Gaia, Inc.

Second-quarter 2026 revenue was $23.3 million, down 5% from the year-ago quarter. Gross profit was $19.9 million, with gross margin of 85.3% versus 86.7% in Q2 2025. Selling and operating expenses were $21.6 million, compared with $20.6 million last year, while G&A fell to $1.5 million from $2.9 million. Net loss was $3.0 million, or $(0.12) per share, versus a net loss of $1.8 million, or $(0.07) per share, in Q2 2025. Cash was $5.3 million at June 30, 2026, with a fully available $10 million line of credit. Management expects Q3 results to be similar to Q2, with Q4 improving sequentially from Q3, but not enough to reach profitability; instead, the company is now focused on returning to positive free cash flow in Q4. The company said it has executed or identified over $3 million in annualized savings and expects to benefit from those savings by year-end.

Kiersten Medvedich framed the quarter as the expected result of a deliberate tradeoff: sacrificing near-term growth to build a higher-quality member base. She said Gaia is pulling back from lower-value regions such as Latin America and from third-party acquisition channels, and that the company is focused on improving churn and growth by 20% each by Q4. Her tone was candid about top-line softness, but she emphasized rapid actions on costs, channel diversification, and product investment, including new content, Gaia Shorts, and expanded Igniton products.

Ned Preston tied the financial results to the marketing shift, broader SVOD competition, and a temporary advertising partner algorithm issue that lifted customer acquisition costs in April and May. He highlighted that gross margin slipped to 85.3% from 86.7% because revenue fell against a relatively fixed content cost base, while G&A declined to $1.5 million from $2.9 million thanks to cost reductions. He also noted cash seasonality from annual renewals, a $2.4 million impact on cash inflows versus Q1, and said the company has over $3 million in annualized savings, $5.3 million of cash, and access to a fully available $10 million credit line. Importantly, he said the company is no longer targeting Q4 breakeven net income and is instead aiming for positive free cash flow.

Analysts focused on whether Q4 revenue growth expectations had changed, how Gaia plans to get acquisition costs back under control, and whether AI/community investments will pay off. Management said Q3 should be similar to Q2 and likely mark the bottom for revenue, with Q4 growing sequentially but not enough to restore profitability. On acquisition costs, management said the higher CPA came from three overlapping issues: rebuilding direct acquisition without discounting, a price increase, and an algorithm change at a major ad partner; they also said they have already taken steps to reduce dependence on that partner. On pricing, Ned said Gaia raised prices on March 1 and does not expect another increase until 2028.