Gaia Inc. on Monday reported a loss for the third quarter ended September 30 of $10.3 million, or (0.58) cents per share, compared to a net loss of $5.2 million, or (34) cents per share, in the year-ago quarter, and missing analysts’ consensus estimates by 15 cents.
Total revenues in the third quarter increased 52 percent to $11.4 million from $7.5 million in the year-ago quarter, which beat targets by $0.1 million. This was due to 56 percent growth in streaming revenues, which was driven by the 66 percent increase in paying subscribers versus September 30, 2017.
Gross profit in the third quarter increased 52 percent to $9.9 million compared to $6.5 million in the year-ago quarter. Gross margin increased 90 basis points to 87.1 percent from 86.2 percent 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.
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 million outstanding on our line of credit as of December 31, 2017.
Gaia’s paying subscriber count increased to 515,000 on September 30, 2018, up 66 percent 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.”
Photo courtesy Gaia
