You guys are ready? Awesome. Good morning, everyone. Thank you so much for coming to the LD Micro Invitational. I believe it's our sixteenth annual. The entire reason for this event is because we simply ran out of space for the main event later in the year. It also allows us to kind of showcase some of the up-and-coming na mes in the small and microcap space. As per tradition, track one first morning slot is always given to a very special company. A company that I believe not only benefits shareholders, but also benefits society as well. I've had the great pleasure of knowing these guys for many, many years now.
For full disclosure purposes, I've been a longtime and loyal shareholder, and the entire premise of Gaia, in my eyes, is that it wants to, it believes that if you expand your mind, you can transform your life. I truly believe that, and it has truly helped me as an individual. Whenever I see these guys at my conference, I always get sentimental, and I'm very proud of what they are building. Without further ado, I'd like to give the mic to the CFO of Gaia, Mr. Ned Preston. Thank you.
I was just Someone just asked me if I'd been to these before. I think this is the 4th or 5th I've been here. 3rd time to this great hotel. We also participated in San Diego last fall and New York. Thanks for allowing Gaia to be here once again, Chris. It's our privilege, our honor. My name is Ned Preston. I'm the CFO for Gaia. I've been here at the company about three years. I'm just gonna go through some typical slides. These can be found on our investor presentation, but I'll try to give you additional color tying together some of the points we made in our most recent earnings announcement and then leave time at the end for Q&A.
Before I get going, I was saying to some other folks up here, my experience last night flying in here, I was supposed to get into L.A.X. at 10 P.M. About 10:30 P.M., I hear that we're landing on Ontario, and I'm thinking Ontario, Canada. No, it's Ontario, California. There was a group of us that spent about six hours on the tarmac at Ontario, California last night. Got in here about 4:30 A.M. If you see some sleepy I was coming in from Boston, but I think there were some other United flights from the East Coast, you might see some lot of coffee today. Okay. What is Gaia?
When I came here, literally, I'll never forget three years ago coming here, and a lot of people were like, "Oh, Gaia, I have your yoga mats at home, and we practice yoga and meditation." That's changed quite a bit. I grew up in Boulder, Colorado, where our campus is located. We're on about 14 acres, over seeing the Flatirons and right close to University of Colorado. We switched from a Gaia yoga mats brand to a streaming company back in 2015. The company's actually been on the Nasdaq for 26 years. It joined the Nasdaq in 1999. Pretty nice. Gaia, G-A-I-A, which means Mother Earth in Greece. We transformed, to use Chris' earlier word, to a streaming company, back around the time that Netflix was transitioning from those little yellow DVD envelopes to streaming.
Gaia was doing the same thing. We are a, as it says there, a premium SVOD channel. I'll elaborate on a couple of subsidiaries that we are also working on currently right now. Very niche content into really three main categories, as you can see there, personal growth and transformation, which is what Chris was just commenting on and which we're actually being known more and more around. Most of our viewership is around the transformation as well as ancient wisdom and unexplained mysteries. This is an area where anything from ancient civilizations to UFOs. We're excited for the new movie coming out on June 13, Disclosure. We think a lot that'll drive a lot of people to find out more information about UFOs and possibly come to our platform to learn more.
Wellness and yoga, which is really what we're known for. Starting out as a yoga and meditation company, but a lot around wellness, alternative health, and just overall well-being. Our core demographic is changing. We've been talking about it being mostly female, two-thirds female, kind of 45, 65 years old, highly educated, pretty high household income. This is changing. I've seen it firsthand in the three years that I've been here. I think we're going downstream, picking up more male demographic, definitely younger demographic. I'll comment on here in just a minute what artificial intelligence has meant to us. You are seeing more younger people getting especially not only into, like, wellness and yoga, but into personal growth and transformation. So, I'll comment on that. That core demographic, we are starting to see us go downstream there.
Finance highlights, very strong unit economics. This is what brought me to Gaia back three years ago. I spent most of my career working in Silicon Valley and places like Chicago and Boston for high tech companies, a lot of time with SaaS companies, like Cisco and Akamai, PTC. When I came to the company, I was like, "Well, this is great." You know, we're starting to generate positive free cash flow, which we've done for the last nine quarters. Very high gross margins at 86% and 94% cash contribution margin. This accelerating CAC to LTV growth efficiency. I was kind of looking at this, and I'm like, "This is, like, almost like a lifestyle SaaS company." Like, software as a service, it's, like, got a recurring revenue stream, very high margins.
As long as we can kind of, you know, retain our customers, it's a very scalable model, which I'll elaborate on here in just a moment. Addressable market, we feel as though we're at just the tip of the iceberg. We're just under 1 million members curr ently. We think that that could be at least 5 million, as you can see from this slide. We think that we're under-penetrated even in the United States. We're starting to come out with a lot more branding, as this new Spielberg movie spills out. I was mentioning earlier, Disclosure. You're starting to see a lot of Gaia in print ads and email. We're not just using, you know, Meta, Facebook anymore.
We're getting more into TikTok and some other platforms, Google, as well as, I'll comment on our partners in just a moment here. We do think that the market is growing. We think we're becoming more mainstream. I remember again when I came here and people were saying, "Oh, you're Gaia yoga mats." A year later, they were like, you know, "Hey, tell us a little bit about cold exposure and ice baths and, you know, all these things that are covered on your site." It's really becoming more mainstream. Funny story I was just sharing with someone. I actually live in Boston and commute into Boulder every week where I grew up and have family. When I first got the job, people in Boston, as you guys know from the Northeast, are kinda sassy and funny.
I introduced myself and I said, "I'm Ned, I'm the new CFO at Gaia." People would look at me, "Gaia?" They'd be like, "Oh, it's this cult out in Colorado, Gaia, right?" Now I hang out in the Northeast, New York, Boston, Connecticut, Vermont, it's starting to spread. You go to these places, I'm sure you've seen it wherever you live, and there's stores that sell the supplements and peptides and talk about these topics more and more just really in the last couple of years. Our annual revenue in the time that I've been there has gone kind of low 80s to just under 90 in 2024 to just under $100 million last year. In that timeframe, we went from 800,000 net members to about 850. We finished last year just over 900 members.
This is actually something. This is a slide, especially the members count, that we'll stop using after the next quarter. I use it as people get to know Gaia, but we announced, like a lot of other streaming companies, at the beginning of the year that we're going to focus more so on other key performance indicators like ARPU, like churn or attrition metrics, and less so on members. It's something that we could get over 1 million members easily if we wanted to go to India or somewhere in Asia and just get members. Back to my kind of lifestyle SaaS, we really are trying to grow the business based on solid, recurring, high LTV members. The members itself is not something that we'll be reporting on quarter in and quarter out.
ARPU, people will be like, "You're not gonna give us members, but we're gonna continue to give you ARPU." It'll be kind of relatively easy for people to back into it to a certain point, although we are expanding into some different business offerings. Our ARPU has increased. We did our first price increase in over four years back in 2024, so you can see the jump to about $106 annual recurrent or annual revenue per member. At that time, we raised the pricing from $11.99 to $13.99, so about a 17% increase. We really, we just did it because we hadn't done it ever for existing members, and we had been four years for new members. We were expecting a churn event. It was slightly less than what we were expecting.
Like many other streaming companies, we turned around and did another price increase 18 months later, so just this past March. March 1 of 2026, we increased pricing at another 14%, so from $13.99 monthly to $15.99. This time, again, this time we were more proactive. We didn't take it for granted that, you know, hey, Paramount Global and The Walt Disney Company and Netflix raises price all the time we should too. We know that we're a niche market. We know that we had to show the value proposition to our members. Again, it's been even better. Actually, our churn event's been even lower here this last go around, which is great to see. Gross profit per employee, this is another big reason why I came to the company.
Extremely scalable business in that we're driving over $800,000 per employee in gross profit, and we're trying to drive that to $1 million gross profit per employee. We only have 110 permanent employees, maybe another 25, 30 contractors. You're talking about a company all sitting there right in Boulder, Colorado, 140 people generating over $100 million in revenue. Quite efficient. Kind of our secret sauce, as I like to call it, is content and how we produce and create our content. It's again done on-site. We have a 150,000 square foot building with three big studios. Back kind of in that 2023, 2024 timeframe when I was joining, you know, there were some out here, you know, there were some strikes going on and stuff.
That didn't impact us at all because all of our production and all of our people producing and creating our films are Gaia employees there in Boulder. So we're fully independent of that. What's cool is that a lot of our content is greenfield, if you will, in that, you know, you see the second bullet there, $2 million of content produced in 2024 has returned over $27 million in gross profit. Even back to this Disclosure, you know, a lot of people are starting to get more interested with the administration coming out and talking about UFOs, and a lot of the stuff they're coming and watching is not just stuff that we've created in the last year or two, but they're watching content that we created, you know, 10, 12 years ago.
That from a business standpoint is obviously quite exciting and efficient for us. Our gross profit to content efficiency, you know, for $86 million in gross profit, it only took us $39 million. Our multiple's over 2 times, whereas, you know, a lot of the big boys are significantly less than that. Much different model. I'm very careful not to compare us to Netflix, but a lot of times, we fall into that category. International expansion, very exciting here. Although going back to what I said earlier, we still have a lot of opportunity to grow in the United States. We're at only at 40% outside of the United States. We could grow faster because we are in Spanish and German and French. We'd like to get into Portuguese.
We think the Brazilian market would be a great market for us to get into. As you can see, we have 98% international rights of our content library. We're expanding more quickly and a lot less more expensive in other languages using AI, things like ElevenLabs, Twelve Labs. That has become a lot faster and cheaper over the last couple of years. We're members in over 185 countries. A big opportunity here, but we still have a lot of work to do in the U.S., a lot of customers to capture. We'll do that through using different channel partners. We have a great relationship with Apple and Android, Roku. That's how a lot of times people find us. On the Apple site, we have great ratings and reviews, very easy for people to pick us up and join.
Amazon from a third-party standpoint, people find us there as well. We have a great relationship with Amazon, almost too good. One of the things we started commenting more in our calls is that we were growing our member base a little too quickly through Amazon, and that's not truly a full-fledged member when we get them through Amazon. We don't have their email address. We don't have the ability to email them. They can't use or leverage our AI platform or technology. When we expand to a community later this year, we really would like our members to come to us more directly just from a pure margin standpoint as well. Future growth, and these are kind of our ARPU and retention drivers. AI, we invested a lot.
We did a raise in February of 2025 and raised money specifically around AI and around community. We were actually able to accelerate the AI just ’cause it moves so quickly. We launched last November 1st of last year, proprietary AI kind of platform. Think of it as like ChatGPT for spirituality and people. Coming in the first two months, we had over 2.5 million queries from our Gaia members. Think of it as it's much more than coming in, like my wife and I go in and say, "Oh, if you've liked this on Apple or Netflix, you might like this show." Our AI definitely does that. That's table stakes. It really is like, "Would you like to learn more about the pyramids of Giza? Would you like to, you know, learn more about Peru?
Would you like to go on trips with the content, talent and go to Peru? Digest it in a completely different manner. I've seen I have a 22-year-old that just graduated from college and an 18-year-old back in Boston, and how they digest is much differently than how my wife and I digest. We'll watch a 50-minute show, but a lot of 20 and 30-year-olds, as you've probably seen, they're going in and they don't have 45, 50 minutes. They wanna sit there and say, "Hey, I wanna learn about the pyramids of Giza," and it's click, click. You know, "Tell me more about this." Show me a two or three-minute video on that. It's all pulling from our library. It's been really exciting to see.
Going back to what I was talking about around going downstream, our AI capabilities have really taken off just in like the first six months that we released that. I think that helped our price increase be digested the way that it was. The Gaia community, that's, we have a e-commerce site that we have or a marketplace. Later this year, we'll be rolling out a Gaia community where people, like-minded people can not only come to our campus. Historically, they'd come to our campus and watch and participate in our Gaiasphere events over a Saturday and Sunday. Now they'll kinda be able to do that, think of it like a dating app for people spiritually minded. We're really excited about that. Lastly, Igniton. I would really encourage you all.
I'm not gonna really go into depth on it here, but if I have meetings with you, remind me to talk to you about Igniton. It's a subsidiary that Gaia owns two-thirds of. It was launched a year ago, last May at a Biohacking Conference down in Austin, Texas, and we're gonna be there again here in a couple of weeks. It's a technology that we're able to enhance, currently two supplements around cognition and longevity. We're gonna launch two more technology enhanced, a peptide for skin, as well as a sleep, a better REM sleep supplement here in two weeks at the Dave Asprey Biohacking Conference. It's been very interesting. It's, go to the website 'cause I'm not gonna do it justice, talking about the science.
If you go to the website, it's just www.igniton.com, so like think ignition without the final I. We're in studies out of Concordia University. We've had been in medical journals, so far so good. It's more about Gaia's investment into this company, Igniton. The first round was a $40 million post-money valuation. Second round of funding was a $106 million post-money valuation back in October of last year. We're working on a third round. This is an exciting area. If you go back and look at Gaia's history, we did something similar back in like 2009 through 2012, where we incubated a solar company then spun it out and sold it. Gaia benefited greatly from that on their balance sheet. That's what we're doing with Igniton currently.
I'm gonna kinda touch upon a couple things I mentioned at the last earnings call. Just two more slides, and I promise I'll leave some time for questions. This is a revenue benchmark slide that I've had in here for the last 2.5 years. I kept on People were like, "You really think you're gonna get to $100 million and generate $5 million in free cash flow?" We did it. Last year we were just under $100 million, at $99 million and just under $5 million in free cash flow. One of the things that investors were asking me was, "Well, you know, we understand this is a pro forma, but when do you think you could get to $150 and eventually $200?"
We did come out on our last earnings call, and we said $150 is three years out. By full year 2029, we see the $150 million in revenue, and that $39.3 million in adjusted EBITDA, and then having that free cash flow margin up over 15%. And this goes back to what I was talking about earlier about the scale and of our business. We really have those high margins that we don't have to put a lot more money into getting new members and driving increased ARPU. It wouldn't be a finance CFO if I didn't end with the balance sheet here. Very strong balance sheet, consistent even with the investments into AI and into community. We still have over $13 million in cash.
That doesn't include another $10 million-$15 million line of credit that we have access to for growth. Have not had to lean on that for the past three years, good to have. What's not on our balance sheet are things like the media library, our member base, and NOLs, and then the Igniton valuation, our piece of that. I guess the point here is that we feel as though that's why I'm here. We feel as though our stock is a good buy right now. We have very strong financials and a strong core business with some exciting upsides to new business models. With that, I'm gonna end five minutes early here and see if there's any questions from you all.
Would you ever consider adding a linear cable channel, or does the math not work out anymore? Does it kind of work better?
Yeah, we have considered it. There's other companies that have gone down that path. We wouldn't do that just based on where we're at. We really are niche. We really are unique. I mean, there are big companies that get into, like, ancient civilizations and things, but their depth of their library. We're always willing to partner and looking for opportunities for acquisitions, to be honest, or, you know, more so than mergers. We're not considering that currently. Yeah. Yeah.
Can you tell us more about the, I don't know what you were saying, sorry, the AI, when how it was developed? Like, obviously I'm just looking at how it was developed, the vision for it? How it might work with the platform.
Yeah, it's actually, we have a really phenomenal board, people that have been in business for a long time and have kind of seen the waves come and go. One gentleman in particular, Keyur Patel, who was very early stages with PayPal, Akamai, and Amazon, he about 12, 16 months ago said, "You guys have to get in on AI." We went and did that raise, we went out and hired an AI team, we just right out of the people with experience, but, you know, professors and younger people out of University of Colorado, we built it. We built an AI. It's pretty crazy. You go over in their area, it's, like, all these three-dimensional things, and they're literally going out to our library of 10,000 shows.
They're kind of categorizing everything, so that if someone asks it a question, it can answer it in terms of, like, a Gaia and spirituality. We call it Sage on the Stage, where if it were, say, you know, if I were to go into ChatGPT, "What's the meaning of life?" or, "What happens when you die?" you'd probably get a pretty scientific answer. Our AI agent would be more so, "What From what point of view would you like to for me to answer that question?" When, you know? It's a very smart interactive. More importantly is when you ask the question, it says, "Would you like to go and watch either full content, like a 45-minute show or a clip of some content on that subject?"
It's very unique. I mean, we're not just a streaming company. People will kind of come to our platform to learn about things very quickly, and it doesn't have to just be through streaming. Does that make sense?
Yes.
Yeah. I mean, it's this gentleman here. Yeah.
Yeah. How much do you own at Igniton? Are you majority owner, and if so, what's the percentage?
Yeah. We own 67% of it. We are consolidating it into our financials currently. Yeah, the next round, our plan is to most likely we won't invest in the next round because it'll be north of $100 million on the valuation. Our plan is to most likely keep over 50%, so we continue to consolidate. Although, in the past, like I was using SolarCity, if the price was right, we would go under 50%. It's more important to Gaia that we give back to our shareholders, that's why we're investing in it. There are synergies between Igniton. We went out and marketed to all of our members back in the fall and winter last year, and that kind of helped us launch Igniton.
Again, 67% plan is to stay over 50%, but also open if things take off. Right now I'm actually very interested in this Biohacking Conference because we've been doing supplements, and now peptides are everyone's talking about peptides. When we go to that conference, last year, our founder, Jirka Rysavy, who's very well known in our space, got up on stage and presented, and literally a line was out the door at this Biohacking Conference, and we sold out of, like, 4,000 bottles in four hours, right. Well, we're taking 6,000 bottles down this time, and we're introducing peptides and sleep. We'll see how it goes.
What were the valuations? You said $40 million was the first round?
$40 million was first round and $106 post-money valuation.
This third round, do you know?
Something north of 106, you know, 150 or above. People are interested. It's amazing. When Jirka goes down to this conference, people will just come up to him and say, "We wanna be a part of this.
All right. Thank you.
Yep. Yeah, yeah.
There's no plans for an ad-supported business model at all?
You know, we are talking a little bit. In the past, I would've stood up here and said, "No, no plans to do that." You look at what Netflix is doing, and it you have to at least consider it, right? 'Cause I'm cheap finance guy, I'll watch the ads, you know, and save a little money. There's something to be said about maybe an offering like that that can, you know, streaming company has the most on UFOs, Gaia. When Spielberg comes out, there's gonna be a lot of advertisement about Gaia. Come to our site and learn more about UFOs. It'll help us greatly.
We are officially out of time. If you have any questions, then we can take them outside. Thank you so much.