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Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<ul><li>Gaia reported 3Q24 revenue of $22.2 million, up 10% from the year-ago quarter, strong EBITDA of $4.0 million, and slightly positive cash flow.</li><li>During the quarter, the company initiated the first subscription price increase in its history (by at least $2 per month) and indicated positive initial results, with modest member attrition (mid-single digits), which contrasts favorably with strong ARPU growth (upper teens).</li><li>This allowed Gaia to guide to strong revenue <span style="font-size: var(--content-font-size);">growth for 4Q24 to upwards of $24 million, likely with a </span>significant contribution to the EBITDA and bottom line.</li></ul>

Gaia reported 3Q24 revenue of $22.2 million, up 10% from the year-ago quarter, strong EBITDA of $4.0 million, and slightly positive cash flow.During the quarter, the company initiated the first subscription price increase in its history (by at least $2 per month) and indicated positive initial results, with modest member attrition (mid-single digits), which contrasts favorably with strong ARPU growth (upper teens).This allowed Gaia to guide to strong revenue growth for 4Q24 to upwards of $24 million, likely with a significant contribution to the EBITDA and bottom line.

GAIA: Reports Good 3Q24 Results; Price Increase to Fuel Further Revenue Growth

<ul><li>Gaia reported revenue of $22.1 million, up 11% Y/Y, continuing the recent trend of steady revenue progression.</li><li>The company pushed out a planned price increase for new members to 3Q24 to better coordinate pricing with third-party partners.</li><li>Gaia is also considering its first ever price increase for existing members, which should further accelerate revenue growth to about 15% in 4Q24. </li></ul>

Gaia reported revenue of $22.1 million, up 11% Y/Y, continuing the recent trend of steady revenue progression.The company pushed out a planned price increase for new members to 3Q24 to better coordinate pricing with third-party partners.Gaia is also considering its first ever price increase for existing members, which should further accelerate revenue growth to about 15% in 4Q24. 

Gaia, Inc. - Reports Continued Steady Revenue Growth

Thematic (Sector/Industry)

<ul><li>Many of the companies that participated in our recent Consumer Products Virtual Investor Conference have been working hard in righting the ship following the post- pandemic hangover that a lot of consumer names have suffered through.</li><li>There were several new management teams with new strategies, and a lot of talk about inflection points.</li><li>Vera Bradley’s CEO, CFO, and CMO have each been there for less than two years, and the company is about to roll out its Project Restoration strategic initiatives next month, which management believes will take the company into the third <span style="font-size: var(--content-font-size);">major stage of its lifecycle.</span></li></ul>

Many of the companies that participated in our recent Consumer Products Virtual Investor Conference have been working hard in righting the ship following the post- pandemic hangover that a lot of consumer names have suffered through.There were several new management teams with new strategies, and a lot of talk about inflection points.Vera Bradley’s CEO, CFO, and CMO have each been there for less than two years, and the company is about to roll out its Project Restoration strategic initiatives next month, which management believes will take the company into the third major stage of its lifecycle.

Consumer Products Conference Recap - June 20, 2024

<ul><li>Gaia reported strong 1Q24 results, with revenue of $21.7 million (up 11%), 33,000 net member additions for a total membership count of 839,000 (all-time high), and strong operating cash flow of $5.9 million.</li><li>International revenue growth was particularly strong at 20.4%, compared with respectable US growth of 3.7%.</li><li>Member acquisition costs decreased 10%, partly as a result of a focus on direct-to-paid marketing campaigns, whereby free trial periods are replaced by special incentives to lock in longer-term membership commitments at attractive rates. This also fueled healthy deferred revenue growth of $2.0 million during the quarter.</li></ul>

Gaia reported strong 1Q24 results, with revenue of $21.7 million (up 11%), 33,000 net member additions for a total membership count of 839,000 (all-time high), and strong operating cash flow of $5.9 million.International revenue growth was particularly strong at 20.4%, compared with respectable US growth of 3.7%.Member acquisition costs decreased 10%, partly as a result of a focus on direct-to-paid marketing campaigns, whereby free trial periods are replaced by special incentives to lock in longer-term membership commitments at attractive rates. This also fueled healthy deferred revenue growth of $2.0 million during the quarter.

Gaia, Inc. - Solid Top-Line Momentum Continues in 1Q24

<ul><li>Gaia reported solid 4Q23 results, with revenue of $20.7 million, up 6% Y/Y.</li><li>More importantly, the company reported its fourth consecutive quarter of member growth, ending the year with 806,000 members versus 759,000 at the beginning of the year.</li><li>In fact, Gaia resumed member growth in 1Q23 with 7,000 new members. </li></ul>

Gaia reported solid 4Q23 results, with revenue of $20.7 million, up 6% Y/Y.More importantly, the company reported its fourth consecutive quarter of member growth, ending the year with 806,000 members versus 759,000 at the beginning of the year.In fact, Gaia resumed member growth in 1Q23 with 7,000 new members. 

United States

Gaia, Inc. operates a global digital video subscription services company. The Company offers a digital content library on multiple internet-connected devices. Gaia serves customers globally.

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Gaia (GAIA US)

GAIA: Reports Good 3Q24 Results; Price Increase to Fuel Further Revenue Growth

Gaia reported 3Q24 revenue of $22.2 million, up 10% from the year-ago quarter, strong EBITDA of $4.0 million, and slightly positive cash flow.

Water Tower Research

Gaia, Inc. - Reports Continued Steady Revenue Growth

The company is anticipating about a 20% price increase with an associated incremental churn, still yielding positive results.

Water Tower Research

Consumer Products Conference Recap - June 20, 2024

Many of the companies that participated in our recent Consumer Products Virtual Investor Conference have been working hard in righting the ship...

Water Tower Research

Gaia, Inc. - Solid Top-Line Momentum Continues in 1Q24

Gaia reported strong 1Q24 results, with revenue of $21.7 million (up 11%), 33,000 net member additions for a total membership count of 839,000 (all...

Water Tower Research

Gaia, Inc. - Encouraging 4Q23 Results

Gaia reported solid 4Q23 results, with revenue of $20.7 million, up 6% Y/Y. More importantly, the company reported its fourth consecutive quarter...

Water Tower Research

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