GAIA

Good afternoon. Welcome to Gaia's First Quarter 2026 Earnings Conference Call. At this time, all participants are in listen only mode. Joining us today from Gaia are Jirka Rysavy, Chairman; Kiersten Medvedich, CEO; and Ned Preston, CFO. After the speaker's presentation, there'll be a question and answer session. 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 and 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 referenced 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 time and 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 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.

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 as a subscription renewal. During the first quarter, we delivered one and a half million of operating and $1.1 million of free cash flow. Kiersten will tell you about her 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.

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 three 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 membership, 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%-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.

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 brand. 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. Today, our average member lifetime value exceeds $500 before reflecting the impact of our recent price increase. This is six times our current CPA of $85. We believe this is the metric that matters.

Growing a high-value direct member base requires a more deliberate approach, one built on brand strength, marketing efficiency, retention, and member experience. We are giving the organization the time and focus needed to execute that transition. What gives us confidence is the strength of our existing direct member base. I've mentioned this before. Approximately 70% of our direct members have been with Gaia for more than one year, about 40% have been with us for more than three 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 number two 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 interests 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 Jirka will be interviewed by Dave Asprey at the Biohacking Conference on May 28th. We believe this is an important opportunity for Jirka to discuss the Igniton technology and broaden awareness of the brand. 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 break even 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. Stepping back, we see Gaia as the intersection of several long-term shifts. More people are seeking content that supports growth, meaning, and transformation. 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 meaning. 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.

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 -$0.05 per share, compared to a net loss of $1 million or -$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 31st, 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.

This concludes our remarks. I'd like to open the call for questions. Operator?

Our first question today is coming from Ryan Meyers from Lake Street Capital Markets. Your line is now live. Hello, Ryan. Perhaps your phone is on mute.

Oh, sorry about that. I was on mute. Thank you guys for taking my question. First one for me. You know, if we think about this pivot here to the direct channel, you know, why do you feel like now is the right time to make this switch and the emphasis here on direct?

You know, the timing reflects what I've learned over the past three 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. My role was to assess whether that strategy was still working, especially for the long term. As marketing, you know, 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 FullGuide experience. 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. Third-party, like I said, third-party members just do not have access to those features off our platform.

This is a disciplined decision as newly into this role based on data, customer behavior, and our long-term mission. I believe right now is the right time to focus our resources on higher quality growth, stronger retention and better margins.

Okay. Makes sense. Then if we think back to last quarter, I know you guys did communicate low double-digit growth for FY 2026. Based on everything that you had talked about, it sounds like, you know, we shouldn't be expecting low double-digit growth for this year. Any commentary that you can give us on what, you know, we could expect growth to be? It sounds like you guys did say you expect the business to grow year-over-year, any color there would be helpful.

Hey, Ryan, it's Ned. Really our overarching theme as we've been talking is our continued positive free cash flow to achieve that 20%-25% ARPU by Q4 of this year. That will lead to our break-even P&L for the fourth quarter and full year 2027 profitability for next year. We will see a short to midterm lull or kind of consistent revenue field for the next one or two quarters in the second half of the year, things upticking to achieve that Q4 break even P&L.

Okay. Got it. Thank you for taking my questions.

Thank you. Next question is coming from Jim Sidoti from Sidoti & Company. Your line is now live.

Hi, good afternoon, and thanks for taking the questions. Can you talk a little bit about gross margin, why it was down a little in the quarter and where you expect it to be, you know, as you go through this transition?

Hey, Jim. For Q1, 86% on paper, that does look as though it's down as a percentage year-on-year. We did have a one-time true up around royalties in Q1 of last year. 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. I can go over that in more detail with all of you when we run through your models.

We're talking about a 2-3 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%.

Okay. Can you break out, was there a contribution from Igniton and some of your marketplace initiatives in the quarter?

There were. They were non-material. 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.

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

That's correct, yes.

Okay. All right. Thank you.

Thank you. Our next question today is coming from George Kelly from ROTH Capital Partners. As a reminder, that's star one to be placed in the question queue.

Hey, everyone. Thanks for taking my questions. first one is just on the Igniton. I think you said that Jirka plans to present at the May Biohacking Conference. I was curious, like, what the kind of product roadmap is with Igniton and marketing plan for the year and just any kind of data around your expectations for how the year should roll out for Igniton.

At Biohacking, we're going to introduce new product what's called REM Sleep. What increases dramatically for your REM Sleep.

We probably also introduce a new peptide that get rid of the wrinkles. You know, on the peptide, we're not totally sure we do it right on the Biohacking Conference or after. We have few other non-supplement technologies. It's a technology company, and we wanna 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 supplement will produce majority of the revenue at all. For this year, it will, it would. That's kind of the Biohacking. We will introduce some of the non supplement product as a vision without launching it in a event.

Okay. Okay. What about the capital position at Igniton? Like, how does that look? Is there still plenty of cash there?

Yeah. The company operates close to breakeven and has about $5 million cash and no debt.

Okay. Okay. 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 kinda key initiatives around community.

Yeah, sure. I'll take that. 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. 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 your profiles right now.

Maybe one last question just on the deprioritization of the third party channel. What percentage of your revenue is still derived there? If we look forward a year or two, where is that gonna 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 deprioritize as well?

Well, the third party, historically, we always had a limit, has to be revenue below 20%, it was there till, let's say, two and a half years ago. It was always at least like high teens. Then for last two and a half years, it shifted a lot and get to kind of low 20s to, you know, close to the, not quite 25, but there. It needs to go back into below 20%. Did I answer your question?

Yeah. How quickly do you expect it to get back to that targeted range, Jirka?

Within 12 months.

Within 12. Okay. All right. Thank you.

Thank you. 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.

Thank you everyone for joining. We look forward to speaking with you when we'll report our second quarter results in early August. Thank you.

Thank you for joining us today for Gaia's first quarter 2026 earnings conference call. You may now disconnect.

Good afternoon. Welcome to Gaia's Fourth Quarter 2025 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 and 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 referenced in today's call are reconciled in the company's earnings press release to the most directly comparable GAAP measure. This call also contains time-sensitive information that is accurate only as of the time and date of this broadcast, March 2, 2026. Finally, I would like to remind everyone that this conference call is being webcast, and a recording 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.

Good afternoon, everyone. Our first quarter was a good one. Our revenue increased to $25.5 million with a gross margin of 87.6%, which was above 87.1% average for the year. Free cash flow increased $1.1 million to $1.7 million, and our member count reached first time over 900,000. Revenue for the year grew 11% to $99 million, driven by increased member count and higher ARPU. Gross margin for the year improved 100 basis points to 87.1% from 86.1%. Our gross profit per employee increased to $827,000 from $730,000 during last year. Our free cash flow grew $2.2 million to $4.9 million. Our cash position end of the year improved to $13.5 million from $5.9 million a year ago. And Kiersten will now speak about business.

Thank you, Jirka. Good afternoon, everyone. The past quarter marked an important milestone in Gaia's evolution as we continue building on our strong SVOD foundation while advancing toward a more integrated AI platform. We delivered a strong fourth quarter, growing revenue to $25.5 million and exiting the year at an annualized run rate of approximately $100 million. Subscriber growth for the quarter remained solid, adding 20,000 members. For the year, we generated approximately $5 million in free cash flow and operating efficiency continued to improve with gross profit per employee increasing to $825,000, up from $730,000 last year. With disciplined management of operating expenses, we see a clear path to profitability in 2026. Now before moving forward, I would like to briefly address a leadership update. In January, James Colquhoun's contract reached its conclusion, and we have transitioned his responsibilities to our new Chief Operating Officer, Yonathan Nuta. Yon previously spent over 5 years in executive leadership roles at Gaia from 2016 to 2021 before rejoining the company. He also served as Chief Product Officer at Babylon and Fabric bringing additional operational and product leadership experience to Gaia. With the leadership transition complete, we are focused on execution and building momentum across the business. Moving forward, our direct channel remains central to our progress. Approximately 2/3 of our direct members have been with Gaia for more than 1 year, and that percentage continues to increase. That level of loyalty speaks to the strength of our community and supports long-term lifetime value expansion. With continued investment in AI and community, the direct platform delivers a differentiated experience, driving double retention and approximately double the revenue per member compared to third-party distribution. This directly shapes our distribution strategy. Third-party platforms simply do not support the AI and community capabilities that defined the next phase of Gaia. And as a result, we are intentionally concentrating our capital and innovation focus on our direct platform. Subscriber growth remains important. However, as this strategy progresses, beginning this quarter, we will no longer report total subscriber count as a primary metric. As our business matures, we believe revenue growth, free cash flow, lifetime value and earnings provide a clear reflection of the health of our model consistent with broader SVOD industry trends. Importantly, this strategic focus is translating into financial performance, and we expect to achieve profitability in the fourth quarter this year. With high gross margins and continued operating discipline, incremental revenue is increasingly flowing through to the bottom line, positioning Gaia for sustained profitability and long-term value creation. This year, we will continue to integrate AI across the business. AI is now embedded across major functions from our code base to content production and creative workflows, improving speed, scalability and efficiency. This is reflected in our continued improvement in gross profit per employee. Late last year, we launched a beta version of our AI Guide to direct members, generating more than 2 million prompts in its first 60 days. Early engagement data showed deeper session activity and increased repeat usage following interaction with the feature. Although still early, these trends reinforce our view that combining purpose-built AI with our predominantly exclusive content library enhances the direct member experience. Now as rollout expands, we are extending AI-driven capabilities, including personalized onboarding, intelligent recommendations, enhanced search and contextual guidance, further strengthening the engagement and long-term value member. Given the strength of our direct member relationships and engagement trends, we are implementing a price increase that begins this quarter and will roll out progressively throughout the year. We are approaching this thoughtfully and churn patterns are tracking favorably relative to the prior price increase. In closing, 2026 represents an important year for Gaia. We're entering it from a position of financial strength, strong performance and a clear commitment to our members. We are staying focused on the steady progress as we build a stronger company for the long term. Now over to Ned for the financial details.

Thank you, Kiersten. Revenues for the fourth quarter 2025 increased to $25.5 million from $25.1 million (sic) [ $24.1 million ] in the fourth quarter of 2024, primarily driven by growth of our member base and increasing ARPU. Gross profit in the fourth quarter increased to $22.3 million from $21.3 million in the fourth quarter of 2024. Gross margin was 87.6% for the fourth quarter. Net loss improved to negative $0.5 million or negative $0.02 per share as compared to a net loss of negative $0.8 million or negative $0.03 per share in the year ago quarter. Operating cash flow was $1.8 million for the fourth quarter with free cash flow improving $1.1 million from a year ago quarter to $1.7 million, representing the eighth consecutive quarter of positive free cash flow. Shifting to the 2025 full year financial results. Revenue for the year was $99.0 million as compared to $89.3 million in 2024, representing 11% growth on a year-over-year basis. Gross profit increased to $86.2 million from $76.9 million in 2024. Gross margin increased to 87.1% from 86.1% -- we expect gross margin to remain at this level for fiscal year 2026. Loss for the year was negative $4.5 million or negative $0.18 per share as compared to a loss of $5.2 million or negative $0.22 per share for 2024, with increased marketing spend and amortization and an operating cash flow of $5.7 million. For the year, free cash flow improved by $2.2 million to $4.9 million from $2.7 million in the prior year, further reflecting ongoing operational discipline. Our cash balance increased to $13.5 million as of December 31, 2025, up from $5.9 million a year ago with a fully available $10 million line of credit. The company's financial position continues to strengthen with double-digit revenue growth, improving margins and a growing cash balance through accelerating cash flow generation. We have all of this with 0 debt outside our mortgage on our campus, which we finalized a new 5-year extension in December. In summary, Gaia has a strengthening balance sheet. We continue to manage costs carefully and maintain healthy margins while investing in the strategic areas that will create long-term value for our shareholders. That completes my summary. I'd now like to turn the call back over to Jirka for his closing comments.

For a summary, in this year, we expect similar annual revenue growth rate as we just had with continuing growth of ARPU and focus on direct member, increasing gross profit per employee and continued generation of positive cash flow. This concludes our remarks. So I would like to open the call for questions. Operator, please?

[Operator Instructions] Our first question comes from Ryan Meyers with Lake Street Capital.

Kiersten, congrats on the great quarter and being able to deliver on both the ARPU and the member growth. So just thinking about the member growth that you have seen, can you just speak to the willingness of your customers and their ability to continue to pay these higher prices as you guys enact the price increases as you did in the fourth quarter? And then how you're thinking about that in Q4 -- or sorry, in 2026?

Sure. Well, our member growth in Q4 was driven by strong execution and typical seasonal strength within our core SVOD business. And as far as our price increase, we are delivering more value to our members between rolling out our AI Guide and a very strong content slate and our AI personalization. So as the price increase, we already rolled it out this quarter, and we're already seeing lower churn as compared to last year or the previous price increase.

Got it. And then -- as we think about 2026 and some of the initiatives that you guys do have, Igniton is obviously one of those, how should we think about potentially the ability to monetize that? And then just how you're thinking about that double-digit growth in 2026, maybe the balance across ARPU, and I know you're not going to be giving the member growth or the member number anymore, but just kind of unpack that double-digit growth rate for us in 2026 and what we should be watching for?

Yes. Ryan, it's Ned. So for 2026, our growth will really be coming mostly from our core business. So in regards to the price increase, our shift to more of a direct member base as well as just general momentum that we have. That will be the driver, and we'll be watching ARPU quite closely. We will, on top of that, have some of these new business initiatives. You just mentioned Igniton, but we have some others that will add, and we've given some numbers in the past. But really at this point, on a nearly $100 million revenue business, those are not material yet. The majority of our growth will come from our core business.

On the question about Igniton, Igniton did $3.2 million in 2025. And we really introduced the Igniton products in the second part of the year. Otherwise, it was helped by Photonics. So it will grow. I don't want to speak how fast, but it's definitely -- will probably grow faster than the core business. And I think it was all the questions.

The next question comes from the line of George Kelly with ROTH Capital Partners.

First, just wanted to make sure I didn't miss something. Did you reiterate the guidance for double-digit revenue growth in 2026?

Yes. George, it's Ned. Yes, that's correct. We are reiterating the numbers that you have for 2026. No changes there.

What I said in the call will be roughly same as this year.

And then how much pricing are you taking?

So we're between 14% and 17% price increases. And again, that's to all new customers and to all existing customers in opt-out countries, similar to what we did in October of '24.

Okay. And then a couple of other questions for me. AI licensing, I was wondering if you could give any detail just on the status, if that's still something you're contemplating? And if so, what's the expected timing and materiality of any of those potential AI licensing deals?

Yes. So that really didn't factor in, in Q4. We're really still at the beginning stages of our AI and content licensing efforts. We're still going down that path, and we anticipate maybe a small pickup. But again, these are onetime nonrecurring revenue streams. And anything that would hit here in 2026 would really drive a little bit of upside. The numbers that we've reiterated to you are really our core business, and we're not reliant on those really nonmaterial numbers from licensing. So nothing yet. It's not something that we're going to stop pursuing, but it's not something that we're dependent on either.

Okay. Okay. And then last one for me is just about community. I was wondering if you could go to the mailback -- can you hear me...

Can you repeat that question?

Yes. Sorry about that. So community. Can you give more detail just about the sort of timing of different community initiatives and what you're most excited about, I guess, with respect to the community offering in 2026?

Okay. So for community, we remain on track to launch the community experience later this year, and I will be very, very excited to talk about it when we're closer to launch. But right now, we're still building it.

It's kind of closer to -- that means we might do the different tests, but actual launching is closer to the end of the year.

Yes.

The next question comes from James Sidoti with Sidoti & Company.

Can you give us a sense on what percentage of your 900,000 subscribers are third-party subscribers and what the plan is to convert those subscribers to direct subscribers?

Yes. Jim, it's Ned. So really, we have shared that in the past. I think we've, in the past, talked about trying to limit that to 20% from a number of third-party members as well as revenue attribution. So we'll work towards kind of bringing that down a couple of percentage points to Kiersten's earlier points around kind of a focus on first party. So for 2025, it was around that 20% level, and we'll take it from there going forward.

Okay. And do you have specific things you can do to convert those that 20% to direct members? And can you give us a sense on how that -- how you can accomplish that?

We're not going to planning to per se actively convert a lot. We'll convert some percentage. But I think it's a valid channel. We just need to focus on marketing on our direct channel.

Yes. And we'll be coming out with really strong brand campaigns this year so to let the broader audience know what the value prop is for coming to Gaia as a direct member.

And it sounds like you expect to continue to be free cash flow positive. Any plans for that cash? Are there acquisition targets out there? Do you plan to share buyback? Can you share what your plans are for that?

Yes. So Jim, just to be clear, our plan is to continue to be free cash flow positive. We've been free cash flow positive the last 8 quarters. But what Kiersten shared earlier is for us to be P&L positive by Q4 of this year and really not to comment on any of those other specifics. We have a strong business model with our SVOD business. We are rolling out some of these new strategic initiatives, but not really ready to comment on any sort of acquisition or other elements at this time.

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

Well, thank you, everyone, for joining, and we look forward to speaking with you when we report the first quarter results in early May. Thank you.

Thank you for joining us today for Gaia's Fourth Quarter 2025 Earnings Conference Call. You may now disconnect.