Gaia, Inc. Class A Common Stock 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- Gaia reported second quarter 2026 revenues of $23.3 million, a 5% decrease year over year, primarily due to a strategic shift away from lower value regions and third-party acquisition channels toward direct member acquisition.
- Gross profit was $19.9 million with a gross margin of 85.3%, down from 86.7% in Q2 2025, mainly due to lower revenue against a fixed content cost base.
- Selling and operating expenses increased to $21.6 million from $20.6 million, reflecting marketing headwinds and investments in AI and community features, while corporate general and administrative expenses decreased to $1.5 million from $2.9 million due to cost reductions.
- Net loss was $3.0 million or -$0.12 per share, compared to a net loss of $1.8 million or -$0.07 per share in Q2 2025.
- Cash balance was $5.3 million as of June 30, 2026, with a fully available $10 million line of credit; cash inflows were impacted by seasonality of annual member renewals and higher marketing costs.
- Gaia signed author Jim Curtis for a new series launching in October and introduced Gaia shorts, five-minute clips from long-form content, to enhance content discovery and engagement.
- New products launched in May include REM Sleep and Ignite Peptide Eye Serum, showing encouraging initial sales and validating the ignition quantum technology.
- AI is used extensively in content production, product development, and marketing, with new AI-powered tarot oracle and horoscope experiences launched this quarter showing strong engagement and driving incremental return visits.
- Community features such as member profiles, playlist sharing, and an alpha of Circles chat have been introduced, with over 70% member opt-in in test groups, aiming to improve retention through connection.
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Transcript
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Good afternoon. Welcome to Gaia's second quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. Joining us today from Gaia are Kiersten Medvedich, CEO, Yonathan Nuta, COO, and Ned Preston, CFO. After the speakers' presentation, there will be a question and answer session. 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, August 10, 2026. 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 CEO, Kiersten Medvedich.
Please go ahead. Good afternoon, everyone.
As we discussed on our last call, our business today reflects the deliberate trade-off we said we were making, prioritizing the long-term quality of our member base over near-term growth. That transition, combined with higher industry marketing costs in April and May, weighed on our results this quarter. As we told you, we were making a deliberate shift toward our direct member base, and that this transition would put near-term pressure on revenue growth as we partially pulled back from lower-value regions like Latin America and from third-party acquisition channels. In fact, the revenue decline in the second quarter came from our international business. That is exactly what you are seeing in our results, and it's consistent with the plan we laid out. We still remain focused on two metrics: reducing churn and growing ARPU, targeting a 20% improvement each by the fourth quarter of this year.
We are on track against this framework. I want to be direct that we are not taking the softness in our top line lightly, and we've taken swift action across the organization in response. On the marketing side, we experienced a temporary spike in customer acquisition costs in April and May, driven by an algorithm change at a major advertising partner. We identified the issue and have since brought it back in line with our expectations. For context on why we manage acquisition costs this closely, on average, a direct member today has a lifetime value of over $500 against a customer acquisition cost of $85. That roughly 6 to 1 relationship is why we are willing to give up lower quality revenue to protect it, and an increase in CPA is something we move quickly to correct.
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