Operator: Good afternoon. Welcome to Gaia’s First Quarter 2026 Earnings Conference Call. [Operator Instructions] Joining us today from Gaia are Jirka Rysavy, Chairman; Kiersten Medvedich, CEO and Ned Preston, CFO. [Operator Instructions]. 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 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 represented in today’s call are reconcilable in the company’s earnings release, press release to the most directly comparable GAAP measure. This call also contains time-sensitive information that is accurate only as of the timing date of this broadcast, May 4, 2026. Finally, I’d like to remind everyone that the conference call is being webcast, and a recording of this will be available — 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 Chairman, Jirka Rysavy. Please go ahead.

Jirka Rysavy: Good afternoon, everyone. This first quarter marked the beginning of our deliberate refocus back to a direct member base and a pricing discipline. In March, the 15% price increase was implemented in about 80% of our regions for monthly members. For our annual members, the increase will be effective with a subscription renewal. During the first quarter, we delivered $1.5 million of operating and $1.1 million of free cash flow. Now Kiersten will tell you about our plan to improve both our retention and ARPU at least 20% between the fourth quarter of last year and fourth quarter of this year. Kiersten?

Kiersten Medvedich: Thank you, Jirka. This quarter reflects an important step in Gaia’s evolution as we continue to execute on a strategy centered on strengthening the quality durability and profitability of our membership base. After 3 quarters in the CEO role, I have a clear view of where Gaia’s greatest opportunity lies, and I am confident the strongest path forward is to prioritize our direct relationship with members where we can deliver the full Gaia experience, deepen engagement and capture the greatest lifetime value from our content, technology and brand. Over the past several years, there was a meaningful focus on driving subscriber growth from third-party platforms, supported by increased marketing spend and lower CPAs in those channels.

While that supported top line growth, those members generated lower ARPU, experienced higher churn and do not have access to the core features that we believe will define Gaia’s future. In addition, because those relationships sit with the platforms rather than with Gaia, we do not know who those subscribers are and have no ability to engage them directly. That is why we are prioritizing growth in direct memberships where we can deliver the full Gaia experience and drive stronger long-term economics. As a reflection of that focus for the fourth quarter of 2026, compared with the fourth quarter of 2025, Gaia is targeting an approximate 20% reduction in churn and a 20% to 25% increase in ARPU. As a result, we are making deliberate changes to how we grow, specifically, one, reducing our reliance on lower-value third-party member acquisition; two, taking a very disciplined approach to discounting and promotions, and three, rebuilding our direct marketing capabilities with new leadership and partners, including our recently appointed CMO, Tracy Benson, who has decades of experience scaling iconic consumer brands and high-growth companies.

We also recently onboarded new agency partners across paid media and brands. These actions are intentional, and they come with a trade-off. We expect near-term pressure on revenue growth as we make this transition while still expecting growth versus last year. We are doing this because we believe these changes will materially improve the long-term economics of the business. To today, our average member lifetime value exceeds $500 before reflecting the impact of our recent price increase. This is 6x our current CPA of $85. We believe this is the metric that matters, growing a high direct — high-value direct member base requires a more deliberate approach, one built on brand strength, marketing efficiency, retention and member experience, and we are giving the organization the time and focus needed to execute that transition.

Now what gives us confidence is the strength of our existing direct member base. I have mentioned this before, approximately 70% of our direct members have been with Gaia for more than 1 year, and about 40% have been with us for more than 3 years. This level of loyalty reinforces our belief that the direct model supports a more enduring and a more valuable business over time. This is also reflected in the broader recognition of our platform. Gaia was recently ranked the #2 Mindfulness and Wellness App by Newsweek, which we believe speaks to the strength of our content, brand and member experience. At the same time, we continue to invest in the core elements that define the Gaia experience, content, AI, personalization and community. We continue to strengthen our content slate with programming that is closely aligned with the Gaia brand and the interest of our audience.

Recent releases include The Monroe Institute Experience, the fourth season of Missing Links with Gregg Braden, and we recently launched a new monthly live format that enables members to engage directly with their favorite Gaia hosts in real time. Additionally, Q1 has shown meaningful product improvements across our core engagement driving initiatives. These improvements are rolled out slowly and deliberately to make sure these changes are supportive to our goals. On the AI side, we have improved our model meaningfully reducing our costs and improving the quality of responses. We are also launching AI-powered tarot and astrology features, giving members more reasons to engage with Gaia on a daily basis. All these improvements help reinforce our direct member experience.

Turning to Igniton, we’re excited that Erica will be interviewed by Dave Asprey at the Biohacking Conference on May 28. We believe this is an important opportunity for Erica to discuss the Igniton technology and broaden awareness of the brand. Now to support our top of funnel Gaia marketing efforts, we have partnered with Amagi with the launch of FAST channels, allowing us to introduce Gaia to new audiences through curated content experiences. We view this as a brand-building and discovery channel that ultimately drives users back to our direct platform for access to a bigger offering. As we said last quarter, our goal remains to reach breakeven in the fourth quarter of this year and profitable for the year 2027. We believe the actions we are taking today are strengthening the foundation of the business in support of that objective.

Now stepping back, we see Gaia as the intersection of several long-term ships. More people are seeking content that supports growth, meaning and transformation. And at the same time, they expect more personalized, interactive and connected community experiences. We believe Gaia is uniquely positioned at that intersection. Gaia has always been for people who see the world differently, people asking deeper questions and seeking greater meanings. Our role is to help them find their why and support them on their journey. When we look ahead, we see a clear opportunity to build a stronger company, one defined not just by growth, but by quality, engagement and durability. The choices we are making today reflect that focus, and we believe they will drive more meaningful long-term value for both our members and our shareholders.

Now over to Ned for the financial details.

Ned Preston: Thank you, Kiersten. Revenues for the first quarter of 2026 increased to $24.3 million from $23.8 million in the first quarter of 2025, primarily driven by increased ARPU and partially offset by the reduction of discounted pricing. Gross profit in the first quarter was $20.9 million, unchanged from last year, gross margin was 86%. Due to the initiatives Kiersten discussed, net loss was $1.3 million or negative $0.05 per share compared to a net loss of $1 million or negative $0.04 per share in the year ago quarter. Our annualized gross profit per employee increased to $816,000, up from $806,000 in the year ago quarter, driving further improvements in our free cash flow. Operating cash flow was $1.5 million with free cash flow of $1.1 million, reflecting ongoing operational discipline and representing the ninth consecutive quarter of positive free cash flow.

Our cash balance was $13.1 million as of March 31, 2026, aligned to the $13.1 million at the end of Q1 of 2025 with a fully available $10 million line of credit. As we navigate this transition, our focus remains on maintaining a strong financial foundation while investing in long-term value creation. We continue to operate with high margins positive free cash flow and a solid balance sheet with no debt outside our small campus mortgage. While we anticipate near-term pressure on growth as we reposition the business, we believe our disciplined approach to cost management and capital allocation will drive improvement to our unit economics and profitability over time. This approach is illustrated in the pro forma revenue benchmark scenario included in our investor presentation available on our website.

This analysis outlines our business model at $100 million, $150 million and $200 million in revenue. We were pleased to nearly reach the first milestone in 2025, finishing the year at $99 million in revenue and $15.8 million in adjusted EBITDA. We are now targeting our next milestone of $150 million in revenue and $39.3 million in adjusted EBITDA by 2029. That completes my summary. I’d now like to turn the call back over to Jirka for his closing comments.

Jirka Rysavy: So this concludes our remarks. So I’d like to open the call for questions. Operator?

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Operator: [Operator Instructions] Our first question today is coming from Ryan Meyers from Lake Street Capital Markets. Ryan perhaps your phone is on mute?

Ryan Meyers: Sorry about that. I was on mute. First one for me, as we think about this pivot here to the direct channel, why do you feel like now is the right time to make this switch and the emphasis here on direct?

Kiersten Medvedich: So the timing reflects what we’ve learned — what I’ve learned over the past 3 quarters. Like when I stepped into the CEO role, the company already had a growth strategy in motion with a focus on third-party channels and discounted memberships. So my role was assessed whether that strategy was still working, especially for the long term. As marketing commitments to those channels increased, the data showed that they were generating customers with higher churn and lower margins and that didn’t support the full Gaia experience. And so — but at the same time, we are making important investments into AI products and community that are designed to deepen engagement and create more value for our direct members.

And so third party, like I said, third-party members just do not have access to those features of our platform. So this is a disciplined decision as newly into this role based on data, customer behavior and our long-term mission. And so I believe right now is the right time to focus our resources on higher quality growth, stronger retention and better margins.

Ryan Meyers: Okay. Makes sense. And then if we think back to last quarter, I know you guys did communicate low double-digit growth for FY ’26. So based on everything that you had talked about, it sounds like we shouldn’t be expecting low double-digit growth for this year. Any commentary that you can give us on what we could expect growth to be? It sounds like you guys do expect the business to grow year-on-year, but any color there would be helpful.

Ned Preston: Yes. Ryan, it’s Ned. Yes, so really, our overarching theme, as we’ve been talking, is our continued positive free cash flow to achieve that 20% to 25% ARPU by Q4 of this year. And then that will lead to our breakeven P&L for the fourth quarter and full year 2027 profitability for next year. We will see a short to midterm lul or kind of consistent revenue field for the next quarter or 2 with the second half of the year, things upticking to achieve that Q4 breakeven P&L.

Operator: Next question comes from Jim Sidoti from Sidoti & Company.

James Sidoti: Can you talk a little bit about gross margin? Why it was down over in the quarter and where you expect it to be as you go through this transition?

Ned Preston: Yes. Jim, yes, so for Q1, 86%. On paper, that does look as though it’s down as a percentage year-on-year. We did have a onetime true-up around royalties in Q1 of last year. So when you normalize that, it was flat at exactly 86% gross margins. With that being said, however, good question because we will see a small revenue mix shift from our non-SVOD business kind of leading to a slight decline in our gross margin percentage as we proceed through the year, just kind of making sense that some of those businesses are growing at a slightly higher growth rate. So I can go over that in more detail with all of you when we run through your models. But we’re talking about a 2 to 3-point by the end of the year on gross margins, but we’ll still be running as we go into 2027, back up around 86%.

James Sidoti: Okay. And can you break out was there a contribution from Igniton and some of your marketplace initiatives in the quarter?

Ned Preston: There were. They were nonmaterial. They were on track to what we were expecting. Really, that 86% for Q1 was on plan to what we were expecting from them. The mix shift really isn’t going into effect there as much as it will in Q2 through Q4.

James Sidoti: Okay. And I know you revised your top line guidance, but did I hear you still expect to be profitable by the fourth quarter?

Ned Preston: That’s correct. Yes.

Operator: Our next question today is coming from George Kelly from ROTH Capital Partners. [Operator Instructions]

George Kelly: First one is just on Igniton. I think you said that Erica plans to present at the May Biohacking Conference. So I was curious, like what the kind of product, product road map is with Igniton is and marketing plan for the year? And just any kind of data around your expectations for how the year should roll out for a Igniton?

Jirka Rysavy: At Biohacking, we’re going to introduce new products, which is called REM sleep, what increases dramatically for your own sleep. And we probably also introduce a new peptide which will get rid of the wrinkles — and — but on a peptide, we’re not totally sure we do it right on the conference or after. We have a few other non supplement technology [indiscernible] as it’s a technology company, and we want to be careful, so it’s not viewed on some people because today, we have questions about this being a supplement company. We don’t expect the supplemental will produce majority of the revenue at all. But for this year, it would, so that’s kind of the Biohacking, but we will introduce some of the non-supplement product as a vision without launching it in a event.

George Kelly: Okay. Okay. And what about the capital position at Igniton? Do they — like how does that look? Is there still plenty of cash there?

Jirka Rysavy: Yes. The company operates close to breakeven and has about $5 million cash and no debt.

George Kelly: Okay. Okay. And then second question from me is on community. Can you update us just on what’s launched. I’m not sure if any of that’s launched or the timing around the kind of key initiatives around community?

Kiersten Medvedich: Yes, sure. I’ll take that. So community, it remains an important part of the long-term vision for Gaia because we believe it has the ability to deepen engagement and increase intention. And right now, we are on target to launch a beta version by the end of this year for community. Like we are in a testing for sharing a playlist and sharing of profiles right now.

George Kelly: Okay. And then maybe one last question just on the deprioritization of the third-party channel. But what percent of your revenue is still derived there? And if we look forward a year or 2, where is that going to shift? Anything else in your subscription platform that you think, whether it’s third-party or something else that you’re also kind of — it’s under assessment? Or are there other areas that you might de-prioritize as well?

Jirka Rysavy: Well, the third party historically, we always had a limit should has to be revenue below 20%. And it was there till like 2, 2.5 years ago, it was all of this is like high teens. And then for us 2.5 years, it shifted a lot and get to kind of low 20s and close to, not quite 25%, but there and needs to go back into below 20%. Did I answer your question?

George Kelly: Yes. How quickly do you expect it to get back to that targeted range Jirka?

Jirka Rysavy: Within 12 months?

George Kelly: Within 12 months, okay.

Operator: At this time, this concludes our question-and-answer session. I’d like to turn the call back over to Mr. Rysavy for closing remarks.

Jirka Rysavy: Thank you, everyone, for joining, and we look forward to speaking with you when we will report our second quarter results in early August. Thank you.

Operator: Thank you for joining us today for Gaia’s First Quarter 2026 Earnings Conference Call. You may now disconnect.

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