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Gaia Reports Third Quarter 2016 Results

BOULDER, CO — (Marketwired) — 11/03/16 — Gaia, Inc. (NASDAQ: GAIA), a conscious media company, reported financial results for the third quarter ended September 30, 2016.

During the third quarter, Gaia completed the sale of its branded consumer product business and recognized a $114.5 million pre-tax gain. In the second quarter Gaia also sold its 51.4% interest in Natural Habitat, which was acquired for $0.6 million, for $12.8 million.

Gaia used the majority of the proceeds to conduct a share repurchase tender offer. Gaia acquired 9,637,000 shares of its common stock and 840,000 vested stock options at $7.75 per share. The remaining proceeds will be used to fund the continuing growth and development of Gaia–s business, as well as general corporate purposes. As of September 30, 2016, Gaia had 15.1 million shares outstanding, $62.5 million in cash, no debt, and an unencumbered 13 acre, 150,000 sq. ft. fully leased campus.

Reported results are from continuing operations and exclude the results of the branded consumer product business and Natural Habitat for all periods presented, except for certain disposition and separation costs that continued in the third quarter and costs associated with transition services, which ended on September 30, 2016.

Total revenues in the third quarter of 2016 increased 27% to $4.5 million from $3.5 million in the same quarter a year ago due to 35% growth in streaming revenue. Gaia–s paying subscriber count at the end of the third quarter grew 46% to 180,000 compared to 123,000 at the end of the third quarter of 2015.

Gross profit in the third quarter increased 30% to $3.8 million compared to $2.9 million in the year-ago quarter. Gross margin increased 170 basis points to 84.3% from 82.6% in the third quarter of 2015. The increase in gross margin was due to leverage on the cost of streaming due to higher volumes and increased revenues.

Total expenses in the third quarter were $8.0 million compared to $3.5 million in the year-ago quarter. The increase was primarily due to $4.2 million in additional selling and operating expenses associated with increased marketing and re-branding of Gaia, an increase in headcount, costs of business separation activities, and the cost of transition services.

Net loss from continuing operations in the third quarter was $(0.2) million or $(0.01) per share, compared to $(0.7) million or $(0.03) per share in the year-ago quarter.

“Our results for the third quarter were ahead of our expectations,” said Jirka Rysavy, Gaia–s Chairman and CEO. “We exceeded our subscriber growth target, successfully completed the sale of the branded business and the tender offer, increased our geographic reach to 130 countries and expanded our library to approximately 7,500 titles. We expect to build on this momentum during the fourth quarter and reach about 200,000 paid subscribers by the end of the year.”

Gaia is hosting a conference call today, November 3, 2016, beginning at 4:30 p.m. ET (2:30 p.m. MT). The conference call dial-in numbers are (877) 741-4251 or (719) 325-4783 for international callers, passcode 9218871. Questions will be reserved for analysts and investors. If you have any difficulty connecting with the conference call, please contact Liolios at (949) 574-3860. Following the completion of today–s conference call, a replay will be available until November 17, 2016 by dialing (844) 512-2921 or (412) 317-6671 for international callers, passcode 9218871.

Gaia is a global digital video streaming service and online community that provides curated conscious media content to its subscribers in 130 countries. Over 90% of its 7,500 titles are available for streaming exclusively on Gaia through most devices connected to the Internet and 80% of the views are generated by content produced or owned by Gaia. For more information about Gaia, visit .

This press release includes forward-looking statements relating to matters that are not historical facts. Forward-looking statements may be identified by the use of words such as “expect,” “believe,” “will,” or comparable terminology or by discussions of strategy. While Gaia believes its assumptions and expectations underlying forward-looking statements are reasonable, there can be no assurance that actual results will not be materially different. Risks and uncertainties that could cause materially different results include, among others, history of operating losses, general economic conditions, competition, changing consumer preferences, acquisitions, new initiatives undertaken by us, and other risks and uncertainties included in Gaia–s filings with the Securities and Exchange Commission. Gaia assumes no duty to update any forward-looking statements.

Paul Tarell
Gaia, Inc.
(303) 222-3330

Cody Slach
Liolios Investor Relations
(949) 574-3860

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