Gaia, Inc.

Good afternoon. Welcome to GAIA's 3rd Quarter 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. Joining us today from GAIA are Yerkar Asave, Executive Chairman James Colhorn, CEO, and Ned Preston, CFO. After the speaker's presentation, there will be a question and answer session. Before we begin, GAIA's management team would like to remind everyone that management's prepared remarks contain forward-looking statements and management may make additional forward-looking statements in response to your questions, including but not limited to statements of expectations, future events or future financial performance. These statements do not guarantee future performance and therefore undue reliance should not be placed upon them. Although we believe expectations are reasonable, Gaia's management undertakes no obligation to revise any statements to reflect changes that occur after this call. Actual events or results could differ materially. These statements are based on current expectation of company's management and involve inherent risks and uncertainties, including those identified in the risk factor section of Gaia's latest annual report on Form 10-K filed with the SEC. All non-GAAP financial measures referenced in today's call are reconciled in the company's earnings press release to the most directly comparable GAAP measure. This call also contains time-sensitive information that is accurate only as of the time and date of this broadcast, November 4, 2024. Finally, I would like to remind everyone that this conference call is being webcast And a recording will be made available for replay on Gaia's investor relations website at ir.gaia.com. I will now turn the call over to Gaia Executive Chairman, your current survey. Thank you and over to you.

Good afternoon, everyone. During the third quarter, which is seasonally slow, we grew our revenue at a Similar rate as the first part of the year at 10%. Gross profit increased 11% with gross margin improving to 86% from 85.2 at the year above quarter. Member count grew at the same period by 7%. The third quarter was our sixth consecutive quarter of positive operating and free cash flows. which improved about $1.5 million during the quarter this year. Over the last few months, we raised for the first time in our history our subscription prices for all members by at least $2. While the initial losses from the price increase kept our member count for the quarter flat, we expect the price increase will push our revenue up from the current $22.2 million in this quarter to almost $24 million during the fourth quarter. And James will now speak more about other advances in the business.

Hello, everyone, and thank you, Yurko. As mentioned, for the first time in Guy's history, we began the implementation of a price adjustment for our legacy members, as we have typically grandfathered members on legacy or old pricing. Following a successful pilot in the UK in Q3, we expanded this initiative to include our third-party platforms at the end of this quarter. While the decision temporarily impacted our member count, it is set to create a strong uplift in revenue. And we are optimistic that members will return to growth in Q4, and it will close out the year with over 850,000 subscribers. At the start of Q4, we began price increases for our direct members on legacy pricing, And early data suggests that this is already surpassing our expectations. This is a very encouraging indicator for revenue growth momentum as we move into 2025. Looking ahead to Q4, we expect our first full quarter of revenue contributions from Gaia Marketplace. And as Marketplace scales alongside our new pricing strategy, we anticipate gross margins to rise above 86%, a powerful improvement in our financial profile. Additionally, our marketing team's continued focus on attracting more annual members at signup, together with increases in our tenured member base, has resulted in a substantial improvement in retention over the past 12 months. This stabilized long-term member base sets us up for even stronger strategic positioning as we roll out the new pricing for legacy members. Q3 also highlighted the impact of our live events and premium membership tier. We hosted two Gaiosphere events, including our largest ever ancient civilization conference and our sold-out Gene Keys event. We're thrilled to see even more enthusiasm in Q4 with a recent sold-out channeling event, and coming up this weekend, we will have our first ever HEAL conference. Finally, we're excited to announce our partnership with Eleven Labs as Gaia's official provider for AI-powered dubbing and translation services. This collaboration will allow us to streamline and accelerate the process of adapting our content for a global audience. By leveraging Eleven Labs' advanced technology, we'll be able to reach new viewers more efficiently in their native languages, enhancing the accessibility of Gaia's offerings. Looking forward to the end of the year and beyond, our focus remains on executing on the price increases for existing members, broadening the reach of our marketplace initiative, growing our premium membership tier, and driving improvements in annualized ARPU. Our CFO, Ned Preston, will now provide deeper insights into our financial performance. Ned.