Gaia Inc. (Nasdaq: GAIA) reported lower revenue and gross margin as part of third-quarter financial results released Monday. However, the Louisville-based media company also posted a 10th consecutive quarter of earnings before interest, taxes, depreciation and amortization.
Revenue fell 2.5% to $19.9 million from $20.4 million in the same quarter a year ago. For the nine months ended Sept. 30, revenue increased 6.3% to $62.5 million in 2022 from $58.7 million in the same period of 2021.
The number of Gaia members as of September 30 was 776,000, compared to 790,500 as of September 30, 2021.
Gross profit in the third quarter decreased to $17.2 million from $17.8 million in the year-ago quarter due to lower revenue. Gross margin decreased slightly to 86.7% from 87.1% in the same quarter last year due to increased content amortization of its investment in original content.
Total operating expenses were $17.6 million or 88% of revenue, compared to $17.1 million or 84% of revenue in the same quarter of 2021. The company attributed the slight increase to legal fees high this year linked to an investigation by the Securities and Exchange Commission. and a $2 million accrual for the expected settlement, which would resolve the investigation.
“The third quarter continued to be impacted by the trends that developed in the spring,” Paul Tarell, Gaia’s chief financial officer, said in a prepared statement. “Consumers have shifted their focus and spending towards travel and recreational activities, which has affected our ability to cost-effectively add new members. We also experienced high cancellations from March through July from members who joined us during the peak times of COVID in 2020 and 2021.
“While these cancellations began to dissipate in the second half of August, the combination of the two headwinds impacted our goals for member and revenue growth in the quarter. We remain focused on continuing to attract and retain high lifetime value members, albeit at a lower volume, allowing us to focus on our long-term plan of building a very committed that generates significant cash flows over many years.
Gaia is a member-supported global video streaming service and community that produces and curates conscious media through four main channels.
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