LOUISVILLE — Gaia Inc. (Nasdaq: GAIA) cut its costs slightly in the first quarter of 2023, but the streaming video provider turned what was a modest profit in the same period last year into a loss this year.
Revenues for the first quarter of 2023 were $19.6 million, 10.1% compared with the year-ago quarter, a result that Gaia said is “due primarily to the post-COVID subscriber contraction experienced industry-wide during 2022.”
The company posted a net loss of $1.1 million, down from earnings of $100,000 in the year-ago quarter.
On the positive side, the company reversed a recent trend of losing paid subscribers, adding 7,500 in the first quarter, ending the period with 766,500 members.
“In the first quarter of 2023 we experienced a return to member growth with per customer acquisition costs decreasing over 10% sequentially,” Gaia CEO Jirka Rysavy said in a prepared statement. “We have continued to see member growth rates increase during April. During February, we completed a rationalization of personnel and related expenses, returning to pre-COVID levels of operating efficiency with $600,000 annualized gross profit per employee. These reductions, combined with other cost-saving efforts, are expected to reduce our annualized spending by over $5 million.”
In early March, Gaia told investors that it had laid off 36 full-time employees, or about 20% of its workforce.
Rysavy said during a March earnings call that the laid-off employees were “mostly contractors that were added over the last two years to offset” reduced productivity when Gaia employees worked from home.
“The myriad of improvements we have implemented over the past six months to attract and retain our members have started to become evident with the growth in our member base for the first time in several quarters,” Gaia chief financial officer Paul Tarell said in a prepared statement. “We have begun to see the benefits from the cost reduction efforts we implemented in the first quarter and expect the full benefit beginning in June. We continue to focus on growing revenues cost effectively, while also generating cash flows from operations in excess of our reinvestment in content that attracts and retains high lifetime value members.”