Gaia Inc. reported revenues in the fourth quarter increased 27 percent to $18.6 million from $14.7 million in the year-ago quarter. This was primarily due to growth in members and an increase in average revenue per member.
Paying members increased to 727,600 as of December 31, 2020 with net member additions for the quarter of 30,300.
Gross profit in the fourth quarter increased 27 percent to $16.2 million compared to $12.8 million in the year-ago quarter. Gross margin increased to 87.1 percent versus 86.9 percent in the year-ago quarter.
Total operating expenses were $15.7 million, or 84 percent of revenues in the fourth quarter of 2020 compared to $15.3 million, or 104 percent of revenues in the year-ago quarter. The significant reduction as a percentage of revenues is due to continued efficiency improvements in fixed operating expenses and reducing customer acquisition costs as a percentage of revenue to 43 percent from 50 percent in the year-ago quarter.
Net income in the fourth quarter was $0.3 million or $0.02 per share, which improved from a net loss of $2.8 million or $(0.15) per share in the year-ago quarter.
EBITDA improved to $3.5 million compared to $0.2 million in the year-ago quarter and has continued to increase sequentially.
Gaia generated cash flows from operations in excess of cash used in investing activities of $1.5 million during the fourth quarter of 2020, an improvement of $2.0 million compared to the fourth quarter of 2019. This marks the final milestone in Gaia’s transition to positive earnings and cash flows, with a $3.9 million increase in Gaia’s cash balance compared to September 30, 2020. Gaia’s cash balance was $12.6 million as of December 31, 2020.
2020 Financial Results
Revenues in 2020 increased 24 percent to $66.8 million from $54.0 million in 2019. This was primarily due to growth in paying members and an increase in average revenue per member.
Gross profit in 2020 increased 24 percent to $58.2 million compared to $46.9 million in 2019. Gross margin improved to 87.1 percent versus 86.8 percent primarily due to increased revenues.
Total operating expenses in 2020 were $62.8 million or 94 percent of revenues compared to $64.1 million or 119 percent of revenues in 2019, which was an improvement in both absolute dollars and as a percentage of revenues. Customer acquisition costs as a percentage of revenue decreased to 47 percent in 2020 from 56 percent in 2019.
Net income in 2020 was $0.5 million, or $0.03 per share, compared to a net loss of $18.2 million, or ($1.00) per share, in 2019.
EBITDA improved $15 million in 2020 to $7.4 million from $(7.6) million in 2019, an almost 200 percent improvement.
Cash generated from operations was $11.7 million in 2020 compared to cash used in operations of $2.6 million in 2019, an improvement of $14.3 million.
“We had a very successful year in 2020, generating net income and cash flows while maintaining our revenue growth rate over 20 percent,” said Paul Tarell, Gaia’s CFO. “Beginning in July we reached the scale necessary to sustainably grow and maintain profitability.”
Photo courtesy Gaia Inc.
