Good afternoon. Welcome to Gaia's Third Quarter 2025 Earnings Conference Call. Joining us today from Gaia are Jirka Rysavy, Executive Chairman; Kiersten Medvedich, CEO; and Ned Preston, CFO. 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 these expectations are reasonable, Gaia 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 expectations of the company's management and involve inherent risks and uncertainties, including those identified in the Risk Factors 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 3, 2025. 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. At this time, I'd like to turn the call over to Gaia's Chairman, Jirka Rysavy. Please go ahead.

Good afternoon, everyone. During the third quarter, we grew our revenue by 14% and our gross margin improved an additional 30 basis points to 86.4% from 86.1% a year ago quarter. Member count at the same period grew to 883,000. A year ago, we raised our subscription prices for most of our members by $2. So while the losses from the price increase resulted in lower member growth, our revenue grew to a $100 million run rate or $25 million during the quarter, up from $22 million in the last year quarter. Our annualized gross profit per employee increased to $814,000, up from $730,000 in the year-ago quarter, which is also obviously driving further improvement in our free cash flow. The value of our subsidiary, Igniton, using pricing from its recent fundraising, is about $106 million. But valuing Gaia's two-thirds ownership interest in Igniton, it's about $70 million. Igniton products are now available on Gaia Marketplace. You can get more information on igniton.com. The Gaia cash position improved significantly to $14.2 million from $4.4 million a year ago. Now Kiersten will speak more about the business.

Thank you, Jirka. So last week marked an important step in Gaia's evolution as we continue moving from a traditional SVOD model to an AI-forward company, one that brings together conscious media, community and technology. We launched our new AI Guide in beta to our direct members, and the early results have been very encouraging. Session depth and repeat usage are both trending upward, confirming what we believed from the start, that Gaia's curated content library, paired with our customized AI, creates a truly distinctive and engaging experience. Now, as we move towards a full rollout, this experience will expand to include personalized guidance, contextual recommendations, and integrated chats across both app and web. Beyond helping members discover content that fits their evolving interests, our AI acts as a research companion, helping members find what's relevant to them faster while keeping the experience fresh and evolving. This direction reflects our commitment to grow in step with our members and the world around us, integrating intelligent technology in service of human potential and positioning Gaia at the leading edge of how people connect, how they learn, and transform in an increasingly digital world. AI will also play a central role in how we express our brand. It will become an integral part of our marketing, helping people discover Gaia, understand our mission, and meet them where they are on their spiritual path. In addition to AI, we're actively developing Gaia's community platform. While we're not ready to share specifics yet, we plan to launch next year. Our vision is for members to explore, learn, transform, and then naturally find their community of like-minded individuals to learn and share together. We expect 2026 to be a key transition year for us, focused on advancing the technology and infrastructure that will deliver outstanding value to our direct gaia.com members. This work will position Gaia for the next stage of growth as we fully integrate content, community, and AI into a seamless, cohesive experience. As part of this evolution, we're also reframing how we define success. Traditional viewership metrics no longer capture the actual depth of connection we're building. With the intersection of AI, content, and community, engagement actually becomes a true measure of value. This shift better reflects our mission, our technology, and the growing resonance within our direct member base. That being said, our third-party members don't have access to these new AI or community features as they're not supported on external platforms. And with churn nearly double on the larger platforms and revenue per subscriber roughly half compared to our direct members, we believe our focus is better spent on deepening those direct member relationships. So going forward, we'll prioritize revenue and members with higher ARPU. Today, about two-thirds of our direct members have been with Gaia for more than a year, and that number continues to grow. This ongoing loyalty strengthens our foundation and positions Gaia for a greater long-term profitability. Now, over to Ned to talk about the financials.

Thank you, Kiersten. For the third quarter of 2025, Gaia delivered revenue of $25.0 million, up from $3.0 million, or 14% year-over-year, driven by growth in both ARPU and member count. Total members increased in Q3 to 883,000. Gross profit increased 14% to $21.6 million from $19.0 million in Q3 of 2024, with gross margins expanding to 86.4%, up from 86.1%. Net loss was negative $1.2 million or negative $0.05 per share, versus negative $1.2 million or negative $0.05 per share in Q3 of 2024. Operating cash flow was $0.3 million, with free cash flow of $0.9 million, representing the seventh consecutive quarter of positive free cash flow and further reflecting ongoing operational discipline. For the first nine months of 2025, free cash flow was $3.2 million, up from $1.8 million during the same period of last year. Our cash balance increased to $14.2 million as of September 30, 2025, up from $4.4 million a year ago, with a fully available $10 million line of credit. In July, Gaia also renewed its credit line for an additional three years with improved terms, including a lower interest rate and a wider range of permitted use. 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. And we have all of this with zero debt outside of the mortgage on our campus, which we are in the process of renewing by the end of this year. In summary, we continue to manage costs carefully and maintain healthy margins while investing in the strategic areas that will create long-term value for shareholders. I will now turn the call back over to Jirka.

So for the summary, we expect our annual growth rate for this year to be in the low double digits and similar, probably revenue growth for the next year, thus continually increasing our ARPU and obviously generating positive free cash flow. So this concludes our remarks. I would like to open the call for the questions. Operator, Sachi?

The first question is from Ryan Meyers from Lake Street Capital.

First one for me, you called out some losses from the customers on price increases. So just curious what the churn number was during the quarter and kind of how that compares to what churn is historically?

Well, for the price increases, you can roughly figure out you lose about half the price increase as additional churn because you increase prices. So there's definitely some people that respond to it, but if you get the delta, about half of it. And we kind of view it positively. That's where we kind of expect it. Based on the experience, we'll probably do another price increase next year. The churn, we don't really use a specific number because we tried to do it, and everybody does it differently. For example, Netflix, if the customer comes back in 10 months, it's the same customer. For us, it's a different customer. Pretty much 80% of losses happen in the first six months. So the numbers on their own don't really make sense.

Okay. Fair enough. And then with the AI offering that you guys talked a little bit about, how do you think that changes the core subscription model? Any additional details on that, I think, would be helpful.

Well, I think keep in mind, it's still in beta, but it is considered a conversational experience that will connect our members with the right content. The interaction will now be measured as engagement. So our feeling is ARPU will increase and so will churn will decrease.

Okay. Got it. And then lastly, did you guys see any significant growth in the Igniton offering on the actual Gaia Marketplace?

Well, we didn't really launch Igniton on Gaia Marketplace until after Labor Day. So we started, we launched it, so we have only about three weeks in the quarter. It went pretty well. Obviously, there is no cost to that. We probably sold about $300,000. But it also was a new item. So for Igniton, it's still to stabilize all the lines. We find different outside fulfillment houses and stuff. And they will probably continue until the end of the fourth quarter. So I don't expect to really push revenue in Igniton for this year until next year.

The next question is from George Kelly from ROTH Capital Partners.

I just want to follow up on your earlier questions. It seems you're a bit unsure about the pricing for core subscriptions early next year. Did I understand that correctly? Is it still part of the plan, and if so, what amount are you considering?

Our plan is to probably go sometime in mid-April for another $2.

Okay. Understood. There was also a discussion on the call regarding your AI features prioritizing the direct channel. How should we consider that in terms of partner marketing spend and the allocation of marketing resources towards partners? Will there be some churn or slower growth by channel next year as you emphasize the direct channel? How are you planning for subscriber growth next year with these changes?

Well, if we're going to raise prices, it's typically the most of the hit you take in the months you introduce it, because all the monthly subscriptions, which is like half of the business compared to annual, will kind of decide if they will continue or not. That's typically, I said, if we don't raise the prices, the revenue growth and member growth as a percentage is about the same. If we do a price increase, the member growth is maybe half of the revenue growth. So you're going to see, I assume that's what we saw this year, and that's what we're going to see next year.

And also, we continue to see challenges with advertising efficiencies and targeting on our third-party platforms, which we can't fully control. So our focus will remain on sustainable, profitable member growth and not short-term volume.

Then as Kiersten said, because if you go to a third party, the churn is more than double of ours, and the revenue we book is half of ours. So it's really what we need, one person for the same revenue, just one person on our direct rather than four on outside parties. That's what she meant by the higher value members.

Okay. Understood. And then still on the core business, as you improve the curation tools, and you're discovering, I know it's still early days, but you're discovering sort of what people are most interested in, what they want, and what they're learning about. Do you expect to raise your content spend? Or do you think it's in a good place where it sits now?

No, we are raising our content spend about 23% from the prior year, so we will continue to produce more content.

So next year, I'm just thinking of round numbers, I mean, next year, like what's a good kind of ballpark? Maybe you're not ready to give that. But how should we think about content spend next year?

We're not ready to give that, but I could say it's 23% more.

No. I mean, in a rough figure, because we're going to right now look at engagement, which includes community and AI, but if you would strip that and just look at pure content investment, probably about $15 million.

Okay. And then just a last one for me, just back to Igniton. I thought that the official big launch was in September. It sounds like maybe you're pushing it out a little bit. What have you seen? Did you put much marketing effort behind it in September, or is there any more detail you can give there? And that's all I had.

All we did was put it in Gaia Marketplace and send an email to Gaia members. We didn't do any marketing push, and we probably won't do anything until our Christmas time.

The next question is from Jim Sidoti from Sidoti & Co.

Jirka, I think I heard you say the Igniton revenue was about $300,000. Was that for the month or for the quarter?

No. That was just Igniton product on Gaia Marketplace, the revenue for the quarter was about $700,000.

So once this is fully launched, do you think this is a product that could bring in over $3 million a year?

We expect to be pretty much close to it this year.

Jim, I can get into it in a little more detail. Actually, for this year, it's going to be on a run rate of around $3 million. But for this year, because we launched it about two-thirds of the way through the year, we'll finish this year at about half of that. Heading into 2026, I think that's when you would expect the higher number.

And what will the impact on gross margin be?

It's running right now at about 82%. So it's slightly below the 86% that Gaia does.

Okay. But still a pretty healthy gross margin.

Yes.

Okay. Right. And in terms of the AI, can you just kind of detail, how do you monetize that? Is that going to be greater member retention or helps support price increases? What is the ultimate goal of the AI investment?

Well, there are several of them, but I believe it will have pretty good engagement on its own as we see some people really spend more time on search through AI. We spent a lot of time incorporating ancient books and videos from our library, so it's quite different than other AIs could be. So it's really proprietary. It will also function as a search engine for Gaia for all the videos. So if you ask any questions, we will recommend videos that we have on those topics. That's really the main function. Based on early indications, it was a good call because the engagements are already very good and increasing, and we launched it about a week ago.

At this time, this concludes our question-and-answer session. I'd like to turn the call back over to Mr. Rysavy for his closing remarks.

Well, thank you, everyone, for joining, and we look forward to speaking with you when we report our fourth quarter results, which will be in early March next year. Thank you.

Thank you for joining us today for Gaia's Third Quarter 2025 Earnings Conference Call. You may now disconnect.