Igniton and AI licensing remain non-material to financial results in 2026. The company will use direct channel loyalty, direct platform innovation, and phased price increases as primary value drivers.
- Gaia disclosed that approximately 20% of current subscribers remain on third-party platforms, with ongoing efforts to convert these to direct memberships.
- Planned brand campaigns target further direct channel expansion, as management stated, "We will be coming out with really strong brand campaigns this year."
- The launch of enhanced online community features is set for late in the year, following ongoing testing and development.
- Gaia ended the year reporting eight consecutive quarters of positive free cash flow and maintains zero debt outside its campus mortgage, which was refinanced with a five-year extension in December.
- Guidance for gross margin stability was specific, as Ned Preston said, "We expect gross margin to remain at this level for fiscal year 2026."
INDUSTRY GLOSSARY
- ARPU: Average Revenue Per User — a measurement of the revenue generated per individual subscriber, used as a key indicator of monetization in subscription models.
- SVOD: Subscription Video On Demand — a streaming service business model where users pay a recurring fee for unlimited access to a video library.
- Igniton: Gaia's newly launched business segment, introduced mid-2025, focused on photonics-related products and services.
- Opt-out countries: Countries where existing subscribers are automatically enrolled in new pricing unless they actively choose otherwise, applied in Gaia's price increase strategy.
Full Conference Call Transcript
Jirka Rysavy: Good afternoon, everyone. Our first quarter was a good one. Our revenue increased to $25 million and up. $25,500,000 with a gross margin of 87.6%, which was above the 87.1% average for the year. Free cash flow increased $1,100,000 to $1,700,000. And our member count reached, for the first time, over 900,000. Revenue for the year grew 11% to $99,000,000, driven by increased member count and higher ARPU. Gross margin for the year improved 100 basis points to 87.1% from 86.1%. Our gross profit per employee increased to $827,000 from $730,000 during last year. Our free cash flow grew $2,200,000 to $4,900,000. Our cash position at the end of the year improved to $13,500,000 from $5,900,000 a year ago.
And Kiersten will now speak about business.
Kiersten Medvedich: Thank you, Jirka. Good afternoon, everyone. The past quarter marked an important milestone in Gaia, Inc.'s evolution as we continue building on our strong SVOD foundation while advancing toward a more integrated AI platform. We delivered a strong fourth quarter, growing revenue to $25,500,000 and exiting the year at an annualized run rate of approximately $100,000,000. Subscriber growth for the quarter remained solid, adding 20,000 members. For the year, we generated approximately $5,000,000 in free cash flow, and operating efficiency continued to improve with gross profit per employee increasing to $825,000, up from $730,000 last year. With disciplined management of operating expenses, we see a clear path to profitability in 2026.
Now before moving forward, I would like to briefly address a leadership update. In January, James Calhoun's contract reached its conclusion and we have transitioned his responsibilities to our new Chief Operating Officer, Jonathan Nyuta. Yon previously spent over five years in executive leadership roles at Gaia, Inc., from 2016 to 2021, before rejoining the company. He also served as Chief Product Officer at Babylon and Fabric, bringing additional operational and product leadership experience to Gaia, Inc. With the leadership transition complete, we are focused on execution and building momentum across the business. Moving forward, our direct channel remains central to our progress.
Approximately two-thirds of our direct members have been with Gaia, Inc. for more than one year, and that percentage continues to increase. That level of loyalty speaks to the strength of our community and supports long-term lifetime value expansion. With continued investment in AI and community, the direct platform delivers a differentiated experience, driving double retention and approximately double revenue per member compared to third-party distribution. This directly shapes our distribution strategy. Third-party platforms simply do not support the AI and community capabilities that define the next phase of Gaia, Inc. As a result, we are intentionally concentrating our capital and innovation focus on our direct platform.
Subscriber growth remains important; however, as this strategy progresses, beginning this quarter, we will no longer report total subscriber count as a primary metric. As our business matures, we believe revenue growth, free cash flow, lifetime value, and earnings provide a clear reflection of the health of our model, consistent with broader SVOD industry trends. Importantly, this strategic focus is translating into financial performance, and we expect to achieve profitability in the fourth quarter this year. With high gross margins and continued operating discipline, incremental revenue is increasingly flowing through to the bottom line, positioning Gaia, Inc. for sustained profitability and long-term value creation. This year, we will continue to integrate AI across the business.
AI is now embedded across major functions, from our code base to content production and creative workflows, improving speed, scalability, and efficiency. This is reflected in our continued improvement in gross profit per employee. Late last year, we launched a beta version of our AI guide to direct members, generating more than 2,000,000 prompts in its first 60 days. Early engagement data showed deeper session activity and increased repeat usage following interaction with the feature. Although still early, these trends reinforce our view that combining purpose-built AI with our predominantly exclusive content library enhances the direct member experience.
Now as rollout expands, we are extending AI-driven capabilities, including personalized onboarding, intelligent recommendations, enhanced search, and contextual guidance, further strengthening engagement and long-term member value. Given the strength of our direct member relationships and engagement trends, we are implementing a price increase that begins this quarter and will roll out progressively throughout the year. We are approaching this thoughtfully, and churn patterns are tracking favorably relative to the prior price increase. In closing, 2026 represents an important year for Gaia, Inc. We are entering it from a position of financial strength, strong performance, and a clear commitment to our members. We are staying focused on steady progress as we build a stronger company for the long term.
I will now turn the call over to Ned Preston for the financial details.
Ned Preston: Thank you, Kiersten. Revenues for the fourth quarter 2025 increased to $25,500,000 from $25,100,000 in 2024. Primarily driven by growth of our member base and increasing ARPU. Gross profit in the fourth quarter increased to $22,300,000 from $21,300,000 in 2024. Gross margin was 87.6% for the fourth quarter. Net loss improved to -$0.5 million, or -$0.02 per share, as compared to a net loss of -$0.8 million, or -$0.03 per share, in the year-ago quarter. Operating cash flow was $1,800,000 for the fourth quarter, with free cash flow improving $1,100,000 from a year-ago quarter to $1,700,000, representing the eighth consecutive quarter of positive free cash flow. Shifting to the 2025 full-year financial results.
Revenue for the year was $99,000,000 as compared to $89,300,000 in 2024, representing 11% growth on a year-over-year basis. Gross profit increased to $86,200,000 from $76,900,000 in 2024. Gross margin increased to 87.1% from 86.1%. We expect gross margin to remain at this level for fiscal year 2026. Loss for the year was -$4.5 million, or -$8.00 per share, as compared to a loss of $5,200,000, or -$0.22 per share, for 2024, with increased marketing spend and amortization and an operating cash flow of $5,700,000. For the year, free cash flow improved by $2,200,000 to $4,900,000 from $2,700,000 in the prior year, further reflecting ongoing operational discipline.
Our cash balance increased to $13,500,000 as of 12/31/2025, up from $5,900,000 a year ago, with a fully available $10,000,000 line of credit. 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. We have all of this with zero debt outside our mortgage on our campus, which we finalized with a new five-year extension in December. In summary, Gaia, Inc. has a strengthening balance sheet. We continue to manage costs carefully and maintain healthy margins while investing in the strategic areas that will create long-term value for our shareholders. That completes my summary.
I would now like to turn the call back over to Jirka for closing comments.
Jirka Rysavy: For the summary, in this year, we expect a similar annual revenue growth rate as we just had. This continuing growth of ARPU and focus on direct members, increasing gross profit per employee, and continued generation of positive cash flow. This concludes our remarks. We will now open for questions. Operator, please.
Operator: Thank you. At this time, we will open the line for questions from the company's publishing analysts. To ask a question, you may press 1 on your telephone keypad. To remove your question, you may press star and the number 2. Our first question comes from Ryan Meyers with Lake Street Capital. Please proceed.
Ryan Meyers: Hey, guys. Thanks for taking my questions. Kiersten, congrats on the great quarter and being able to deliver on both the ARPU and the member growth. So just thinking about the member growth that you have seen, can you speak to the willingness of your customers and their ability to continue to pay at these higher prices as you enact the price increases as you did in the fourth quarter, and then how you are thinking about that in 2026?
And as we think about 2026 and some of the initiatives that you have, and now Ignaton is obviously one of those, how should we think about the ability to potentially monetize that and then how you are thinking about that double-digit growth in 2026, maybe the balance across ARPU, and then you are not going to be giving the member number anymore, but just unpack that double-digit growth rate for us in 2026 and what we should be watching for.
Kiersten Medvedich: Sure. Our member growth in Q4 was driven by strong execution and typical seasonal strength within our core SVOD business. As far as our price increase, we are delivering more value to our members between rolling out our AI guide and a very strong content slate and our AI personalization. We have already rolled it out this quarter, and we are already seeing lower churn as compared to last year or the previous price increase.
Ned Preston: Yeah. Hey, Ryan. It is Ned. For 2026, our growth will really be coming mostly from our core business. In regards to the price increase, our shift to more of a direct member base, as well as just general momentum that we have, will be the driver, and we will be watching ARPU quite closely. We will, on top of that, have some of these new business initiatives. You just mentioned Ignaton, but we have some others that will add, and we have given some numbers in the past. But, really, at this point, on a nearly $100,000,000 revenue business, those are not material yet. The majority of our growth will come from our core business.
Jirka Rysavy: For the question about Igniton, Igniton did $3,200,000 in 2025. And, you know, we really introduced the products in the second part of the year. Otherwise, it was out by photonics. So it will grow. I do not want to speak to how fast, but it will probably grow faster than the core business. And I think that was all the questions. Yes. Good.
Ryan Meyers: Okay. Got it. That is it for me. Thanks for taking my questions, guys.
Operator: Thanks, Ryan. The next question comes from the line of George Kelly with ROTH Capital Partners. Please proceed.
George Kelly: Hey, everybody. Thanks. First, I just wanted to make sure I did not miss something. Did you reiterate the guidance for double-digit revenue growth in 2026? And then how much pricing are you taking? AI licensing, I was wondering if you could give any detail on the status, if that is still something you are contemplating, and, if so, what is the expected timing and materiality of any of those potential licensing deals? And then last one for me is just about community. Can you give more detail on the timing of different community initiatives and what you are most excited about with respect to the community offering in 2026?
Ned Preston: Yes, George. It is Ned. That is correct. We are reiterating the numbers that you have for 2026. No changes there.
Jirka Rysavy: Okay. What I said in the call will be roughly the same as this year for our guidance.
Ned Preston: We are between 4% and 17% price increases. And, again, that is to all new customers and to all existing customers in opt-out countries, similar to what we did in October of 2024. That really did not factor in Q4. We are still at the beginning stages of our AI and content licensing efforts. We are still going down that path, and we anticipate maybe a small pickup. But, again, these are one-time nonrecurring revenue streams. Anything that would hit here in 2026 would really drive a little bit of upside. The numbers that we have reiterated to you are really our core business, and we are not reliant on those really nonmaterial numbers from licensing. So nothing yet.
It is not something that we are going to stop pursuing, but it is not something that we are dependent on either.
Kiersten Medvedich: Okay. For community, we remain on track to launch the community experience later this year, and I will be very excited to talk about it when we are closer to launch. Right now, we are still building it.
Jirka Rysavy: It is kind of closer to do that. It means we might do different tests, but actually launching is closer to the end of the year. Yes.
George Kelly: Okay. Understood. Thank you.
Operator: The next question comes from James Sidoti with Sidoti & Company. You may proceed.
James Sidoti: Can you give us a sense of what percentage of your 900,000 subscribers are third-party subscribers and what the plan is to convert those subscribers to direct subscribers? And do you have specific things you could do to convert those 20% to direct members? Can you give us a sense of how you can accomplish that? And it sounds like you expect to continue to be free cash flow positive. Any plans for that cash? Are there acquisition targets out there? Do you plan a share buyback? Can you share what your plans are for that?
Ned Preston: Yeah. Hey, Jim. How are you? It is Ned. We have shared that in the past. We have, in the past, talked about trying to limit that to 20% from a number of third-party members as well as revenue attribution. We will work towards bringing that down a couple percentage points, to Kiersten's earlier points around a focus on first party. So for 2025, it was around that 20% level, and we will take it from there going forward.
Jirka Rysavy: We are going to plan to, per se, contact a lot. We will convert some percentage, but I think it is a valid channel. We just need to focus on marketing on our direct channels.
Kiersten Medvedich: Yeah. We will be coming out with really strong brand campaigns this year. So to let the broader audience know what the value proposition is coming to Gaia, Inc. as a direct member.
Ned Preston: Yeah. So, Jim, just to be clear, our plan is to continue to be free cash flow positive. We have been free cash flow positive the last eight quarters. But what Kiersten shared earlier is for us to be P&L positive by Q4 of this year. And really not to comment on any of those other specifics. We have a strong business model with our SVOD business. We are rolling out some of these new strategic initiatives, but we are not really ready to comment on any sort of acquisition or other elements at this time.
James Sidoti: Alright. Thank you.
Operator: At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Jirka Rysavy for his closing remarks.
Jirka Rysavy: Thank you, everyone, for joining, and we look forward to speaking with you when we report the first quarter results in early May. Thank you.
Operator: Thank you for joining us today for Gaia, Inc.'s fourth quarter 2025 earnings conference call. You may now disconnect.
