Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This report contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact are forward looking statements that involve risks and uncertainties. When used in this discussion, we intend the words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “future,” “hope,” “intend” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “strive,” “target,” “will,” “would” and similar expressions as they relate to us to identify such forward-looking statements. Our actual results could differ materially from the results anticipated in these forward-looking statements as a result of certain factors set forth under “Risk Factors” and elsewhere in this Annual Report on Form 10-K. Risks and uncertainties that could cause actual results to differ include, without limitation: our ability to attract new members and retain existing members; our ability to compete effectively, including for customer engagement with different modes of entertainment; maintenance and expansion of device platforms for streaming; fluctuation in customer usage of our service; fluctuations in quarterly operating results; service disruptions; production risks, general economic conditions; future losses; loss of key personnel; price changes; brand reputation; acquisitions; new initiatives we undertake; security and information systems; legal liability for website content; failure of third parties to provide adequate service; future internet-related taxes; our founder’s control of us; litigation; consumer trends; the effect of government regulation and programs; the impact of public health threats; and other risks and uncertainties included in our filings with the SEC. We caution you that no forward-looking statement is a guarantee of future performance, and you should not place undue reliance on these forward-looking statements which reflect our views only as of the date of this report. We undertake no obligation to update any forward-looking information.
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and related notes included elsewhere in this report. This section is designed to provide information that will assist readers in understanding our consolidated financial statements, changes in certain items in those statements from year to year, the primary factors that caused those changes and how certain accounting principles, policies and estimates affect the consolidated financial statements.
Overview and Outlook
We operate a global digital video subscription service with a library of over 10,000 titles, with live communications and live events with a growing selection of titles available in Spanish, German and French that caters to a unique, underserved member base. Our digital content is available to our members on most internet-connected devices anytime, anywhere, commercial-free. Through our online Gaia subscription service our members have unlimited access to a library of inspiring films, cutting edge documentaries, interviews, yoga classes, transformation related content, live events, and more – 90% of which is exclusively available to our members for digital streaming on most internet-connected devices.
Gaia’s position in the streaming video landscape is firmly supported by its wide variety of exclusive and unique content, which provides a complementary offering to other entertainment-based streaming video services. Our original content is developed and produced in-house in our lifestyle campus near Boulder, Colorado. By offering exclusive and unique content through our streaming service, we believe we will be able to significantly expand our target member base.
Our available content is currently focused on yoga, transformation, alternative healing, seeking truth and conscious films. This content is specifically targeted to a unique member base that is interested in alternative content provided by mainstream media. We have grown these content options both organically through our own productions and through strategic acquisitions or licensing. In addition, through our investments in our streaming video technology and our user interface, we have expanded the many ways our subscription member base can access our unique library of media titles.
Our core strategy is to grow our subscription business domestically and internationally by expanding our unique and exclusive content library, enhancing our user interface, extending our streaming service to new internet-connected devices as they are developed and creating a conscious community built around our content.
We are a Colorado corporation. Our principal and executive office is located at 833 West South Boulder Road, Louisville, Colorado 80027-2452. Our telephone number at that address is (303) 222-3600.
Results of Operations
The table below summarizes certain of our results for the periods indicated:
Years ended December 31,
(in thousands, except per share data)
Revenues, net
Cost of revenues
Gross profit
Selling and operating
Corporate, general and administration
Loss from operations
Interest and other income, net
Loss before income taxes
Income tax expense (benefit)
Loss from continuing operations
Loss from discontinued operations
Net loss
Net loss attributable to noncontrolling interests
Net loss attributable to common shareholders
The following table sets forth certain financial data as a percentage of revenues, net for the periods indicated:
Years ended December 31,
Revenues, net
Cost of revenues
Gross profit margin
Operating expenses:
Selling and operating
Corporate, general and administration
Total operating expenses
Loss from operations
Other income, net
Loss before income taxes
Income tax expense (benefit)
Loss from continuing operations
Loss from discontinued operations
Net loss
Net loss attributable to noncontrolling interests
Net loss attributable to common shareholders
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Revenues, net increased $9.7 million, or 10.9%, to $99.0 million during 2025, compared to $89.3 million during 2024. This was primarily driven by an increase in member count as well as an increase in Average Revenue Per User (“ARPU”).
Cost of revenues increased $0.4 million, or 3.2%, to $12.8 million during 2025 from $12.4 million during 2024, with gross profit margin of 87.1% in the current year compared to 86.1% in 2024. The increase in the cost of revenues is primarily related to timing of media library amortization. Gross profit margin increased during 2025 from 2024 primarily due to improvements in ARPU.
Selling and operating expenses increased $7.1 million, or 9.5%, to $81.9 million during 2025 from $74.8 million during 2024 and, as a percentage of revenues, decreased to 82.7% during 2025 from 83.8% during 2024. The increase was driven primarily by an increase in marketing expense.
Corporate, general and administration expenses increased by $1.6 million, or 20.5%, to $9.4 million during 2025 up from $7.8 million during 2024 and, as a percentage of net revenue, increased to 9.5% during 2025 from 8.7% during 2024. The increase was primarily driven by legal fees, customer acquisition costs and higher compensation costs during 2025.
Income tax expense (benefit) reflects a current year provision of $0.2 million compared to the prior year provision of $(0.0) million from income taxes due to an increase in the current and deferred tax liability.
Quarterly and Seasonal Fluctuations
The following tables set forth our unaudited results of operations for each of the quarters in 2025 and 2024. The unaudited financial information includes all adjustments, consisting solely of normal recurring accruals and adjustments, necessary for a fair presentation of the results of operations for the quarters presented. You should read this financial information in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The results of operations for any quarter are not necessarily indicative of future results of operations.
Year 2025 Quarters Ended (Unaudited)
(in thousands, except per share data)
March 31
June 30
September 30
December 31
Revenues, net
Gross profit
Gross profit margin
Net loss
Net income attributable to noncontrolling interests
Net loss attributable to common shareholders
Loss per share
Basic
Basic (attributable to common shareholders)
Diluted (attributable to common shareholders)
Weighted average shares outstanding
Basic
Diluted
Year 2024 Quarters Ended (Unaudited)
(in thousands, except per share data)
March 31
June 30
September 30
December 31
Revenues, net
Gross profit
Gross margin
Loss from continuing operations
Loss from discontinued operations
Net loss
Net income (loss) attributable to noncontrolling interests
Net loss attributable to common shareholders
Loss per share
Basic
Basic (attributable to common shareholders)
Discontinued operations
Basic loss per share
Diluted
Diluted (attributable to common shareholders)
Discontinued operations
Diluted loss per share
Weighted average shares outstanding
Basic
Diluted
Our member base growth reflects seasonal variations driven primarily by periods when consumers typically spend more time indoors and, as a result, tend to increase their viewing. This drives quarterly variations in our spending on member acquisition efforts and the number of net new subscribers we add each quarter but does not result in a corresponding seasonality in net revenue. As we continue to expand internationally, we also expect regional seasonality trends to demonstrate more predictable seasonal patterns as our service offering in each market becomes more established and we have a longer history to assess such patterns.
Critical Accounting Estimates
We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States, which require us to make judgments, estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Note 2 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K summarizes the significant accounting policies and methods used in the preparation of our consolidated financial statements.
We believe the following to be critical accounting policies whose application has a material impact on our financial presentation, and involve a higher degree of complexity, as they require us to make judgments and estimates about matters that are inherently uncertain.
Media library
Media library represents the lower of unamortized cost or net realizable value of capitalized costs to produce our proprietary media content, rights obtained through license arrangements and digital media content acquired through asset purchases or business combinations.
The value of our produced media library consists of capitalized costs incurred to produce original media content, including salary and overhead costs of our in-house production team and other third-party costs.
Our licensed media library is obtained through license arrangements. Generally, we pay an advance against a percentage royalty or an upfront license fee in exchange for the distribution rights for a specific license window, but we may also obtain a license for a fixed fee for perpetuity. These payments are capitalized at the time of payment. Certain agreements also include an ongoing royalty obligation, which entitles the licensor to a share of the revenues generated from the licensed works. These expenses are calculated and accrued on a monthly basis and included in costs of revenues. We pay these accrued royalties on a quarterly basis and therefore have included the related liability in accrued liabilities.
The value of our acquired media library consists of the acquisition date fair value of media assets obtained through asset acquisitions and business combinations recorded at the estimated fair value of the titles acquired, which is based on a number of factors, including the number of titles, the total hours of content, the production quality and age of the acquired media assets.
We amortize our media library in cost of revenues on a straight-line basis over the shorter of the license period or the estimated useful life of the titles, which typically ranges from 12 to 90 months. The amortization period begins with the first month of availability on our service.
Management reviews content viewership to determine whether viewing patterns correlate with initial estimates supporting the amortization period utilized. If current estimates indicate that viewing is significantly higher in earlier periods relative to the remaining amortization period, we will begin amortizing the respective titles on an accelerated basis over the amortization period. Due to our exclusive content and growing member base, our viewership trends have continued to support both the amortization period and the straight-line basis of amortization with no additional amortization recorded.
Our media library is reviewed for impairment at the film group level when an event or change in circumstances indicates that the carrying amount of the film group may not be recoverable. Recoverability of the film group is measured by a comparison of the carrying amount of the film group to estimated discounted future cash flows expected to be generated by the film group. If the carrying amount exceeds the estimated future cash flows, an impairment charge is recognized by the amount by which the carrying value exceeds the fair value. No impairment charges were recorded during 2025 or 2024.
Goodwill
Goodwill represents the excess of the purchase consideration over the estimated fair value of assets acquired less liabilities assumed in a business acquisition. We have only one reporting unit; therefore, goodwill is assessed at the enterprise level. We review goodwill for impairment annually as of October 1 or more frequently if indicators of impairment are identified. We have the option of first assessing qualitative factors to determine whether events and circumstances indicate that it is more likely than not that the estimated fair value of goodwill is less than its carrying amount. If the estimated fair value of goodwill exceeds its carrying amount, we consider the goodwill to not be impaired. If the carrying amount of goodwill exceeds its estimated fair value, we use both a comparable market approach and an income approach to test for potential impairment. The market approach follows the guideline public company method to establish valuation multiples for comparison. The income approach follows a traditional discounted cash flow model. Primary assumptions for each approach include revenue projections, operating expenses, discount rate, control premium, and terminal growth rate. Projections are dependent on management assumptions, which are partly based on the Company’s historical experience. The results of these approaches are evaluated against the Company’s market capitalization for reasonableness. The process of evaluating the potential of goodwill is highly subjective and requires significant judgment at many points during the analysis. Application of alternative assumptions and definitions could yield significantly different results. During 2025 and 2024, no of goodwill was recognized.
Income Taxes and Deferred Tax Balances
Deferred income tax assets and liabilities are recorded with respect to temporary differences in the accounting treatment of items for financial reporting purposes and for income tax purposes. The tax expense or benefit related to ordinary income or loss must be computed at an annual effective tax rate and the tax expense or benefit related to all other items must be individually computed and recognized as a discrete item when it occurs. Where, based on the weight of available evidence, it is more likely than not that some amount of recorded deferred tax assets will not be realized, a valuation allowance is established for the amount that, in management’s judgment, is sufficient to reduce the deferred tax asset to an amount that is more likely than not to be realized.
As we have historically had cumulative losses, we have not released the current valuation allowance. The timing of the release of the valuation allowance will be dependent on cumulative income for a period of 36 months and an expectation that we will not have cumulative losses in the future.
A tax position must meet a minimum probability threshold before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.
Non-Income Taxes
The Company accrues for non-income tax assessments from foreign jurisdictions related to prior periods and recognizes the expense within selling and operating, when deemed probable and estimable. Once the requirement to remit non-income taxes to foreign jurisdictions has been established, we present revenues net of the non-income taxes collected from members and remit such amounts to foreign tax authorities.
Share-Based Compensation
We recognize compensation cost for share-based awards based on the estimated fair value of the award on the date of grant. We measure compensation cost at the grant date based on the estimated fair value of the award and recognize compensation cost upon the probable attainment of a specified performance condition over the estimated performance period or for time-based awards over the service period. Since 2019, we have granted restricted stock units, for which we utilize the market price of our common stock on the date of grant to estimate fair value. In May 2025, we awarded performance restricted-stock units (“PSUs”), for which we utilized the market price of our common stock on the date of grant to estimate fair value.
Liquidity and Capital Resources
Our capital needs arise from working capital required to fund operations, capital expenditures related to acquisition and development of media content, development and marketing of our digital platforms, acquisitions of new businesses and other investments, replacements, expansions and improvements to our infrastructure and future growth. These capital requirements depend on numerous factors, including the rate of market acceptance of our offerings, our ability to expand our customer base, the cost of ongoing upgrades to our offerings, our expenditures for marketing and other factors. Additionally, we will continue to pursue opportunities to expand our media libraries, evaluate possible investments in businesses and technologies and increase our marketing as needed.
On December 19, 2025, Boulder Road and Westside (collectively, the “Borrower”) entered into a business loan agreement with KeyBank National Association (“KeyBank”), as lender, providing for a mortgage loan in the principal amount of $11.4 million (the “2025 Mortgage Loan”). The promissory note evidencing the 2025 Mortgage Loan bears interest at a fixed rate of 5.090% per annum, matures on December 19, 2030, and is secured by a deed of trust on our corporate campus, a portion of which is owned by Boulder Road and Westside as tenants-in-common and the remainder of which is owned by Boulder Road. The loan proceeds from the 2025 Mortgage Loan were used to refinance the 2020 Mortgage Loan. Westside and Boulder Road each received 50% of the proceeds and are each responsible for 50% of the monthly installments. The 2025 Mortgage Loan contains customary affirmative and negative covenants (each with customary exceptions) for loans of this type, including limitations on the Borrower’s ability to incur liens or debt, make investments, or engage in certain fundamental changes, and is fully guaranteed by Gaia. Additionally, the 2025 Mortgage Loan requires Boulder Road to maintain a minimum Debt Service Ratio – Pre Distribution of 1.35 to 1.00 annually and a minimum Debt Service Ratio – Post Distribution of 1.15 to 1.00 annually. As of December 31, 2025, the Borrower was in compliance with all related covenants. The 2025 Mortgage Loan has a remaining balance of $11.4 million as of December 31, 2025.
On December 28, 2020, the Borrower entered into a loan agreement with First Interstate Bank (formerly Great Western Bank), as lender, providing for a mortgage loan in the principal amount of $13.0 million (the “2020 Mortgage Loan”). The promissory note evidencing the 2020 Mortgage Loan bore interest at a fixed rate of 3.75% per annum, and was scheduled to mature on December 28, 2025 before being refinanced by the Borrower with the proceeds from the 2025 Mortgage Loan.
On July 25, 2025 (the “Closing Date”), the Company, entered into a Second Amendment to the Credit and Security Agreement (the “Amendment”) among the Company, the subsidiary guarantors party thereto, and KeyBank National Association (the “Lender”), which amends that certain Credit and Security Agreement, dated as of August 25, 2022 (as amended prior to the Closing Date, the “Prior Credit Agreement”), among the Company, the subsidiary guarantors from time to time party thereto, and the Lender.
The Amendment amended the Prior Credit Agreement to, among other things, (i) refinance and extend the prior revolving credit facility with a revolving credit facility in an aggregate principal amount of up to $10 million (which may be increased up to $15 million) that matures on August 25, 2028, the loan proceeds of which may be used for working capital, general corporate purposes, and permitted acquisitions, (ii) modify the interest rate applicable to revolving loan advances to 1.75% per annum for advances that are SOFR loans and 0.75% per annum for advances that are base rate loans and eliminate the 0.10% per annum SOFR index adjustment, and (iii) provide for a maximum leverage ratio of 2.00 to 1.00 for each computation period. Borrowings under the Amendment are available for working capital and general corporate purposes and permitted acquisitions. There was no outstanding balance as of December 31, 2025.
On August 25, 2022, the Company entered into the Prior Credit Agreement, which provided for a revolving credit facility in an aggregate amount of $10 million and was amended by the Amendment on July 25, 2025. There were no outstanding borrowings under the Prior Credit Agreement as of December 31, 2024.
On September 30, 2025, Gaia entered into a cost method investment in Orion Architect LLC (“Orion”) for $2 million according to ASC Topic 321. The Company has less than 10% ownership and does not have significant influence over the investee as there is no representation on the investee's board of directors, no participation in policy-making decisions, and no material intercompany transactions. The initial valuation of this investment will be made at historical cost and adjusted only for impairment or observable price changes from comparable transactions. No unrealized gain/loss will be recognized unless an observable transaction occurs. The investment will be subject to impairment testing and any permanent declines in value will be recognized in net income.
We began to generate positive cash flows from operations since 2020 and have continued to generate positive cash flows from operations each subsequent quarter. We expect to continue generating positive cash flows from operations during 2026. We generated approximately $5.7 million in cash flows from operations during 2025, which helped fund the ongoing investment in our content library and the technology platform we use to deliver the content to our members.
We intend to invest approximately 15%-20% of our revenues each year to support continued investment in our content library and technology platform. This spending is entirely discretionary in nature with no contractual commitments and due to our in-house production capabilities, we can scale our content investment based on the cash flows generated from operations if necessary to ensure we have sufficient liquidity to operate our business into the future. As of December 31, 2025, our cash balance was $13.5 million.
As described in Note 15, in April 2024, the Company entered into a series of transactions with its subsidiary, Igniton, Inc., a Colorado corporation (“Igniton”), and a third-party entity to purchase a perpetual license for a total of $16.2 million of consideration comprised of $10.2 million of cash and $5.0 million of common stock of Igniton and $1.0 million of the Company’s equity security investment in Telomeron (the “License Purchase”). The license allows the Company to utilize the technology developed by the third party. This license is recorded within the Technology license, net line item on the consolidated balance sheets. The License Purchase was primarily funded through an equity financing through Igniton, which raised $6.8 million of cash and $5.0 million in Igniton stock issuance from third-party investors.
During 2025, Igniton raised $7.4 million of private common equity financing, including $2.0 million from Gaia, at an implied pre-money valuation of approximately $100 million. This valuation is based on the terms of the private financing and does not represent a remeasurement of fair value under GAAP. On December 16, 2025, Igniton closed a sale of 194,782 shares of Igniton common stock (the “2025 Igniton Shares”) to certain funds managed by AWM Investment Company, Inc. (“AWM”) for total net proceeds of approximately $0.56 million. Igniton’s total proceeds included an approximately $0.07 million premium that was passed to the Company in exchange for the issuance to AWM of a non-transferable right granting AWM a one-time ability to sell the 2025 Igniton Shares to the Company for the total net proceeds paid (the “2025 Option”), payable at the Company’s option, in cash or shares of the Company’s Class A common stock having a value per share equal to the trailing 5-day average Volume-Weighted Average Price prior to the exercise of the 2025 Option. The amounts have been recorded within Additional paid-in capital and Noncontrolling interests within the Consolidated Statements of Changes in Equity.
In the normal course of our business, we investigate, evaluate and discuss acquisition, joint venture, minority investment, strategic relationship and other business combination opportunities in our market. For any future investment, acquisition or joint venture opportunities, we may consider using then-available liquidity, issuing equity securities or incurring indebtedness.
While there can be no assurances, we believe our cash on hand, cash expected to be generated from operations, and potential capital raising capabilities should be sufficient to fund our operations on both a short-term and long-term basis. However, our projected cash needs may change as a result of acquisitions, product development, unforeseen operational difficulties or other factors.
Class A Common Stock Offering
In February 2025, we entered into an underwriting agreement with Roth Capital Partners, LLC and Lake Street Capital Markets, LLC (the “Underwriters”) relating to the offer and sale of 1,600,000 shares of our Class A common stock ($0.0001 par value) (the “Shares”). We sold the Shares to the Underwriters at the public offering price of $5.00 per share, less underwriting discounts and commissions, resulting in net proceeds of $7.0 million. The offering was made pursuant to a registration statement on Form S-3. We provided a 45-day option to the Underwriters to purchase up to an additional 240,000 Shares at $5.00 per share, less underwriting discounts and commissions (the “Over-Allotment Option”). On March 7, 2025, the Underwriters elected to waive the right to exercise the Over-Allotment Option.
Cash Flows
The following table summarizes our primary sources (uses) of cash during the periods presented:
Years ended December 31,
(in thousands)
Net cash provided by (used in):
Operating activities
Investing activities
Financing activities
Net increase (decrease) in cash
2025 Compared to 2024
Operating activities . Cash flows from operations decreased $1.2 million during 2025 compared to 2024. This decrease was driven by the timing of working capital and changes in other liabilities.
Investing activities . Cash flow used in investing activities decreased $5.0 million during 2025 compared to 2024 due to impacts from investment purchases and acquisitions.
Financing activities . Cash flows provided by financing activities increased $5.9 million during 2025 compared to 2024 due to the proceeds from the issuance of Gaia Class A common stock of $7.0 million. We had no outstanding borrowings at December 31, 2025.
Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk
As a smaller reporting company, we are not required to provide the information required by this Item.
Item 8. Financial Stateme nts and Supplementary Data
Index to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID: 1596 )
Gaia, Inc. Consolidated Financial Statements:
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
REPOR T OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of Gaia, Inc.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Gaia, Inc. and subsidiaries (collectively the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, changes in equity, and cash flows, for the years then ended, and the related notes (collectively, referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows as of and for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.
Revenue Recognition of Partner and Other Revenue – Note 2
As described in Note 2 to the consolidated financial statements, the Company’s revenue consists primarily of member subscription fees paid by the customers directly to the Company. The Company also recognizes Partner Revenue for member subscription fees that are paid through a third-party partner. The Company recognizes Partner Revenue on a net basis for relationships where partners have the primary relationship, including billing and service delivery, with the customer. The Company recognizes Partner Revenue on a gross basis for customers whose primary relationship is with Gaia. Revenues earned from sources other than monthly subscription fees and Partner Revenues, Other Revenues, are also disclosed in Note 2 and are recognized in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”).
As part of our risk assessment procedures, we determined that Partner Revenue and Other Revenue had the most complexity related to its revenue recognition.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to revenue recognition of Partner and Other Revenue related to the determination of the accuracy of amounts recorded in the consolidated financial statements included the following, among others:
We evaluated the internal controls related to the Company’s review and application of ASC 606 and determined whether those controls were designed and implemented appropriately.
We subjected Partner Revenue and Other Revenue to detail testing to determine whether the Partner Revenue and Other Revenue streams were appropriately recorded in accordance with ASC 606.
Where applicable, we performed testing to determine the reasonableness over management’s estimates related to Partner Revenue.
/s/ Frank, Rimerman + Co. LLP
We have served as the Company’s auditor since 2023.
San Francisco, California
March 6, 2026
GAIA, INC.
Consolidated B alance Sheets
As of December 31,
(in thousands, except share and per share data)
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable
Other receivables
Prepaid expenses and other current assets
Total current assets
Media library, net
Operating right-of-use asset, net
Property and equipment, net
Technology license, net
Investments and other intangible assets, net
Goodwill
Total assets
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
Accrued and other liabilities
Long-term debt, current portion
Operating lease liability, current portion
Deferred revenue
Total current liabilities
Long-term debt, net of current portion
Operating lease liability, net of current portion
Deferred taxes, net
Total liabilities
Commitments and contingencies (Note 9)
Equity:
Gaia, Inc. shareholders’ equity:
Class A common stock, $ 0.0001 par value, 150,000,000 shares
authorized, 19,709,325 and 18,066,942 shares
issued, 19,562,520 and 18,001,955 shares outstanding at
December 31, 2025 and 2024, respectively
Class B common stock, $ 0.0001 par value, 50,000,000 shares
authorized, 5,400,000 shares issued and outstanding at
December 31, 2025 and 2024, respectively
Additional paid-in capital
Treasury stock at cost: 146,805 and 64,805 shares as of December 31, 2025 and 2024, respectively
Accumulated deficit
Total Gaia, Inc. shareholders' equity
Noncontrolling interests
Total equity
Total liabilities and equity
See accompanying Notes to Consolidated Financial Statements.
GAIA, INC.
Consolidated Statem ents of Operations
Years Ended December 31,
(in thousands, except per share data)
Revenues, net
Cost of revenues
Gross profit
Operating Expenses:
Selling and operating
Corporate, general and administration
Total operating expenses
Loss from operations
Interest and other income, net
Loss before income taxes
Income tax expense (benefit)
Loss from continuing operations
Loss from discontinued operations
Net loss
Net loss attributable to noncontrolling interests
Net loss attributable to common shareholders
Loss per share:
Basic
Continuing operations (attributable to common shareholders)
Discontinued operations
Basic loss per share
Diluted
Continuing operations (attributable to common shareholders)
Discontinued operations
Diluted loss per share
Weighted-average shares outstanding:
Basic
Diluted
See accompanying Notes to Consolidated Financial Statements.
GAIA, INC.
Consolidated Statement s of Changes in Equity
(in thousands, except shares)
Common
Stock
Shares
Accumulated
Deficit
Common
Stock
Amount
Treasury Stock Amount
Additional
Paid-in
Capital
Non-controlling interests
Total
Equity
Balance at December 31, 2023
Issuance of Gaia, Inc. common stock for employee stock purchase plan
Issuance of Gaia, Inc. common stock for RSU releases
Share-based compensation
Igniton activity
Net loss
Balance at December 31, 2024
Issuance of Gaia, Inc. common stock in public offering
Issuance of Gaia, Inc. common stock for employee stock purchase plan
Issuance of Gaia, Inc. common stock for RSU releases
Share-based compensation
Treasury shares received as consideration for the sale of discontinued operations
Igniton activity
Net loss
Balance at December 31, 2025
See accompanying Notes to Consolidated Financial Statements.
GAIA, INC.
Consolidated Statem ents of Cash Flows
Years ended December 31,
(in thousands)
Cash flows from operating activities:
Net loss
Adjustments to reconcile net loss to net cash provided by operating activities:
Media library amortization
Depreciation and amortization
Non-cash operating lease expense
Other non-cash items
Share-based compensation expense
Additions to media library
Income tax (benefit) expense
Changes in operating assets and liabilities:
Accounts receivable
Other receivables
Prepaid expenses and other current assets
Accounts payable
Accrued and other liabilities
Deferred revenue
Net cash provided by operating activities
Cash flows from investing activities:
Investment in Orion Architect LLC
Acquisition of UTV L.L.C.
Additions to property and equipment
Purchase of intangible assets
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from short-term borrowings
Repayment of short-term debt
Proceeds from the issuance of common stock
Proceeds from sale of subsidiary common stock, net of transaction costs
Proceeds from mortgage refinance
Extinguishment of debt
Net cash provided by (used in) financing activities
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Supplemental disclosure of cash flow information
Cash paid for interest
Cash paid for income taxes
Supplemental schedule of non-cash investing and financing activities
Additions to property and equipment in Accounts payable
Non-cash consideration paid for intangible assets
Remeasurement of operating lease right-of-use assets and lease obligations
See accompanying Notes to Consolidated Financial Statements.
Notes to Consolidated Financial Statements
References in this report to “we”, “us”, “our”, the “Company” or “Gaia” refer to Gaia, Inc. and its subsidiaries, unless we indicate otherwise.
1. Organization and Nature of Operations
Gaia, Inc. operates a global digital video subscription service and online community that strives to connect a unique and underserved member base. Our digital content is available to our members on most internet-connected devices anytime, anywhere commercial free. Through our online Gaia subscription service, our members have unlimited access to a vast library of inspiring films, cutting edge documentaries, interviews, yoga classes, transformation related content, and more – exclusively available to our members for digital streaming. A subscription also allows our members to download and view files from our library without being actively connected to the internet. We were incorporated under the laws of the State of Colorado on July 7, 1988. During the years ended December 31, 2025 and 2024, we also had certain operations that are presented as discontinued operations in the accompanying consolidated financial statements. See Note 16 for further discussion.
2. Summary of Significant Accounting Policies
Basis of Presentation
W e have prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP, and they include our accounts and those of our subsidiaries, over which we exercise control. All intercompany transactions and balances have been eliminated in consolidation.
Reclassifications
C ertain prior year amounts in the accompanying consolidated financial statements have been reclassified to conform to the current year presentation. These reclassifications had no effect on previously reported net income, total assets, total liabilities, stockholders’ equity, or cash flows.
Cash and Cash Equivalents
C ash represents on-demand accounts with financial institutions that are denominated in U.S. dollars. We consider financial instruments purchased with an original maturity of 90 days or less to be cash equivalents. We also classify transactions that we expect to settle within several days as cash equivalents.
Concentration of Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and accounts receivable. Risks associated with cash within the United States are mitigated by banking with federally insured, creditworthy institutions; however, there are balances with these institutions that are greater than the Federal Deposit Insurance Corporation insurance limit. The Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses as considered necessary by management.
During the years ended December 31, 2025 and 2024, one third-party platform partner (“Partner” ) accounted for 22 % and 19 % of the Company’s revenues, respectively. Additionally, two Partners accounted for 69 % and 18 % of accounts receivable as of December 31, 2025 , and 61 % and 21 % of accounts receivable as of December 31, 2024 .
Accounts Receivable
A ccounts receivable consists primarily of amounts due from Partners who have the billing relationship with the member and collect subscription fees on our behalf. We evaluate the need for an allowance for credit losses based on historical collection trends and changes in our customer payment patterns, current and expected conditions and market trends along with our operating forecasts, concentration, and creditworthiness and determined no allowance was needed at December 31, 2025 and 2024 .
Property and Equipment, Net
W e state property and equipment at cost less accumulated depreciation and amortization. We include in property and equipment the cost of internal-use software, including software and generative AI development used in connection with our websites. We expense all costs related to the development of internal-use software and generative AI development except those incurred during the application development stage. We capitalize the costs we incur during the application development stage and amortize them on the straight-line method over the estimated useful life of the software. We compute depreciation and amortization of property and equipment on the straight-line method over estimated useful lives. We depreciate building improvements over the shorter of the estimated useful lives of the assets or remaining life of the building. See Note 4 for a description of estimated useful lives. Depreciation and amortization expenses are included in selling and operating expense, and corporate, general and administration expense in the accompanying consolidated statements of operations.
Media Library, Net
Media library represents the lower of unamortized cost or net realizable value of capitalized costs in accordance with ASC Topic 926 including direct production costs, talent fees, production crew, direct overhead allocable to production, and post-production costs, to produce our proprietary media content, rights obtained through license arrangements and digital media content acquired through asset purchases or business combinations. Payments for content, including additions to media library and the changes in related liabilities, are classified within ‘Net cash provided by operating activities’ on the Consolidated Statement of Cash Flows.
We amortize our media library in cost of revenues on a straight-line basis over the shorter of the license period or the estimated useful life of the titles, which typically ranges from 12 to 90 months . The amortization period begins with the first month of availability on our service. Produced media in progress consists of produced media costs that have not yet been placed in service.
Our media library is reviewed at the film group level for impai rment when an event or change in circumstances indicates that the carrying amount may not be recoverable. Recoverability is measured by a comparison of the carrying amount of the film group to estimated discounted future cash flows expected to be generated by the film group. If the carrying amount exceeds the estimated future cash flows, an impairment charge is recognized by the amount by which the carrying value exceeds the fair value. No impairment charges related to the media library were recognized in 2025 and 2024 .
Goodwill
Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations and is not amortized. Goodwill is tested for impairment at the reporting unit level at least annually as of October 1, or more frequently if events or changes in circumstances indicate that goodwill may be impaired.
Annual Impairment Assessment
For the year ended December 31, 2025, the Company performed its annual goodwill impairment assessment utilizing the qualitative assessment option in accordance with ASC 350-20-35-3A through 35-3G. Under this guidance, the Company evaluated relevant events and circumstances to determine whether it was more likely than not (i.e., greater than 50 percent likelihood) that the fair value of its reporting unit was less than its carrying amount.
In performing the qualitative assessment, management considered, among other factors:
Macroeconomic conditions, including general economic trends, interest rates, inflation, and capital market conditions;
Industry and market considerations, including competitive environment, market demand, and regulatory developments;
Overall financial performance, including trends in revenue, operating margins, and cash flows compared to prior periods and forecasts;
Changes in management, strategy, or key personnel;
Reporting unit–specific events, including customer concentration, contract renewals, and operational performance;
Changes in the Company’s stock price and market capitalization relative to carrying value, where applicable; and
Other relevant entity-specific factors.
Based on the totality of the qualitative factors evaluated, management concluded that it was not more likely than not that the fair value of the reporting unit was less than its carrying amount as of the assessment date. Accordingly, the Company determined that it was not necessary to perform a quantitative goodwill impairment test. No goodwill impairment charges were recorded during the years ended December 31, 2025 or December 31, 2024 .
Long-Lived Assets
We evaluate the carrying value of long-lived assets held and used, other than goodwill, when events or changes in circumstances indicate the carrying value may not be recoverable. We consider the carrying value of a long-lived asset impaired when the total projected undiscounted cash flows from such asset are separately identifiable and are less than the carrying value. We recognize a loss based on the amount by which the carrying value exceeds the estimated fair value of the long-lived asset. We determine the estimated fair value primarily using the projected cash flows from the asset discounted at a rate commensurate with the risk involved. During 2025 and 2024 , no impairment of long-lived assets was recognized.
Income Taxes
We provide for income taxes pursuant to the asset and liability method. The asset and liability method requires recognition of deferred income taxes based on temporary differences between financial reporting and income tax bases of assets and liabilities, using current enacted income tax rates and regulations. These differences will result in taxable income or deductions in future years when the reported amount of the asset or liability is recovered or settled, respectively. Considerable judgment is required in determining when these events may occur and whether recovery of an asset, including the utilization of a net operating loss or other carryforward prior to its expiration, is more likely than not.
The Company does not recognize certain tax benefits from uncertain tax positions within the provision for income taxes. The Company may recognize a tax benefit only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. See Note 13 to the consolidated financial statements for further information regarding income taxes.
Non-Income Taxes
Th e Company accrues for non-income tax assessments from foreign jurisdictions related to prior periods and recognizes the expense within selling and operating, when deemed probable and estimable. Once the requirement to remit non-income taxes to foreign jurisdictions has been established, we present revenues net of the non-income taxes collected from members and remit such amounts to foreign tax authorities.
Share repurchases
The Company rep urchases shares of the Company's common shares from time to time. Purchases may be carried out through open market transactions, negotiated purchases or otherwise, at times in such amounts as the Company deems appropriate. Shares repurchased under such authorizations are held in treasury, including issuances under various employee stock-based award plans. Repurchased shares are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are subsequently reissued or otherwise disposed of, the amount received is recognized as an increase in treasury stock, and any difference between the amount received and the carrying amount of the treasury shares is recorded within additional paid‑in capital to the extent of prior related credits, with any excess reclassified to accumulated deficit.
Revenue Recog nition
Revenues consist primarily of subscription fees paid by our members. We present revenues net of the taxes that are collected from members and remitted to governmental authorities. Members are billed in advance and revenues are recognized ratably over the subscription term. Deferred revenues consist of subscription fees collected from members that have not been earned and
are recognized ratably over the remaining term of the subscription. We recognize revenue on a net basis for relationships where our Partners have the primary relationship, including billing and service delivery, with the member. We recognize revenue on a gross basis for members whose primary relationship is with Gaia. Payments made to Partners to assist in promoting our service on their platforms are expensed to marketing expenses in the period incurred. We do not allow access to our service to be provided as part of a bundle by any of our Partners.
As of December 31, 2025, total deferred revenue was $ 18.5 million and is expected to be recognized as revenue within the next 12 months.
Revenues earned from sources other than membership fees were $ 4.5 million for the year ended December 31, 2025 and $ 2.9 million for the year ended December 31, 2024 , which is also recognized in accordance with ASC Topic 606.
Business Combinations
Gaia recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill is measured as the excess of the consideration transferred over the fair value of assets acquired and liabilities assumed on the acquisition date. While we use our best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed, these estimates are inherently uncertain and subject to refinement. The authoritative guidance allows a measurement period of up to one year from the date of acquisition to make adjustments to the preliminary allocation of the purchase price. As a result, during the measurement period we may record adjustments to the fair values of assets acquired and liabilities assumed, with the corresponding offset to goodwill to the extent that it identifies adjustments to the preliminary purchase price allocation. Upon conclusion of the measurement period or final determination of the values of the assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments will be recorded to the consolidated statement of operations. For further information, see Note 5 Goodwill and Other Assets, Net.
Marketing
Marketing costs consist primarily of advertising expenses, which include promotional activities such as online advertising and public relations expenditures. Advertising costs are expensed as incurred and included in selling and operating expense in the accompanying consolidated statements of operations. During 2025 and 2024, we expensed marketing and advertising costs of $ 44.0 million and $ 37.9 million, respectively.
Share-Based Compensation
We recognize compensation cost for share-based awards based on the estimated fair value of the award on date of grant. We measure compensation cost at the grant date based on the estimated fair value of the award and recognize compensation cost upon the probable attainment of a specified performance condition over the estimated performance period or for time-based awards over the service period. Since 2019, for certain executive officers, the Company grants restricted stock units (“RSUs”) and beginning in 2025, we granted performance-based restricted stock units (“PSUs”), for which we utilize the market price of our common stock on the date of grant to estimate fair value. We account for forfeitures as they occur.
Segment Information
G aia’s Chief Executive Officer, Kiersten Medvedich, is the chief operating decision maker, who reviews Gaia’s financial information presented on a consolidated basis for purposes of allocating resources and evaluating our financial performance. Accordingly, we have determined that we operate in a single reporting segment.
De fined Contribution Plan
We have adopted a defined contribution retirement plan (“the Plan”) under Section 401(k) of the Internal Revenue Code of 1986, as amended (“Internal Revenue Code”), which covers substantially all employees. Eligible employees may contribute amounts to the Plan, via payroll withholding, subject to certain limitations. The Plan permits, but does not require, us to make additional matching contributions to the Plan on behalf of all participants in the Plan. The Plan allows us to determine the match contribution percentage, if any. We made matching contributions to the Plan of $ 0.2 million and $ 0.3 million for the years ended December 31, 2025 and 2024 , respectively.
Fair Value Measurements
F air value represents the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities are valued based upon observable and non-observable inputs. Valuations using Level 1 inputs are based on unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2 inputs utilize significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly; and valuations using Level 3 inputs are based on significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. The carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable and other current liabilities approximate their fair values.
Investments and Other Assets, Net
The Company classifies investments at the acquisition date and re-evaluates the classification at each balance sheet date and when events or changes in circumstances indicate that there is a change in the Company’s ability to exercise significant influence. The ability to exercise significant influence over, but not control, the operating and financial policies of the investee is presumed to exist when the Company owns 20% or greater of the voting interests in the investee, but the Company also applies judgment regarding its level of influence over the investee by considering key factors such as representation on the board of directors, participation in policy-making decisions, and material intercompany transactions. The Company accounts for its investments in other entities over which the Company has the ability to exercise significant influence, but not control, using the equity method of accounting.
Under the equity method of accounting, the Company’s investment is initially recorded at cost within Investments in Equity Method Investees on the consolidated balance sheets. The Company adjusts its investment for contributions made, its proportionate share of net earnings, declared dividends, and distributions of the investee. To the extent there is a basis difference between the amount invested and the Company’s proportionate share of the underlying net assets of the investee, the Company allocates such differences amongst the recorded assets of the investee. The basis differences are amortized on a straight-line basis over the underlying assets’ estimated useful lives when calculating the attributable earnings or losses. The Company records in the statements of operations its share of income or loss of the investee, including any amortization of basis differences, within interest and other expense, net, which results in an increase or decrease to the carrying value of the investment. Any dividends received from the investee are recorded as a reduction of the carrying value of the investment.
The Company holds an investment in Telomeron Inc. (“Telomeron”) which is recorded at its carrying value as an equity security investment under ASC Topic 321. The Company holds an investment in Orion Architect LLC (“Orion”), which is recorded at its carrying value as a cost method investment according to ASC Topic 321. These investments are classified as Investments and other assets, net on our consolidated balance sheets.
The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. If the investment is determined to have a decline in value deemed to be other than temporary, it is written down to estimated fair value. We did not record any impairment charges on our investments during the years 2025 or 2024 .
Leases
The Company accounts for leases under ASC Topic 842. Right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement of an arrangement where it is determined at inception that a lease exists. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our incremental borrowing rate. Lease terms include options to extend or terminate the lease when it is reasonably certain that those options will be exercised.
Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expense for these short-term leases and for leases is recognized on a straight-line basis over the lease term. Non-lease components are excluded from the ROU asset and lease liability present value computations. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
As discussed in Note 7, we entered into an operating lease in connection with the sale of a portion of our corporate campus, which was modified on December 8, 2025. We record the ROU asset for the operating lease term as an asset and our obligation to make lease payments as a liability. Variable lease payments are not included in the lease payments used to measure the lease liability and are expensed as incurred.
Noncontrolling Interest
G aia holds certain interests in entities where Gaia is the majority owner but not sole owner. These investments are included in our consolidated financial statements. The minority-owned portion of these investments is presented as Noncontrolling Interest (“NCI”) on the consolidated financial statements. Any changes of the ownership interest of NCI are accounted for as equity transactions and adjustments in the consolidated financial statements.
Loss Per Share
B asic loss per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted loss per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential shares of common stock outstanding during the period. Potential shares of common stock consist of incremental shares issuable upon the assumed exercise of stock options and vesting of restricted stock units utilizing the treasury stock method.
Use of Estimates
T he preparation of the consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and disclosures. Although we base these estimates on our best knowledge of current events and actions that we may undertake in the future, actual results may be different from the estimates.
Recently Issued Accounting Pronouncements Not Yet Adopt ed
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (ASC Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (ASC Topic 270): Narrow-Scope Improvements, which clarifies the guidance in ASC Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.
Recently adopted accounting pronouncements
In December 2023, the FASB issued AS U 2023-09, Income Taxes (ASC Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 for the year ended December 31, 2025 , and applied the new disclosure requirements prospectively to the current annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements. See Note 13 Income Taxes in the accompanying notes to the consolidated financial statements for further detail.
3. Media Library, Net
Media library stated at lower of unamortized cost or net realizable value, consists of the following as of December 31:
(in thousands)
Media library, net:
Acquired and licensed media, net
Produced media, net
In service media library, net
Produced media in progress
Total media library, net
As described in Note 2, amortization is typically over 12 to 90 months commencing with the month the content is available on our site and is included in cost of revenues on the accompanying consolidated statements of operations. Amortization expense for our media library was $ 10.4 million and $ 10.0 million during 2025 and 2024, respectively.
Future amortization is expected to be:
(in thousands)
Acquired and Licensed
Media
Produced
Media
Total
5 Years thereafter
4. Property and Equipment, Net
Property and equipment, net consist of the following as of December 31:
(in thousands)
Estimated Useful Lives (in Years)
Land and non-depreciable, long-lived assets
Buildings and improvements
3 - 45 years
Generative AI development costs
4 years
Website development and other software
3 years
Other equipment
3 - 10 years
Property and equipment, gross
Accumulated depreciation and amortization
Total property and equipment, net
Depreciation and amortization expense was $ 6.6 million and $ 7.4 million for the years ended December 31, 2025 and 2024, respectively.
During 202 5, the Company reclassified certain fixed assets to collectible items that do not depreciate such as Crystals and certain commissioned and other Artwork. Such items will be classified as Land and non-depreciable, long-lived assets according to ASC Subtopic 958-60. Collectible items, such as crystals and commissioned artwork, included within Land and non-depreciable long-lived assets, were not material as of December 31, 2025.
5. Goodwill and Investments and Other Assets, Net
Goodwill
We performed an annual qualitative test for goodwill impairment in the fourth quarter of the years ended December 31, 2025 and 2024 and determined that goodwill was not impaired. Goodwill was $ 34.0 million as of December 31, 2025 and $ 31.9 million as of December 31, 2024.
On September 30, 2025, Gaia completed an acquisition of UTV L.L.C. (“UTV”), in accordance with ASC Topic 805 Business Combinations for a purchase price of $ 2.5 million, of which $ 0.5 million was accrued for as a liability as of December 31, 2025,
and will be settled in cash in subsequent periods. This transaction resulted in $ 2.0 million of goodwill which is expected to be deductible for tax purposes and $ 0.5 million of assets including acquired media and customer relationships intangibles. The Company entered into this transaction to acquire content, expand market presence, increase member base, and market to a core growth audience focused on conscious lifestyle. There were no other adjustments to goodwill during the period.
The following table presents unaudited pro forma revenue and earnings for the year ended December 31, 2025 and 2024 and are based on the individual hi storical results of UTV and Gaia, with adjustments to give effect as if the acquisition had occurred on January 1, 2024 after giving effect to certain adjustments, including the amortization of intangible assets and assumes the purchase price was allocated to the assets purchased and liabilities assumed based on their fair market values at the date of purchase:
For the Year Ended December 31,
(in thousands)
Revenues, net
Net loss
The unaudited pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have occurred had the transactions been consummated as of January 1, 2024. Furthermore, such pro forma information is not necessarily indicative of future operating results of the combined companies and should not be construed as of representative of the operating results of the combined companies for any future dates or periods.
Investments and Other Intangible Assets, Net
Investments and other intangible assets, net represents Gaia’s investments in entities for which we do not exercise significant influence or have significant ownership sta ke. Inv estments and other intangible assets, net consist of the following as of December 31:
(in thousands)
Investments
Other intangible assets, net
Investments and other intangible assets, net
The following table represents our other intangible assets, net by major asset class as of the dates indicated, which are included in Investments and other intangible assets, net on the accompanying consolidated balance sheets as of December 31:
(in thousands)
Amortizable Intangible Assets
Customer relationships
Accumulated amortization
Customer relationships, net
Tradenames
Accumulated amortization
Tradenames, net
Unamortized Intangible Assets
Domain names
Other intangible assets, net
The customer related intangible assets are amortized on a straight-line basis over 24 and 48 months . Amortization expense was $ 611 thousand and $ 568 thousand for 2025 and 2024 , respectively. Amortization expenses are included in selling and operating expense, and corporate, general and administration expense in the accompanying consolidated statements of operations. Weighted-average remaining useful life for these intangible assets is 21 months . Future amortization of our amortizable
intangible assets as of December 31, 2025 is expected to be $ 220 thousand and $ 165 thousand for the year ended December 31, 2026 and December 31, 2027, respectively.
On September 30, 2025, Gaia entered into a cost method investment Orion Architect LLC (“Orion”) for $ 2 million in accordance with ASC Topic 321. Following the close of the investment, the Company holds less than 10 % ownership of the investee. The Company does not have significant influence over the investee as there is no representation on the investee’s board of directors, no participation in policy-making decisions, and no material intercompany transactions. The initial valuation of this investment was made at historical cost and will only be adjusted for impairment or observable price changes from comparable transactions. No unrealized gain/loss will be recognized unless an observable transaction occurs. The investment will be subject to impairment testing and any permanent declines in value is recognized in net income. During 2025 and 2024 , no impairment of goodwill was recognized.
6. Accrued and Other Liabilities
Accrued and other liabilities consist of the following as of December 31:
(in thousands)
Accrued compensation
Other accrued expenses
Accrued and other liabilities
7. Leases
In connection with the sale of a portion of our corporate campus as further discussed in Note 8 to the consolidated financial statements, we leased the property pursuant to a master lease which was amended effective December 8, 2025 (together, the “Lease Amendment”). The Lease Amendment, among other things, extended the term through September 30, 2035, with two five-year extensions . The extension options are not recognized as part of the right-of-use asset and lease liability. We record the right to use the underlying asset for the operating lease term as an asset and our obligation to make lease payments as a liability, based on the present value of the lease payments over the lease term. At December 31, 2025, the weighted average remaining lease term was 9.75 years and the weighted average discount rate was 5.090 % .
Because the rate implicit in the lease is not readily determinable, we use our incremental borrowing rate to determine the present value of lease payments. Information related to our right-of-use asset and related lease liability were as follows:
As of December 31,
(in thousands)
Operating right-of-use asset, net
Operating lease liability, current portion
Operating lease liability, net of current portion
For the Year Ended December 31,
(in thousands)
Cash paid for operating lease liabilities
Operating lease expense is recognized on a straight-line basis over the lease term. Our operating lease expense was $ 1.1 million for both 2025 and 2024. Future amortization of our lease liability as of December 31, 2025 is expected to be as follows:
(in thousands)
Thereafter
Future lease payments, gross
Less: Imputed interest
Operating lease liability
8 . D ebt
Long-term debt
On September 9, 2020, our wholly owned subsidiary Boulder Road LLC (“Boulder Road”) sold a 50 % undivided interest in a portion of our corporate campus to Westside Boulder, LLC (“Westside”). Boulder Road retained a 50 % undivided interest in the property as well as full ownership of our studio and production facilities. Boulder Road received consideration of $ 13.2 million in the transaction.
On December 28, 2020, the Borrower entered into a loan agreement with First Interstate Bank (formerly Great Western Bank), as lender, providing for a mortgage loan in the principal amount of $ 13.0 million (the “2020 Mortgage Loan”). The promissory note evidencing the 2020 Mortgage Loan mortgage bore interest at a fixed rate of 3.75 % per annum, and was scheduled to mature on December 28, 2025 , before being extinguished by the Borrower with the proceeds from the 2025 Mortgage Loan as discussed below.
On December 19, 2025, Boulder Road and Westside (collectively, the “Borrower”) entered into a business loan agreement wi th KeyBank National Association (“KeyBank”), as lender, providing for a mortgage loan in the principal amount of $ 11.4 million (the “2025 Mortgage Loan”). The promissory note evidencing the 2025 Mortgage Loan bears interest at a fixed rate of 5.090 % per annum, matures on December 19, 2030 , and is secured by a deed of trust on our corporate campus, a portion of which is owned by Boulder Road and Westside as tenants-in-common and the remainder of which is owned by Boulder Road. The loan proceeds from the 2025 Mortgage Loan were used to refinance the 2020 Mortgage Loan. Westside and Boulder Road each received 50 % of the proceeds and are each responsible for 50 % of the monthly installments. The 2025 Mortgage Loan contains customary affirmative and negative covenants (each with customary exceptions) for loans of this type, including limitations on the Borrower’s ability to incur liens or debt, make investments, or engage in certain fundamental changes, and is fully guaranteed by Gaia. Additionally, the 2025 Mortgage Loan requires Boulder Road, LLC ma i ntain a Net Operating Income to Debt Service Coverage Ratio of not less than 1.25 to 1.00 . As of December 31, 2025, financial covenant compliance is required beginning with the fiscal year ending December 31, 2025. As the loan closed on December 19, 2025, the Company was not required to test compliance with the financial covenants as of December 31, 2025 . The 2025 Mortgage Loan has a remaining balance of $ 11.4 million as of December 31, 2025.
Maturities on long-term debt, net are as follows:
(in thousands)
Credit and Security Agreement
On July 25, 2025 (the “Closing Date”), the Company, entered into a Second Amendment to the Credit and Security Agreement (the “Amendment”) among the Company, the subsidiary guarantors party thereto, and KeyBank National Association (the “Lender”), which amends that certain Credit and Security Agreement, dated as of August 25, 2022 (as amended prior to the Closing Date, the “Prior Credit Agreement”), among the Company, the subsidiary guarantors from time to time party thereto, and the Lender.
The Amendment amended the Prior Credit Agreement to, among other things, (i) refinance and extend the prior revolving credit facility with a revolving credit facility in an aggregate principal amount of up to $ 10 million (which may be increased up to $ 15 million) that matures on August 25, 2028 , the loan proceeds of which may be used for working capital, general corporate purposes, and permitted acquisitions, (ii) modify the interest rate applicable to revolving loan advances to 1.75 % per annum for advances that are SOFR loans and 0.75 % per annum for advances that are base rate loans and eliminate the 0.10 % per annum SOFR index adjustment, and (iii) provide for a maximum leverage ratio of 2.00 to 1.00 for each computation period. Borrowings under the Amendment are available for working capital and general corporate purposes and permitted acquisitions. As of December 31, 2025, the Company had $ 10.0 million of available borrowing capacity under the revolving credit facility and t here was no outstanding balance as of December 31, 2025.
Loans made, or letters of credit issued, under the Amendment mature on August 25, 2028 , and are secu red (subject to permitted liens and other exceptions) by a first priority lien on all business assets, including intellectual property, of Gaia and the subsidiary guarantors.
The interest rate applicable to revolving loan advances is 1.75 % per annum for advances that are Secured Overnight Financing Rate(“SOFR”) loans and 0.75 % per annum for advances that are base rate loans.
The Amendment contains customary affirmative and negative covenants (each with customary exceptions), including limitations on the Company’s ability to incur liens or debt, make investments, pay dividends, enter into transactions with its affiliates and engage in certain fundamental changes. Additionally, the Amendment requires Gaia to maintain a Fixed Charge Coverage Ratio of not less than 1.20 to 1.00 and to not permit the Leverage Ratio to exceed 2.00 to 1.00 for any computation period. As of December 31, 2025 and December 31, 2024, the Company was in compliance with all related covenant s.
On August 25, 2022, the Company entered into the Prior Credit Agreement, which provided for a revolving credit facility in an aggregate amount of $ 10 million and was amended by the Amendment on July 25, 2025. There were no outstanding borrowings under the Prior Credit Agreement as of December 31, 2024.
9. Commitments and Contingencies
From time to time, we are involved in legal proceedings that we consider to be in the normal course of business. We record accruals for losses related to those matters against us that we consider to be probable and that can be reasonably estimated. Based on available information, in the opinion of management, settlements, arbitration awards and final judgments, if any, that are considered probable of being rendered against us in litigation or arbitration in existence at December 31, 2025 and that can be reasonably estimated are either reserved against or would not have a material adverse effect on our consolidated financial condition, results of operations or cash flows.
The Company is subject to non‑income tax examinations in certain foreign jurisdictions where it provides services to consumers residing in those jurisdictions. A number of these examinations are ongoing and, in certain cases, have resulted in assessments from foreign tax authorities. The Company recognizes an accrual for non‑income tax liabilities in foreign jurisdictions when it is probable that a liability has been incurred and the exposure can be reasonably estimated. For other foreign jurisdictions where non‑income taxes may be due, the Company has determined that it is reasonably possible that additional non‑income tax exposures exist. However, because certain examinations are in the early stages and based on the Company’s prior experience with foreign tax authorities, the Company is currently unable to reasonably estimate the possible loss or range of loss that may result from these matters.
10. Loss Per Share
Basic loss per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted loss per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential shares of common stock outstanding during the period (“Common stock equivalents”). Common stock equivalents consist of incremental shares issuable upon the assumed exercise of stock options and vesting of restricted stock units, when dilutive, utilizing the treasury stock method. There were no common stock equivalents for 2025 and 2024 . The computation of loss per share is as follows:
For the Year Ended December 31,
(in thousands, except per share data)
Loss per share, basic and diluted:
Net loss attributable to common shareholders
Shares used in computation:
Weighted-average common stock outstanding
Weighted-average number of shares
Loss per share, basic and diluted
We excluded the effect of the below elements from our calculation of diluted loss per share, as their inclusion would have been anti-dilutive, as there were no earnings attributable to common shareholders. Because the Company incurred a net loss for each of the years presented, all potential common shares were anti-dilutive. Accordingly, diluted net loss per share is the same as basic net loss per share for all periods presented.
For the Year Ended December 31,
(in thousands)
Employee stock options, restricted stock units, and performance-based restricted stock units
11. Shareholders’ Equity
Our common stock has two classes, Class A and Class B. Each holder of our Class A common stock is entitled to one vote for each share held on all matters submitted to a vote of shareholders. Each holder of our Class B common stock is entitled to ten votes on all matters submitted to a vote of shareholders. There are no cumulative voting rights. All holders of our Class A common stock and our Class B common stock vote as a single class on all matters that are submitted to the shareholders for a vote, except as provided by law or as set forth in our charter. Shareholders may consent to an action in writing and without a meeting under certain circumstances. Jirka Rysavy, our chairman, holds 100 % of our 5,400,000 outstanding shares of Class B common stock and also owns 291,682 shares of Class A common stock. Consequently, our chairman holds approximately 74 % of our voting stock and is able to exert substantial influence over and to control matters requiring approval by shareholders, including the election of directors, increasing our authorized capital stock, or a merger or sale of substantially all of our assets. As a result of Mr. Rysavy’s control of us, no change of control can occur without Mr. Rysavy’s consent.
As of December 31, 2025 and 2024 , 50 million shares of preferred stock were authorized and no preferred shares were issued or outstanding. Pursuant to our articles of incorporation, the Board of Directors can, at any time, and without stockholder approval, issue one or more new series of preferred stock, with such designations, preferences, limitations and relative rights as shall be expressed in articles of amendment, however, the Board of Directors shall not issue or authorize any voting preferred stock without the consent or approval of a majority of the Class B common stock.
Our Class A common stock and our Class B common stock are entitled to receive dividends, if any, as may be declared by our board of directors out of legally available funds. No dividends were declared or paid on our common stock in 2025 or 2024 . In the event of a liquidation, dissolution or winding up of Gaia, our Class A common stock and our Class B common stock are entitled to share ratably, on the same basis, in our assets remaining after the payment of all of our debts and other liabilities. Holders of our Class A common stock and our Class B common stock have no preemptive, subscription or redemption rights, and there are no redemption or sinking fund provisions applicable to our Class A common stock or our Class B common stock.
Our Class B common stock may not be transferred unless converted into our Class A common stock. Shares of our Class B common stock are convertible one -for-one into shares of our Class A common stock, at the option of the holder of the Class B common stock.
During 2025 and 2024, we issued shares of our Class A common stock as shown in the table below under our 2019 Long-Term Incentive Plan (the “2019 Plan”) and the 2009 Long-Term Incentive Plan (the “2009 Plan”).
For the Years Ended December 31,
Shares issued to independent directors for vesting of restricted stock
units issued for services rendered, in lieu of cash compensation
Shares issued to employees upon exercise of stock options, vesting
of restricted stock units, and employee stock purchase program
Class A Common Stock Offering
In February 2025, we entered into an underwriting agreement with Roth Capital Partners, LLC and Lake Street Capital Markets, LLC (the “Underwriters”) relating to the offer and sale of 1,600,000 shares of our Class A common stock ($ 0.0001 par value) (the “Shares”) . The public offering price was $ 5.00 per share, resulting in gross proceeds of $ 8.0 million before underwriting discounts, commissions and offering expenses. After deducting underwriting discounts, commissions and other offering costs, we received net proceeds of approximately $ 7.0 million, which were recorded in additional paid‑in capital. The offering was made pursuant to a registration statement on Form S-3. We provided a 45-day option to the Underwriters to purchase up to an additional 240,000 Shares at $ 5.00 per share, less underwriting discounts and commissions (the “Over-Allotment Option”). On March 7, 2025, the Underwriters elected to waive the right to exercise the Over-Allotment Option.
As of December 31, 2025, we had the following Class A common shares reserved for future issuance:
Conversion of Class B common stock
Reserved under the ESPP (note 12)
Stock options outstanding under the 2009 Plan
Restricted stock units outstanding under the 2009 Plan
Restricted stock units outstanding under the 2019 Plan
Performance-based restricted stock units outstanding under the 2019 Plan
Total shares reserved for future issuance
12. Share-Based Compensation
The Company’s 2019 Employee Stock Purchase Plan (the “ESPP”) became effective on April 29, 2019 . The purpose of the ESPP is to provide eligible employees an opportunity to purchase shares of our Class A common stock over time through regular payroll deductions. The ESPP initially reserved and authorized the issuance of up to a total of 300,000 shares of our Class A common stock to participating employees, subject to certain adjustments. The number of shares of Class A common stock available for issuance under the ESPP will be increased on the first day of each year beginning with 2020 in an amount equal to the number of shares issued under the ESPP in the prior year. No participant may purchase more than 1,000 shares of our Class A common stock during any offering period under the ESPP. In addition, under applicable tax rules, an employee may purchase no more than $ 25,000 worth of shares of our Class A common stock, valued at the start of the offering period, under the ESPP for each calendar year.
On April 29, 2019, the 2019 Plan became effective. This replaced the 2009 Plan, which lost the authority to grant new options under the 2009 Plan on April 23, 2019 . The purpose of the 2019 Plan is to advance the interests of our company and its shareholders by providing incentives to certain employees and other key individuals who perform services for us, including those who contribute significantly to the strategic and long-term performance objectives and growth of our company. No more than 1.8 million shares of our Class A common stock, subject to certain adjustments, may be issued under the 2019 Plan, and the 2019 Plan terminates no later than April 25, 2029 .
On April 2, 2025, our board of directors and shareholders approved an amendment to the 2019 Incentive Plan to increase the maximum number of shares of our Class A Common Stock authorized for issuance under the 2019 Incentive Plan by 700,000 shares such that the total number of shares authorized for issuance will be 2,500,000 shares (the “Plan Amendment”), which
remains consistent with the company’s general objective not to exceed 10% of the total outstanding common shares (both Class A common stock and Class B common stock).
In 2015, we commenced issuing restricted stock units (“RSUs”). In 2025, we commenced issuing performance-based restricted stock units (“PSUs”). The PSUs and RSUs entitle the recipient to receive one share of Class A common stock for each PSU or RSU upon vesting. The PSUs have performance periods of four years and vest depending on the Company's achievement of predetermined market-based performance target(s). The RSUs are issued with cliff vesting in five years for employees and one year for directors, provided that the recipient is still an employee or director of Gaia on such date. The PSUs and RSUs will be automatically forfeited and of no further force and effect if the vesting conditions are not m et. We value our PSU's and RSUs using the market price of our common stock on the date of grant. We use the Black-Scholes option pricing model to determine the fair value of options granted during the year. No options were granted during 2025 or 2024. The exercise price of our legacy outstanding options is generally equal to the closing market price of our stock at the date of the grant. We recognize the compensation expense related to share-based payment awards on a straight-line basis over the requisite service periods of the awards, which generally range from three to five years for employees, and one year for board members.
The table below presents a summary of activity under the 2009 Plan and the 2019 Plan, as of December 31, 2025, and changes during the year then ended:
Stock Options
Restricted Stock Units
(in thousands, except share and per share amounts)
Number of
Shares
Available for
issuance Under
the Plan
Shares
Weighted-
Average
Exercise
Price Per Share
Weighted-
Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic
Value
Shares
Weighted-
Average Grant
Date Fair Value
Outstanding at January 1, 2025
Increase in reserve
Restricted stock unit grants
Performance-based restricted stock unit grants
Exercised options
Restricted stock unit vesting
Cancelled or forfeited restricted stock units and options
Outstanding at December 31, 2025
Exercisable options at December 31, 2025
The tables below present our outstanding RSUs and PSUs by vest date:
Vest Date
RSUs
January 1, 2026
March 15, 2026
March 31, 2026
May 9, 2026
October 30, 2026
March 15, 2027
March 31, 2027
October 30, 2027
March 15, 2028
April 1, 2028
October 30, 2028
March 15, 2029
August 19, 2029
October 30, 2029
Vest Date
PSUs
March 15, 2026
March 15, 2027
March 15, 2028
March 15, 2029
During 2025 and 2024, we recognized approximately $ 1.7 million and $ 1.3 million , respectively, of share-based compensation expense. Total share-based compensation expense is reported in selling and operating expenses and corporate, general and administration expenses on our consolidated statements of operations. The total income tax impact on provision was $ 1.2 million and $ 0.8 million , for 2025 and 2024 , respectively. There were no options exercised during 2025 or 2024. We issue new shares upon the exercise of options and vesting of PSUs and RSUs.
As of December 31, 2025, there was $ 5.1 million of unrecognized cost related to non-vested share-based compensation arrangements granted under the 2009 and 2019 Plans. We expect that cost to be recognized over a weighted-average period of 2.92 years.
13. Income Taxes
The source of income before income taxes are as follows:
(in thousands)
Domestic
Foreign
Our income tax expense (benefit) is comprised of the following:
For the Years Ended December 31,
(in thousands)
Current:
Federal
State
Foreign
Total current
Deferred:
Federal
State
Foreign
Total deferred
Income tax expense (benefit)
The following table reconciles our income tax expense (benefit) based on the US statutory tax rate to the income tax expense (benefit) for the year ended December 31, 2025 , after the adoption of ASU 2023-09 :
For the Years Ended December 31,
(in thousands)
Amount
Percent
US federal statutory income tax rate
Domestic federal
Effect of permanent other differences
Cross-border tax laws
Goodwill
Return to provision adjustments
Valuation allowance
Other
Domestic state and local income taxes, net of federal effect
Foreign tax effects
Income tax expense (benefit)
In 2025, state and local income taxes in Colorado comprised the majority of the domestic state and local income taxes, net of federal effect category.
The following table reconciles income taxes based on the U.S. Statutory tax rate to the Company's income tax expense (benefit) for the year ended December 31, 2024, prior to the adoption of ASU 2023-09.
For the Years Ended December 31,
(in thousands)
Amount
Percent
US federal statutory income tax rate
Domestic federal
Effect of permanent other differences
Cross-border tax laws
Goodwill
Return to provision adjustments
Valuation allowance
Other
Domestic state and local income taxes, net of federal effect
Foreign tax effects
Income tax expense (benefit)
Cash paid for income taxes, net of refunds, for the year ended December 31, 2025, was as follows:
As of December 31, 2025
US federal
US state & local
California
New York
Pennsylvania
Texas
Other
Foreign
Spain
Total
Deferred income taxes reflect net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the net deferred income tax assets (liabilities) are as follows:
As of December 31,
(in thousands)
Deferred tax assets:
Net operating loss carryforward
Long-term lease
Stock-based compensation
Equity method investment
Other
Tax credits
Legal accrual
Deferred tax assets before valuation allowance
Valuation allowance
Deferred tax assets, net of valuation allowance
Deferred tax liabilities:
Depreciation and amortization
Right of use lease asset
Deferred Revenue
Total deferred tax liabilities
Net deferred tax asset/(liability)
Periodically, we perform assessments of the realization of our net deferred tax assets considering all available evidence, both positive and negative. We determined that a valuation allowance against our deferred tax assets of $ 21.1 million and $ 18.7 million for 2025 and 2024, respectively, was necessary due to the cumulative loss incurred over a four-year period. We have federal and state net operating loss carryforwards of approximately $ 85.9 million and $ 30.9 million , respectively, of which $ 7.8 million in federal net operating losses expire after 2037 . Net operating losses generated in 2018 and beyond do not expire.
We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. We measure the tax benefits recognized in the consolidated financial statements from such a position based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. As such, we are required to make many subjective assumptions and judgments regarding our income tax exposures. Interpretations of and guidance surrounding income tax law and regulations change over
time and may result in changes to our subjective assumptions and judgments which can materially affect amounts recognized in our consolidated balance sheets and consolidated statements of operations.
The result of our assessment of our uncertain tax positions did not have a material impact on our consolidated financial statements. Our federal and state tax returns for all years after 2015 are subject to future examination by tax authorities for all our tax jurisdictions. We recognize interest and penalties related to income tax matters in interest and other income (expense) and corporate, general and administrative expenses, respectively.
We operate in a number of tax jurisdictions and are subject to examination of its income tax returns by tax authorities in those jurisdictions who may challenge any item on these returns. Because the tax matters challenged by tax authorities are typically complex, the ultimate outcome of these challenges is uncertain In accordance with ASC Topic 740, we recognize the benefits of uncertain tax positions in our consolidated financial statements only after determining that it is more likely than not that the uncertain tax positions will be sustained.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(in thousands)
Balance at January 1, 2025
Additions for tax positions related to the current year
Balance at December 31, 2025
In the normal course of business, we are subject to examination by taxing authorities in U.S. Federal and U.S. state jurisdictions. The period subject to examination for our federal return is tax year 2019 and later. We believe that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in our tax audits are resolved in a manner not consistent with management's expectations, we could be required to adjust the provision for income tax in the period such resolution occurs.
14. Segment Information and Geographic Information
The Company operates as one operating segment. The Company's chief operating decision maker ( “CODM” ) is its Chief Executive Officer , who reviews financial information presented on a consolidated basis. The CODM uses consolidated operating margin and net income to assess financial performance and allocate resources. These financial metrics are used by the CODM to make key operating decisions, such as the determination of the rate at which the Company seeks to grow global operating margin
and the allocation of budget between cost of revenues, sales and marketing, technology and development, and general and administrative expenses.
The following table presents selected financial information with respect to the Company’s single operating segment for the years ended December 31, 2025 and 2024:
Years Ended December 31,
(in thousands, except per share data)
Revenues, net
Cost of revenues
Gross profit
Operating Expenses:
Selling and operating
Corporate, general and administration
Total operating expenses
Loss from operations
Interest and other income, net
Loss before income taxes
Income tax expense (benefit)
Loss from continuing operations
Loss from discontinued operations
Net loss
Net loss attributable to noncontrolling interests
Net loss attributable to common shareholders
See the consolidated financial statements for other financial information regarding the Company’s operating segment.
Geographic Information
We have members in the United States and over 185 foreign countries. The major geographic territories are the U.S., Canada and Australia based on the billing location of the member.
The following represents geographical data for our operations:
For the Years Ended December 31,
(in thousands)
Revenue:
United States
International
15. Igniton Transactions
In April 2024, the Company entered into a series of transactions with its subsidiary, Igniton, Inc., a Colorado corporation (“Igniton”), and a third-party entity to purchase a royalty free perpetual license for a total of $ 16.2 million of consideration comprised of $ 10.2 million of cash, $ 5.0 million of common stock of Igniton and $ 1.0 million of the Company ’s equity security investment in Telomeron (the “License Purchase”). The license allows the Company to utilize the technology developed by the third party. This license is recorded within the Technology license, net line item on the consolidated balance sheets.
Technology license, net consists of the f ollowing as of December 31, 2025:
(in thousands)
December 31, 2025
Technology license
Accumulated amortization
Technology license, net
The License Purchase was funded through an equity financing through Igniton completed in April 2024, which raised approximately $ 10.8 million of cash proceeds, including $ 4.0 million from Gaia, through the sale of shares of Igniton common stock, which included a transaction with certain funds managed by AWM Investment Company, Inc. (“AWM”). In addition, as part of the consideration for the License Purchase, Igniton issued $ 5.0 million of its common stock to the third-party entity from which the license was purchased.
As part of the April 2024 equity financing, Igniton closed a sale of 2,750,000 shares of Igniton common stock (the “2024 Igniton Shares”) to certain funds managed by AWM Investment Company, Inc. (“AWM”) for total net proceeds of approximately $ 3.2 million. Igniton’s total proceeds included an approximately $ 0.4 million premium that was passed to the Company in exchange for the issuance to AWM of a non-transferable right granting AWM a one-time ability to sell the 2024 Igniton Shares to the Company for the total net proceeds paid (the 2024 “Option”), payable at the Company’s option, in cash or shares of the Company’s Class A common stock having a value per share equal to the trailing 5-day average Volume-Weighted Average Price prior to the exercise of the 2024 Option. The amounts have been recorded within Additional paid-in capital and Noncontrolling interests within the Consolidated Statements of Changes in Equity.
During 2025, Igniton raised $ 7.4 million of private common equity financing .
As part of the 2025 equity financing, Igniton closed a sale of 194,782 shares of Igniton common stock (the “2025 Igniton Shares”) to certain funds managed by AWM Investment Company, Inc. (“AWM”) for total net proceeds of approximately $ 0.56 million. Igniton’s total proceeds included an approximately $ 0.07 million premium that was passed to the Company in exchange for the issuance to AWM of a non-transferable right granting AWM a one-time ability to sell the 2025 Igniton Shares to the Company for the total net proceeds paid (the “2025 Option”), payable at the Company’s option, in cash or shares of the Company’s Class A common stock having a value per share equal to the trailing 5-day average Volume-Weighted Average Price prior to the exercise of the 2025 Option. The amounts have been recorded within Additional paid-in capital and Noncontrolling interests within the Consolidated Statements of Changes in Equity.
Following the 2025 raise, Gaia continues to hold approximately two-thirds ownership interest and continues to consolidate its ownership interests in Igniton. The proceeds from the financing and follow-on investments are expected to be used by Igniton for product launches, general operating expenses and certain capital expenditures to support future growth.
The amounts from these transactions have been recorded within Additional paid-in capital and Noncontrolling interests within the Consolidated Statements of Changes in Equity.
16. Sale of Subsidiary to Related Party
On March 7, 2025, the Company’s Board voted to discontinue Food Matters Institute LTD, (“FMI”). We have presented the results of operations related to winding down this line of business as discontinued operations on the accompanying Consolidated Statements of Operations.
On November 4, 2025, Gaia completed a sale of all assets of its discontinued operatio ns, FMI, under an asset purchase agreement to James Colquhoun, a holder of approximately 5 % of the Gaia Inc.'s outstanding Class A Common Stock and employee of the company through January 2026. Mr. Colquhoun was a former Director from May 2020 through June 2023 and officer from June 2023 through June 2025. Gaia sold certain assets and liabilities, which consist of an acquired media library asset and a net payable of $ 97 thousand to Mr. Colquhoun in exchange for 82,000 shares of the Company's Class A common stock, net of adjustment at $ 356 thousand based on the closing stock price of $ 4.61 on November 4, 2025. The net book value of the FMI acquired media library on November 4, 2025 was $ 453 thousand. The transaction included a gain on disposal of the asset that was immaterial to the financial statements. Because Mr. Colquhoun is a shareholder owning more than 5 % of Gaia Inc.'s outstanding equity securities, the transaction is considered a related party transaction under ASC 850, Related Party Disclosures .
The terms of the transaction were approved in accordance with the Company's authority matrix. The Company does not expect to have any continuing involvement or arrangements with the related party buyer. On the transaction date of November 4, 2025 , there was no receivable from Mr. Colquhoun. No amounts are due to Mr. Colquhoun related to this transaction including commitments, guarantees or contingent considerations .
17. Subsequent Events
Management evaluat ed events occurring subsequent to December 31, 2025 through March 6, 2026 and determined that no material recognizable subsequent events occurred.
