Gaia projects low double-digit revenue growth and accelerates AI integration with Igniton expansion

Earnings Call Insights: Gaia, Inc. (GAIA) Q3 2025

Management View

Jirka Rysavy, Founder & Executive Chairman, reported that "during the third quarter, we grew our revenue 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." He highlighted the impact of the prior year’s $2 subscription price increase, noting revenue grew to a $100 million run rate or $25 million during the quarter, despite lower member growth.

Rysavy stated, "Our annualized gross profit per employee increased to $814,000, up from $703,000 in the year-ago quarter," and emphasized the company’s improved cash position at $14.2 million from $4.4 million a year ago.

Rysavy shared that Igniton’s post-fundraising value is about $106 million, with Gaia’s 2/3 ownership interest valued at about $70 million. Igniton products are now available on Gaia Marketplace.

CEO Kiersten Medvedich introduced Gaia’s shift from a traditional SVOD model to an "AI-forward company," describing the launch of the new AI Guide in beta and its effects: "Session depth and repeat usage are both trending upward, confirming...that Gaia's curated content library, paired with our customized, AI creates a truly distinctive and engaging experience."

Medvedich outlined a strategic priority for 2026: "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."

CFO Ned Preston stated, "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." He added, "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."

Outlook

Rysavy indicated expectations for "annual growth rate for this year to be in low double digits and similar probably revenue growth for the next year, thus continually increasing our ARPU and obviously generating positive free cash flow."

Medvedich framed a shift in success metrics: "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."

The company plans to launch its new community platform next year and will continue emphasizing direct member relationships over third-party platforms due to higher ARPU and lower churn in direct channels.

Financial Results

Preston reported gross profit increased 14% to $21.6 million from $19.0 million in Q3 of 2024, with gross margins expanding to 86.4% from 86.1%.

Net loss was (-$1.2 million) or (-$0.05) per share, consistent with Q3 2024.

Free cash flow reached $0.9 million in the quarter, and $3.2 million for the first nine months of 2025, up from $1.8 million in the prior-year period.

Cash balance at September 30, 2025, was $14.2 million, with a fully available $10 million line of credit. The credit line was renewed for three years with improved terms, including a lower interest rate.

Igniton product revenue on Gaia Marketplace for the quarter was approximately $700,000, and is expected to reach a $3 million run rate in 2026, with a current gross margin of 82%.

Q&A

Ryan Meyers, Lake Street Capital: Asked about churn resulting from the price increase. Rysavy responded, "For the price increases, you can roughly figure out you lose about half the price increase as additional churn...but if you get the delta, about half of it."

Meyers inquired about the AI offering’s impact on the subscription model. Medvedich replied, "It's still in beta, but it is considered a conversational experience that will connect our members with the right content...our feeling is ARPU will increase and so will -- and churn will decrease."

Meyers asked about Igniton growth on Gaia Marketplace. Rysavy answered that the product launched after Labor Day with "only like 3 weeks in the quarter...we probably sold about $300,000."

George Kelly, ROTH Capital Partners: Asked about potential timing and scale of the next price increase. Rysavy confirmed, "Our plan is to go like probably somewhere in mid-April time for another $2."

Kelly inquired about content spend. Medvedich stated, "We are raising our content spend about 23% from the prior year."

Kelly probed on Igniton’s launch and marketing. Rysavy said, "All we did is to put it in Gaia Marketplace and send e-mail to Gaia members. We didn't do any marketing push, and we probably won't do anything until like Christmas time."

James Sidoti, Sidoti & Company: Asked about the Igniton revenue and run rate. Rysavy answered, "That was just Igniton product on Gaia Marketplace, the revenue for the quarter was I think -- yes, probably $700,000." Preston added, "for this year -- it's going to be on a run rate of around $3 million. But for this year, because we launched it kind of 2/3 of the way through the year, we'll finish this year about half...Heading into 2026, I think that's when you would expect the higher number."

Sidoti asked about AI monetization. Rysavy responded, "I kind of believe it would have pretty good engagement on its own as we see some people really spend more time on search through AI...And based by early indication, it was a good call because the engagements are already very good and increasing."

Sentiment Analysis

Analysts were inquisitive and pressed for granular details on churn, AI monetization, content spend, and Igniton's performance, reflecting a slightly positive but probing sentiment with a focus on the sustainability of growth drivers and monetization strategies.

Management maintained a confident tone in prepared remarks, with Rysavy and Medvedich frequently emphasizing positive engagement and growth, and used phrases such as "we expect" and "we believe," indicating optimism but some caution regarding future developments, particularly with AI and Igniton integration.

Compared to the previous quarter, analyst questions shifted more toward the specifics and timing of AI and Igniton monetization, and management’s tone remained steady but more focused on the operational details and rollout timelines of new initiatives.

Quarter-over-Quarter Comparison

Guidance language evolved from an expectation of 12% annual revenue growth in Q2 to "low double digits" for both 2025 and 2026, suggesting ongoing steady growth.

Management focus shifted from announcing the Igniton launch and AI concept in Q2 to reporting tangible results and early adoption data in Q3, including specific revenue figures and engagement metrics for both initiatives.

Analysts in Q3 concentrated on churn, ARPU impact, and the operationalization of AI and Igniton, showing a greater emphasis on monetization and member quality, versus Q2's broader questions about strategy and community building.

Management’s confidence in operational discipline and cash flow generation remained consistent, but the discussion in Q3 included more granular detail on technology integration and product performance.

Risks and Concerns

Management acknowledged that "losses from the price increase resulted in lower member growth," but asserted that revenue and ARPU gains offset these losses.

Medvedich noted continuing challenges with "advertising efficiencies and targeting on our third-party platforms, which we can't fully control."

Focus will remain on high-ARPU, lower-churn direct members, as churn on third-party platforms is nearly double and revenue per subscriber is roughly half compared to direct members.

Igniton's ramp-up is still in early stages, with revenue expectations for a full run rate deferred to 2026, and current gross margins slightly below those of the core Gaia business.

Final Takeaway

Gaia’s third quarter reflected strong revenue and margin improvements, underpinned by a strategic pivot towards AI-driven member engagement and the integration of Igniton into the Gaia Marketplace. The company plans for continued low double-digit revenue growth and an expanded focus on high-value direct members, supported by ongoing technology and community platform investments. While price increases and a shift away from third-party platforms may moderate member growth, management is prioritizing higher ARPU and sustained free cash flow generation, with 2026 set as a pivotal year for AI and community feature rollouts and Igniton’s full commercial ramp.