Gaia (GAIA) investor relations material

Executive summary

• Revenue for Q2 2026 was $23.3 million, down 5–5.3% year-over-year, primarily due to a strategic shift toward higher-quality, higher-ARPU direct members and reduced discounting and international exposure.

• Net loss widened to $3.0 million ($0.12 per share) from $1.8 million ($0.07 per share) in Q2 2025.

• Management prioritized long-term member value, new AI-powered content initiatives, and a goal to return to positive free cash flow by Q4 2026.

• Continued investment in content, including new series, expanded programming, and wellness products, with over 10,000 titles and 90% exclusive content.

• Systematic cost review and targeted reductions in marketing, technology, and overhead to establish a more sustainable cost structure.

Financial highlights

• Q2 2026 revenue was $23.3 million, down 5–5.3% year-over-year; six-month revenues were $47.6 million, down 1.7%.

• Gross profit was $19.9 million with a gross margin of 85.3%, down from 86.7% in Q2 2025.

• Selling and operating expenses rose to $21.6 million from $20.6 million year-over-year, with operating loss margin at 13.8% in Q2 2026.

• Cash and cash equivalents at June 30, 2026 were $5.3 million, with a fully available $10 million line of credit.

• Operating cash flow for Q2 2026 was negative $5.4 million, impacted by seasonality and higher marketing costs.

Outlook and guidance

• Q3 2026 expected to be similar to Q2, with sequential revenue growth anticipated in Q4 and a focus on returning to positive free cash flow.

• No longer forecasting break-even net income for Q4; focus shifted to positive free cash flow.

• No further price increases planned until 2028 after the March 2026 adjustment.

• Plans to invest 15–20% of annual revenues in content and technology, scaling with cash flows.