Awesome. So it looks like we'll get the next presentation started. Our next presenting company is Gaia, which is traded on the NASDAQ under the ticker symbol G-A-I-A. Gaia is a member-supported global video streaming service and community that produces and curates conscious media through four primary channels, Seeking Truth, Transformation, Alternative Healing, and Yoga . Here to tell you a little bit more about the company is Gaia's CEO, James Colquhoun, and CFO, Ned Preston. James and Ned, if you wanna take it away.
Thank you, Matt. Good afternoon, everybody. James Colquhoun, as Matt mentioned, is my name. Ned will be joining me towards the end of the presentation as we get towards some financials, so at Gaia, our mission is to create a transformational network that empowers a global conscious community, and we believe in the power of education and media to transform people's minds, their lives, and also the world, and we're seeing, I believe, like, a lot of meta trends unfold. I'm a trends-based entrepreneur, and in my previous businesses, I've seen a lot of trends towards organic foods, natural foods movement, and, you know, conscious consumerism in that manner, and post-COVID, I believe we're seeing a big upswing in a trend towards more people consuming or desiring to consume conscious media. You know, in the mainstream media landscape, it's a very frenetic environment.
They typically focus on, you know, death, pain, fire, destruction. Distraction is the model, and that creates a big advertising revenue, so we provide an alternative for consumers that are looking for content to uplift and transform their lives. Gaia, at the core business, is a pure play subscription video on-demand service. We have a monthly membership tier at $39.99 and an annual membership tier at $119. We also have a premium membership tier at circa 3x our annual price. And like Matt mentioned, we have content, you know, across three core sort of categories, the first being wellness, yoga, and meditation. Then in the center of the category, which is our largest sort of cohort of subscribers, around personal development, spiritual growth, and transformation. And then in the final category is ancient history, supernatural, and unexplained.
Our core demographic right now, or our target sort of Gaia member, is an archetype we call Celeste. She's in her sort of mid-fifties, you know, she's well-educated, she has high household income, disposable income, and she's a core subscriber of ours. Here you see a little bit of the history of the company. You know, a lot of analysts and investors we've been speaking to, myself and Ned joined operationally at a similar time, you know, recognize us as Gaiam, which was a yoga products company. So this sold yoga mats and yoga material. We sold off that business in 2016 to focus on a pure play digital subscription model. We have over 10,000 titles across English, Spanish, French and German.
85% of our content is exclusive, so we own all that content, which is produced in-house, and we have 98% worldwide rights, so it's very easy for us to expand into other territories. You know, from a finance perspective, we have a highly leverageable model with 93% cash contribution and 85% gross margin, and we currently have over 850,000 active members in over 185 countries, and in a little bit of a background story, I joined Gaia in 2019 when I merged in one of my companies.
I come from a media and production background, so my first two projects were Netflix, and my other two projects, I built a streaming video service in the health and wellness space, merged that into Gaia in 2019, got a board seat, became the second largest internal shareholder, and joined operationally within the last year. S o in terms of TAM, you know, we've seen the global SVOD market explode, you know, over the past five years, and, you know, we're targeting five million total subscriber target, and with international expansion and also, you know, in territory and domestic expansion, we have an enormous opportunity to keep growing our member base. If you look here, this gives us a bit of a snapshot on our members and annual revenue.
If you look at our member growth there, we had a bit of a COVID bump. We've now surpassed that, COVID peak. We lost about 30% of our COVID cohort of subscribers, which is a lot better than most of the streaming industry standards, where they lost about 50%. And if you look down the revenue on the right-hand column, we've stabilized post-COVID, and we're back to growth, in the mid-teens, low to mid-teens currently, while generating cash. So a big thing Ned and I have focused on operationally since joining the business is not only proving out the leverage in the model, but how do we get flow-through from a cash perspective? Because the cash flow positive, sort of smaller cap or micro-cap companies are gonna be what's seen as most favorable.
We generated five consecutive quarters of free cash flow positive growth, and we're targeting $90 million, just north of $90 million for this year in 2024, and then speeding up our growth into the mid-teens for 2025 and onwards with some additional products that I'll be speaking about shortly. In 2019, we also started this transition, so we were spending about 60%-80% + of our revenue on marketing to achieve, you know, faster growth. We pulled that back to about 40%. We've maintained that 40% spend from 2020 onwards, and now post-COVID, we're getting back to growth. Here is a slide on ARPU and GP per employee.
In particular, you know, ARPU is going to, you know, take a bigger swing upwards in the coming years, not only with price increases on our membership tier, but also increasing prices for legacy members. So we've typically grandfathered our subscribers as we've increased prices, and now we've done a test project recently just in the United Kingdom, where we increased prices for all existing members that were on grandfathered pricing. We've seen a really positive result. We increased prices almost 30% in the U.K., and we're seeing a low 3% churn. So the delta on that is quite a big upswing. So we'll be rolling out price increases for all legacy prices in Q4, and then looking for further price increases next year onwards.
There's still a lot of pricing potential there because of the niche service that we offer. So that will improve ARPU. Additionally, we just recently, 5 August 2024 , launched a Gaia Marketplace initiative. And so for me, if I think about the streaming industry, two big standouts are Amazon and Apple, because they have streaming within an infrastructure of a business. So Amazon has e-commerce, and Apple has, you know, the app infrastructure. And so we see streaming as part of our business, but we're building satellite businesses around it to build sort of a more community and network effect. So as we acquire a customer, we're not thinking about them in terms of, or a member, should I say, you know, $119 a year.
We're thinking, how can we lead them into higher price point experiences, training programs, or physical products? Which is the concept of the marketplace initiative. So it launched August fifth, and we have high-priced tours, you know, in the $8,000-$12,000 mark, you know, training programs from $600 to $5,000, and then physical products as well, from about $300 up to about $5,000 or more. And this will book as 100% gross margin, so we'll just be booking the keep on that. And in essence, it's a sort of conscious Costco model, where members get access to a discount.
GP per employee, you see from 2019 onwards, through to currently w e have up there 2023, and currently, we're sort of tracking in the high six hundreds, and we anticipate we'll be able to take this business north of $1 million GP per employee. Additionally, on the content side, we have a very low content spend proportionate to revenue compared to most streamers. So we spend about 11% of our revenue on content. And you can see here as well that on the bottom part of this slide, content produced in 2014 was about $2.2 million, and we sort of measure our gross profit return on content based on viewership. And our return on that 2014 cohort of produced content returned more in 2023 than it did in 2014.
So this is the inverse of most entertainment companies that you see. You know, entertainment, even edutainment companies, they typically have a lot of their viewership period in the first three to six months, whereas we have a really long tail and even increasing viewership over time. We're able to return more on that content spend, more efficiently. In terms of international, like I mentioned earlier, we have 98% of the rights for international expansion on our content library. We have dubbed our libraries into Spanish, German, French, and of course, we have English, and we've launched into those markets. We see these territories more as language-based as opposed to geography-based. In this, in these markets, in LATAM, German is mostly obviously Europe and same with French.
You know, we're seeing exceptional growth, and it's very easy for us to get a reasonable amount of subscribers in those territories. Currently, we're only 35% international, and we anticipate we'll be north of 50% within five years. And we currently have members in actually over 185 countries. In terms of content, a little bit of our secret sauce is we have a 13-acre, 150,000 sq ft campus in Colorado, about 30 minutes from DIA. And so we fly in our talent, and we produce in-house. We have studios where we produce. We do travel for some production, but it's much rarer than producing in-house.
And we have our on-staff team in production, and that helps us sort of stay out of any sort of issues that we've seen with some of the writers' strikes in Hollywood and the bicoastal sort of competition for production staff. And our cost per hour production is around $35,000 compared to Netflix, which is, you know, north of $10 million. So it means we're able to spend a lot lower percentage of our revenue, like I mentioned earlier, on content, and that allows us to spend, like I mentioned, circa 40% of our revenue on marketing, so we can keep up growth and maintain leverage and flow through in the model from a cash flow perspective. In terms of partnerships, we have partnerships with, you know, Roku, iOS, Android, also YouTube and Amazon.
We're part of their video channel. So if you're a Prime subscriber, you'll see Gaia as part of the Prime Video infrastructure, so you can one-click add it. We're currently with Amazon Prime in the U.K., U.S., Mexico and launching Australia and New Zealand shortly, and that's where my accent's from, if you're wondering. We also have Verizon, Xfinity, and Comcast as partners.
And Amazon, for instance, you know, I renegotiated a deal with them when I, when I joined, and they told me, "There's nobody like you that aggregates content in this space in a professional manner, you know, from yoga, meditation, transformation, spiritual growth, ancient history, secrets and cover-ups, unexplained, and that is able to produce, distribute, release on a frequent basis." And we've been featuring in the top 10 apps within the Prime Video channel in the U.S., for most of this year. Now, to some numbers. I'm gonna introduce Ned Preston.
Oh, great, the fun stuff, the numbers. So let me just briefly introduce myself. Ned Preston. It's good to be back in San Francisco. I actually started my career here, back in the mid-1990s with Oracle Corporation. I actually used to work to Charles Schwab for a couple years, and then from there, went on to McAfee, Cisco Systems. I helped the transition, and was actually business partners with Chuck Robbins. And then most recently, I've been out in the Boston area with more high tech companies, Akamai, PTC, Parametric Technology Corporation, as well as an autonomous vehicle joint venture between Hyundai and Aptiv named Motional. So you may ask, why and how did you get to Gaia? And the short answer is I grew up in Boulder.
I still have family in Boulder. That was a major draw to move my family back from the East Coast to the Midwest. However, when I met James and our founder, Jirka Rysavy, I look at Gaia as like a lifestyle SaaS company. When I sat down and looked at this company and the fact that, as you can see from this income statement, that we're driving gross margins north of 85%. It's a revenue stream that's a little bit lumpy. We went through a trough there, as James stated. Back in two thousand and eighteen, you saw tremendous growth. It doubled really in four years from 2018- 2022 A lot of that had to do with the pandemic.
However, coming out of the pandemic, things have flattened out, and this year we're on record to grow north of 12% at over $90 million. And looking ahead, the thing that James and I are most excited about is, as we operate this company and try to have it thought of as a lifestyle SaaS company, the fact that we have a growing recurring revenue stream. We're concentrating on annual recurring revenue. Our base of members has grown from 750,000 members to over 850,000 members. There was a key point in this past year that as soon as we surpassed 770,000 members, we became free cash flow positive.
So as a company, we have spent the last five quarters with positive free cash flow, which is obviously a critical point to get over, and the future is bright, which I will get into on the next slide. Another thing, as you listen to me talking about SaaS companies, and one of the things that James and I are introducing in this next round of investor meetings is the Rule of 40. So growing your combination of revenue and EBITDA margin north of 40%, which is a critical metric for SaaS companies. So our game plan for this year is we'll grow 15% year on year in our Q4.
We will continue to be free cash flow positive, but for 2025 , we will be break even on net income for the full year, and we will be at Rule of 40 by the end of 2025 , which really indicates a lot. So this is a benchmark pro forma that I put into our presentation about a year ago, and we're adjusting this a little bit. We're gonna historically, the company always kinda led with members, which is an indicator of revenues. However, based on a lot of what you just heard from James and the fact that our ARPU's are gonna be going up with the price increases as well as marketplace, we're really gonna kind of transform this slide to be more concentrating and leading with revenue.
So when I came in here, it was just to show the leverage in our model. You may remember a slide that James just showed, that we're gonna have over $700,000 gross profit per employee, not $700,000 in revenue per employee, gross profit per employee. So imagine this, this is another big reason I came to Gaia, is Gaia is going to produce over $90 million of revenue, and we only have 105 permanent employees with, and maybe about another 20. So call it 125 between employees and, and contractors, and we're driving north of $90 million of revenue. So extremely, extremely leverageable model.
But as we laid this out, we wanted to show people as we turn that corner around the 770,000 members, we're generating positive free cash flow this year. And then we kind of put out $900,000 and $1 million. What a lot of investors have been asking us for, though, is just like: What's beyond that? So I think what this slide will look like in another couple of weeks is, what do we look at, at $100 million in revenue, $150 million in revenue, and $200 million in revenue? Because we have been talking about this leverage point and our high cash contribution margin, and everything else, but really, we don't have to grow. We'll continue to invest about 40% on marketing.
We'll continue to invest about 10% or 11% on content, and with the growing revenue, that will obviously mean a lot more money to those critical growth drivers, and then lastly, another thing that really drew me to Gaia is the strong balance sheet. So we currently have just about $5.5 million coming out of our Q2 in cash. That was actually north of $10 million, but we did put an investment into a subsidiary, Igniton, which is just rolling out, and this doesn't even count, we have another $10 million access to a line of credit on top of this. Really, as you look through our balance sheet, it has strengthened since what we've gotten here.
But we kind of put this estimated value column out here, because what's not accounted for in the balance sheet is the fact that we have this media library of over 10,000 shows and content library, which is valued, you know, typically is somewhere between $150 million-$200 million, and so we're just kinda putting that out there on the low end. And then we're also not including our member base. At 850,000 members, many companies would put that out of almost two, you know, valued at $300 million.
And then we have a lot of NOLs as well, that are not included on our balance sheet. So I guess to close just kind of the financial section, we feel very good about our financials. We've had a good run, five quarters in a row, as I said, on positive free cash flow. And as we go into Q4 and into 2025, we're really excited with our outlook.
And then really our job is just to make sure that we continue to speak to Wall Street and our earnings calls, and to all of you, and just make sure that we put numbers out there that are aggressive but achievable, and that we execute like crazy and make sure we exceed expectations. So with that, I think we can turn it over for questions.
[audio distortion] Yeah, I think with the Marketplace initiative first, if I could speak to that. The idea behind that is that we don't need to spend extra money on marketing to promote that. So as we spend money to attract a customer, obviously there's a CAC to LTV that we calculate, and we allocate capital between territories based on that. For instance, our LTV in Germany is really strong. They got great credit cards in Germany.
They like, you know, email a customer support for copies of invoices, very good customers. Then in LATAM, it's a little bit different. You know, they're operating on flimsy cards. So first of all, from an allocation perspective, we go top of funnel. Once they're a member, then we use just email, on-site promotion, contextual promotion, et cetera, to promote these additional services, such as these retreats or experiences. And these are $8,000-$10,000 offerings. And so if you've seen in one of our tentpole series, it's called Ancient Civilizations, and if you've seen that show and you love the experts in it, then you can join one of the experts on a trip to Egypt, and it's seen as an invitation. They're very excited by that.
We also have our live events, so we have three more live events coming up this year, and we've sold out two of them already, with the third one coming in November, and these are essentially add-ons from our successful shows and series, and we don't spend any extra money advertising to our members to sell those, so really, the marketing spend can stay at that 40%, and we believe, based on what we're seeing and what we see in Q4, what we're planning for Q4, which we based on, you know, a lot of historical data, we'll be growing in, you know, the low to mid-teens, at least on a 40% spend.
And then if we can continue to grow top line and then prove out the flow-through, which is net in our job, then if we're at, you know, 25% EBITDA and 15% growth, you know, you start to get to that rule of 40, which is a mythical number. We'll cross $100 million in ARR, recurring revenue, probably like Q2 onwards next year. Q3, we'll cross $25 million. And then, these things happening in succession with the Russell 2000 inclusion, I think is really gonna start to get us on the radar and potentially see an EV multiple more in the SaaS company version, as opposed to where we have come out of in the last twelve months, which we call, you know, micro-cap health. So pretty happy to be out of that at the minute. Thanks.
[audio distortion] So in terms of churn, I, you know, we don't list the data simply because there's so many different ways to talk about churn. Like for instance, Netflix, if a customer leaves and comes back within 11 months, they don't count that as a churn event, and so there's a lot of nuance there. What I will say is, each month, you know, our founder is a math prodigy. He's been involved in a lot of startups. One was Corporate Express, became Staples Advantage. Another one was Wild Oats, became Whole Foods. You know, two or three other IPOs. He's got his eyes set on this subsidiary now, which is very exciting for us, which we have nothing in terms of forecast for 2025. That's almost like an unvalued call option.
But we have this huge data set that we look at each month as executives, and in that, we look at churn by language, we look at it overall, and we're seeing the lowest churn numbers in this quarter than we've seen in the last 12- 18 months. And I believe that's because of something we did at the end of last year. We pivoted much more to an annual membership model, and a lot of the streamers have a lot of their cohort in zero to three months, three to six months. And we really think about how many members do we have, three-year-plus and one-year-plus. They're really the metrics that we guide to a lot internally because we wanna build a business that's not in a zero to 90-day, you know, overweighted in that period.
Like I said, we don't publish data, but internally, we're seeing the lowest churn data in the last eighteen months we've seen, and that makes me happy as a shareholder as well. Average stay for a new member? It depends on where that member's from and how we acquire them. I mean, what I would say is we're about 2/3 of our members are north of a year, and about, you know, 1/3 is north of three years. So we really think in terms of that, and since the end of last year, we focused much more of our marketing efforts on incentivizing annual memberships, so that immediately puts them into a year-plus cohort.
If I acquire a monthly member in the U.S., it varies. Like, if you, I think the way I would answer that is to say year-plus members are the most stable. Three-year-plus members are even more stable than that, and we're north of 50% of our member base is annual members. So, and I want to increase that percentage each year because of the economics in that. And so, yeah, that's about it.
[audio distortion] Sure. We have some free content on YouTube. We have over a million subscribers on our YouTube channel, and we typically open up content strategically for a free viewing for a limited time via an email capture, and then invite them into a membership tier. And typically, it'll be the first few episodes of a series, and then they can keep watching on our site, or we do a premiere of a movie, and then they can keep watching on our site. We had an event in March, a live stream event at our headquarters. We have a live stream event center, which can seat about 300 people, and we live streamed that for free via email capture, and the actual unique people that attended our site to stream for free was over 52,000 people.
And so we can also live dub into Spanish, French, and German, and we'll be leveraging that premium tier live event experience more as we go into 2025 and beyond. Flashing lights, 33 seconds. We'll be around if anyone else has questions. Happy to speak to you in the hallway or meet with you. Thank you.