Leaf 10-Q 7 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Oct. 31, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	LEAF GROUP LTD.
Entity Central Index Key	1,365,038
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding		20,840,754

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 33,039	$ 50,864
Accounts receivable, net	7,089	6,849
Prepaid expenses and other current assets	2,420	8,139
Total current assets	42,548	65,852
Property and equipment, net	11,833	11,503
Intangible assets, net	11,559	11,273
Goodwill	17,146	11,167
Other assets	1,308	1,457
Total assets	84,394	101,252
Current liabilities
Accounts payable	2,710	2,451
Accrued expenses and other current liabilities	14,764	15,017
Deferred revenue	1,971	2,180
Total current liabilities	19,445	19,648
Deferred tax liability	176	108
Other liabilities	3,322	1,746
Total Liabilities	22,943	21,502
Commitments and contingencies (Note 7)
Stockholders' equity
Common stock, $0.0001 par value. Authorized 100,000 shares; 22,473 issued and 20,818 shares outstanding at September 30, 2017 and 21,407 issued and 19,763 shares outstanding at December 31, 2016	2	2
Additional paid-in capital	520,620	513,139
Treasury stock at cost, 1,655 at September 30, 2017 and 1,644 at December 31, 2016	(35,706)	(35,641)
Accumulated other comprehensive loss	(27)	(112)
Accumulated deficit	(423,438)	(397,638)
Total stockholders' equity	61,451	79,750
Total liabilities and stockholders' equity	$ 84,394	$ 101,252

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2017	Dec. 31, 2016
Condensed Consolidated Balance Sheets
Common Stock, Par or Stated Value (USD per share)	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	100,000	100,000
Common Stock, Shares, Issued	22,473	21,407
Common Stock, Shares, Outstanding	20,818	19,763
Treasury Stock, Shares	1,655	1,644

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenue:
Product revenue	$ 20,908	$ 15,371	$ 50,841	$ 39,840
Service revenue	12,552	12,688	38,422	39,623
Total revenue	33,460	28,059	89,263	79,463
Operating expenses:
Product costs (exclusive of amortization of intangible assets shown separately below)	15,385	9,791	37,456	26,588
Service costs (exclusive of amortization of intangible assets shown separately below)	4,993	5,370	15,881	19,887
Sales and marketing	6,973	6,031	20,893	19,610
Product development	4,558	4,652	14,337	15,614
General and administrative	7,056	7,498	21,933	23,450
Amortization of intangible assets	1,313	3,100	4,547	9,246
Total operating expenses	40,278	36,442	115,047	114,395
Loss from operations	(6,818)	(8,383)	(25,784)	(34,932)
Interest income	66	35	148	60
Interest expense	(2)	(2)	(5)	(2)
Other (expense) income, net	(6)	(31)	(9)	39,131
(Loss) income before income taxes	(6,760)	(8,381)	(25,650)	4,257
Income tax (expense) benefit	(57)	32	(150)	(48)
Net (loss) income	$ (6,817)	$ (8,349)	$ (25,800)	$ 4,209
Net (loss) income per share
Basic (in dollars per share)	$ (0.33)	$ (0.41)	$ (1.27)	$ 0.21
Diluted (in dollars per share)	$ (0.33)	$ (0.41)	$ (1.27)	$ 0.21
Weighted average number of shares
Basic (in shares)	20,745	20,236	20,363	20,279
Diluted (in shares)	20,745	20,236	20,363	20,511

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Condensed Consolidated Statements of Comprehensive Loss
Net (loss) income	$ (6,817)	$ (8,349)	$ (25,800)	$ 4,209
Other comprehensive income (loss), net of tax:
Change in foreign currency translation adjustment	26	3	85	1
Comprehensive (loss) income	$ (6,791)	$ (8,346)	$ (25,715)	$ 4,210

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity - 9 months ended Sep. 30, 2017 - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional paid-in capital	Treasury Stock	Accumulated other comprehensive income (loss)	Accumulated deficit	Total
Beginning balance at Dec. 31, 2016	$ 2	$ 513,139	$ (35,641)	$ (112)	$ (397,638)	$ 79,750
Beginning Balance (in shares) at Dec. 31, 2016	19,763					19,763
Issuance of stock under employee stock awards and other		1,941				$ 1,941
Issuance of stock under employee stock awards and other (in shares)	850
Repurchases of common stock to be held in treasury			(65)			(65)
Repurchases of common stock to be held in treasury (in shares)	(10)
Issuance of common stock for acquisitions		1,603				1,603
Issuance of common stock for acquisitions (in shares)	215
Tax withholdings related to vesting of share-based payments		(2,761)				(2,761)
Stock-based compensation		6,698				6,698
Foreign currency translation adjustment				85		85
Net (loss) income					(25,800)	(25,800)
Ending balance at Sep. 30, 2017	$ 2	$ 520,620	$ (35,706)	$ (27)	$ (423,438)	$ 61,451
Ending Balance (in shares) at Sep. 30, 2017	20,818					20,818

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities
Net (loss) income	$ (25,800)	$ 4,209
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	8,815	15,035
Deferred income taxes	68	(33)
Stock-based compensation	6,426	6,118
Gain on disposal of business and online properties		(39,149)
Other	(44)	10
Change in operating assets and liabilities, net of effect of acquisitions and disposals:
Accounts receivable, net	319	3,231
Prepaid expenses and other current assets	1,021	(180)
Other long-term assets	25	48
Accounts payable	(548)	(372)
Accrued expenses and other liabilities	(1,557)	(2,730)
Deferred revenue	(236)	335
Net cash used in operating activities	(11,511)	(13,478)
Cash flows from investing activities
Purchases of property and equipment	(3,718)	(3,743)
Purchases of intangible assets	(235)	(120)
Cash received from disposal of businesses and online properties, net of cash disposed	4,285	36,100
Cash paid for acquisitions, net of cash acquired	(6,304)	(1,413)
Restricted deposits	742	136
Other	6	78
Net cash (used in) provided by investing activities	(5,224)	31,038
Cash flows from financing activities
Proceeds from exercises of stock options and purchases under ESPP	1,941	226
Repurchases of common stock	(65)	(3,515)
Taxes paid on net share settlements of restricted stock units	(2,761)	(1,132)
Cash paid for acquisition holdback	(119)
Other	(49)	(15)
Net cash used in financing activities	(1,053)	(4,436)
Effect of foreign currency on cash and cash equivalents	(37)	(2)
Change in cash and cash equivalents	(17,825)	13,122
Cash and cash equivalents, beginning of period	50,864	38,570
Cash and cash equivalents, end of period	33,039	$ 51,692
Supplemental disclosure of cash flows
Stock issued for acquisitions	$ 1,603

Company Background and Overview

Company Background and Overview	9 Months Ended
	Sep. 30, 2017
Company Background and Overview
Company Background and Overview	1. Company Background and Overview Leaf Group Ltd. (“Leaf Group” and, together with its consolidated subsidiaries, the “Company,” “our,” “we,” or “us”) is a Delaware corporation headquartered in Santa Monica, California. We are a diversified Internet company that builds platforms across our marketplaces and media properties to enable communities of creators to reach passionate audiences in large and growing lifestyle categories. Our business is comprised of two segments: Marketplaces and Media. Marketplaces Through our Marketplaces segment, we operate leading art and design marketplaces where large communities of artists can market and sell their original artwork or their original designs printed on a wide variety of products. Society6.com (“Society6”) provides artists with an online commerce platform to feature and sell their original designs on an array of consumer products in the home décor, accessories, and apparel categories. In May 2017, we acquired Deny Designs, a print-on-demand home décor brand with in-house manufacturing capacity, and both wholesale and direct-to-consumer channels , complementing our Society6 business. SaatchiArt.com (“Saatchi Art”) is an online art gallery featuring a wide selection of original paintings, drawings, sculptures and photography that provides a global community of artists with a curated environment in which to exhibit and sell their work directly to consumers around the world. The Other Art Fair is a leading London-based art fair for discovering emerging artists that complements our Saatchi Art marketplace . Media Our Media segment includes our leading owned and operated media properties that publish content, including videos, articles, and designed visual formats on various category-specific properties with distinct editorial voices. Our media properties include Livestrong.com, a health and healthy living destination; eHow, a do-it-yourself reference destination; and over 40 other media properties focused on specific editorial categories or interests that we either own and operate or host and operate for our partners. Beginning in the third quarter of 2016, we launched several category-specific properties, leveraging topics and certain content from eHow and our content library. We have focused on creating new high-quality content and building strong followings for these media brands by working with a curated network of contributors and influencers. Our Media segment also includes our content publishing studio, through which we create content for third-party publishers and brands.

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2017
Basis of Presentation
Basis of Presentation	2. Basis of Presentation The accompanying interim condensed consolidated balance sheet as of September 30, 2017, the condensed consolidated statements of operations and condensed consolidated statements of comprehensive (loss) income for the three and nine months ended September 30, 2017 and 2016, the condensed consolidated statements of cash flows for the nine months ended September 30, 2017 and 2016 and the condensed consolidated statement of stockholders’ equity for the nine months ended September 30, 2017 are unaudited. In the opinion of management, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair statement of our statement of financial position as of September 30, 2017, our results of operations for the three and nine months ended September 30, 2017 and 2016, and our cash flows for the nine months ended September 30, 2017 and 2016. The results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results expected for the full year. The consolidated balance sheet as of December 31, 2016 has been derived from our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016. The interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States, for interim financial information and with the instructions from the U.S. Securities and Exchange Commission (“SEC”) for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC. Principles of Consolidation The consolidated financial statements include the accounts of Leaf Group and its wholly owned subsidiaries. Acquisitions are included in our consolidated financial statements from the date of the acquisition. Our purchase accounting resulted in all assets and liabilities of acquired businesses being recorded at their estimated fair values on the acquisition dates. All significant intercompany transactions and balances have been eliminated in consolidation . Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include revenue, allowance for doubtful accounts, the assigned value of acquired assets and assumed liabilities in business combinations, useful lives and impairment of property and equipment, intangible assets, goodwill and other assets, the fair value of equity-based compensation awards, and deferred income tax assets and liabilities. Actual results could differ materially from those estimates. On an ongoing basis, we evaluate our estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of our assets and liabilities. Revenue Recognition Product Revenue During the first quarter of 2017, we revised the shipping terms for Society6 to reflect the transfer of title and risk of loss upon shipment and began recognizing revenue upon the shipment of fulfilled orders. We recognize product revenue from sales of Society6 products when the title and risk of loss transfers to the customer, net of sales allowances and estimated returns based on historical experience. The impact as a result of this change was not material for the three months ended September 30, 2017. The impact as a result of this change was an increase in product revenue of approximately $0.9 million for the nine months ended September 30, 2017. Such amounts would have been otherwise recorded as deferred revenue at the end of the period. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) , which will supersede nearly all existing revenue recognition guidance under GAAP. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Further, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized. The guidance is effective for the Company commencing in the first quarter of fiscal year 2018. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is continuing to evaluate the impact of adopting the new revenue standard and, at this time, does not believe such adoption will have a material effect on the consolidated financial statements. To date, the Company has performed an initial assessment for each of the Company’s material revenue streams. In addition, the Company has determined it is expected to utilize various practical expedients allowed under the guidance, such as the application of the guidance only to contracts that are not completed as of the date of the initial application and certain other practical expedients applicable to contracts with a duration of one year or less. The Company anticipates it will complete its process of adopting this new accounting standard in the fourth quarter of 2017. Although the impact is not expected to be material, the Company expects to record any adoption adjustments associated with this standard in the first quarter of fiscal year 2018 using the modified retrospective method with the cumulative effect recognized as of the date of adoption. Upon adoption of the guidance, the Company also expects to expand disclosures regarding its contracts and revenue types. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update will require lease assets and lease liabilities to be recognized on the balance sheet and disclosure of key information about leasing arrangements. This guidance is effective for the Company commencing in the first quarter of fiscal year 2019 and must be adopted using a modified retrospective transition, and provides for certain practical expedients. Early adoption is permitted. The Company is currently evaluating the impact of this standard on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting . This standard makes several modifications to Topic 718 related to the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted the guidance in the first quarter of fiscal year 2017. The Company elected to continue the estimation of forfeitures for its equity instruments. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. Due to the Company’s net operating loss carryforwards and full valuation allowance, the adoption of the guidance did not have an impact to the Company’s retained earnings upon adoption. The presentation requirements for cash flows related to employee taxes paid for withheld shares had no impact to any of the periods presented in our consolidated cash flows statements as these cash flows have historically been presented as a financing activity. The guidance did not have a material impact to the Company’s consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . ASU 2016-15 provides guidance on how certain cash receipts and cash payments are to be presented and classified in the statement of cash flows. ASU 2016-15 is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. ASU 2016-15 is effective for the Company beginning in fiscal 2018. The Company is evaluating the impact of the adoption of this guidance on the consolidated financial statements and does not expect the impact to be material. In November 2016, the FASB issued ASU 2016-18, Restricted Cash , which requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. ASU 2016-18 will be applied using a retrospective transition method to each period presented and early adoption is permitted. ASU 2016-18 is effective for the Company beginning in fiscal 2018. The Company is evaluating the impact of the adoption of this guidance on the consolidated financial statements. As of September 30, 2017, the Company has a restricted cash balance of $1.0 million collateralizing a standby letter of credit associated with the lease of the headquarters office. The Company's practice has historically been to present changes to the account as restricted deposits in the statement of cash flows. Upon adoption of this guidance, the Company expects that the presentation of the beginning and ending amounts of cash on the statement of cash flows will change to include the balance of restricted cash. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350) . This standard simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendment should be applied on a prospective basis. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of this standard on the consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting . ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if the award’s fair value, vesting conditions and classification as an equity or liability instrument are the same immediately before and after the change. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. ASU 2017-09 is effective for the Company beginning in fiscal 2018. The Company is evaluating the impact of the adoption of this guidance on the consolidated financial statements but does not expect it to have a material impact.

Property and Equipment

Property and Equipment	9 Months Ended
	Sep. 30, 2017
Property and Equipment
Property and Equipment	3. Property and Equipment Property and equipment consisted of the following (in thousands): September 30, December 31, 2017 2016 Computers and other related equipment $ 9,509 $ 8,656 Purchased and internally developed software 28,279 27,601 Furniture and fixtures 1,500 1,472 Leasehold improvements 6,784 6,694 Machinery and related equipment 297 — 46,369 44,423 Less accumulated depreciation (34,536) (32,920) Property and equipment, net $ 11,833 $ 11,503 Depreciation and software amortization expense, which includes losses on disposal of property and equipment of less than $0.1 million for each of the three months ended September 30, 2017 and 2016, respectively, and less than $0.1 million and $1.2 million for the nine months ended September 30, 2017 and 2016, respectively, is shown by classification below (in thousands): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Product costs $ 16 $ — $ 31 $ — Service costs 725 603 2,174 2,931 Sales and marketing 9 12 27 38 Product development 22 32 68 105 General and administrative 664 700 1,968 2,715 Total depreciation $ 1,436 $ 1,347 $ 4,268 $ 5,789

Goodwill and Intangible Assets

Goodwill and Intangible Assets	9 Months Ended
	Sep. 30, 2017
Goodwill and Intangible Assets
Goodwill and Intangible Assets	4. Goodwill and Intangible Assets The following table presents the changes in our goodwill balance (in thousands): Balance at December 31, 2016 $ 11,167 Acquisitions 5,906 Foreign currency impact 73 Balance at September 30, 2017 $ 17,146 We recorded $5.9 million of goodwill in connection with the acquisition of Deny Designs in May 2017. Refer to Note 11 for additional information. As of September 30, 2017, we have two reporting units, marketplaces and media, and our goodwill balance related entirely to our marketplaces reporting unit. Intangible assets consisted of the following (in thousands): September 30, 2017 Gross carrying Accumulated Net carrying amount amortization amount Customer relationships $ 2,853 $ (1,558) $ 1,295 Artist relationships 12,233 (10,570) 1,663 Media content 91,396 (89,704) 1,692 Technology 6,204 (4,458) 1,746 Non-compete agreements 25 (18) 7 Trade names 9,885 (4,729) 5,156 $ 122,596 $ (111,037) $ 11,559 December 31, 2016 Gross carrying Accumulated Net carrying amount amortization amount Customer relationships $ 1,453 $ (1,252) $ 201 Artist relationships 11,916 (10,337) 1,579 Media content 91,616 (87,604) 4,012 Technology 5,654 (3,649) 2,005 Non-compete agreements 25 (11) 14 Trade names 7,539 (4,077) 3,462 $ 118,203 $ (106,930) $ 11,273 Identifiable finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives commencing on the date that the asset is available for its intended use. Total amortization expense for the periods shown below includes (in thousands): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Service costs $ 626 $ 2,424 $ 2,685 $ 5,910 Sales and marketing 194 281 533 2,178 Product development 294 247 809 740 General and administrative 199 148 520 418 Total amortization $ 1,313 $ 3,100 $ 4,547 $ 9,246 Service costs include accelerated amortization charges of less than $0.1 million and $1.2 million for the three months ended September 30, 2017 and 2016, respectively, and $0.7 million and $1.7 million for the nine months ended September 30, 2017 and 2016, respectively, as a result of removing certain assets from service.

Other Assets

Other Assets	9 Months Ended
	Sep. 30, 2017
Other Assets
Other Assets	5. Other Assets As of September 30, 2017 and 2016, we had cash collateralizing a standby letter of credit associated with the lease of our headquarters office of approximately $0.8 million and $1.0 million, respectively, included in long-term assets.

Accrued Expenses and Other Liab

Accrued Expenses and Other Liabilities	9 Months Ended
	Sep. 30, 2017
Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities	6. Accrued Expenses and Other Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): September 30, December 31, 2017 2016 Accrued payroll and related items $ 3,701 $ 4,239 Artist payables 4,114 3,982 Accrued product costs 1,158 1,566 Accrued marketing 1,375 1,456 Contingent liabilities 1,071 — Other 3,345 3,774 Accrued expenses and other current liabilities $ 14,764 $ 15,017 Other long-term liabilities consisted of the following (in thousands): September 30, December 31, 2017 2016 Accrued rent $ 1,415 $ 1,503 Contingent liabilities 1,821 — Other 86 243 Other liabilities $ 3,322 $ 1,746 As part of the acquisition of Deny Designs, as described in Note 11, contingent consideration of up to $3.6 million is payable annually in three equal installments on the first through third anniversary of the closing date. The contingent consideration is valued at $2.8 million as of the acquisition date based on time value, discount rate, and the estimated probability of achieving the contingent criteria related to the ongoing development of new products for sale, as specified in the purchase agreement. Such amounts will be adjusted at each subsequent period based on probability of achievement until settlement of such liability. Adjustments to the liability will be recorded to income or expense in our condensed statement of operations. The fair value adjustment to the liability for the three and nine months ended September 30, 2017 was not material. The estimated amount payable upon the first year anniversary is included in accrued expenses and other current liabilities, and estimated amounts payable upon the second and third anniversaries are included in other liabilities in our condensed consolidated balance sheets. During the nine months ended September 30, 2016, we recognized severance costs of $1.7 million in connection with targeted headcount reductions, primarily as a result of actions taken in June 2016 to streamline our content publishing studio and better integrate this business into our broader Media segment. These severance costs related to our Media segment and were recognized in the condensed consolidated statements of operations as follows: $0.7 million in sales and marketing costs, $0.6 million in product development costs, $0.3 million in service costs, and $0.1 million in general and administrative costs. Severance amounts related to these actions were fully paid as of September 30, 2016 .

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2017
Commitments and Contingencies
Commitments and Contingencies	7. Commitments and Contingencies Leases We conduct our operations utilizing leased office facilities in various locations under operating leases, and as of September 30, 2017, these leases have non-cancelable periods ending between February 2018 and October 2021. Litigation From time to time, we are a party to various legal matters incidental to the conduct of our business. Certain of our outstanding legal matters include speculative claims for indeterminate amounts of damages. We record a liability when we believe that it is probable that a loss has been incurred and the amount can be reasonably estimated. Based on our current knowledge, we do not believe that there is a reasonable possibility that the final outcome of the pending or threatened legal proceedings to which we are a party, either individually or in the aggregate, will have a material adverse effect on our future financial results. However, the outcome of such legal matters is subject to significant uncertainties. Taxes From time to time, various federal, state and other jurisdictional tax authorities undertake reviews of the Company and its filings. In evaluating the exposure associated with various tax filing positions, we accrue charges for possible exposures. We believe any adjustments that may ultimately be required as a result of any of these reviews will not be material to our consolidated financial statements. Indemnification In the normal course of business, we have provided certain indemnities, commitments and guarantees under which we may be required to make payments in relation to certain transactions or contractual commitments. These indemnities include intellectual property indemnities to our customers and partners, indemnities to our directors and officers to the maximum extent permitted under the laws of the State of Delaware, indemnifications related to our lease agreements and indemnifications to sellers or buyers in connection with acquisitions and dispositions, respectively. In addition, our advertiser, content creation and distribution partner agreements contain certain indemnification provisions which are generally consistent with those prevalent in our industry. We have not incurred significant obligations under indemnification provisions historically, and do not expect to incur significant obligations in the future. Accordingly, we have not recorded any liability for these indemnities.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2017
Income Taxes
Income Taxes	8. Income Taxes Income tax (expense) benefit for each of the three month periods ended September 30, 2017 and 2016 was less than $0.1 million. Income tax expense for the nine month periods ended September 30, 2017 and 2016 was $0.2 million and less than $0.1 million , respectively. Our effective tax rate differs from the statutory rate primarily as a result of state taxes, foreign taxes, nondeductible stock option expenses and changes in our valuation allowance. If all or a portion of our net operating loss carryforwards are subject to limitation because it is determined that we had previously experienced an “ownership change” as defined in section 382 of the Internal Revenue Code of 1986, as amended, our future cash flows could be adversely impacted due to increased tax liability. We reduce our deferred tax assets resulting from future tax benefits by a valuation allowance if, based on the weight of the available evidence, it is more likely than not that some portion or all of these deferred taxes will not be realized. The timing of the reversal of deferred tax liabilities associated with tax deductible goodwill is not certain and thus not available to assure the realization of deferred tax assets. Due to the limitation associated with deferred tax liabilities from tax deductible goodwill, we have deferred tax assets in excess of deferred tax liabilities before application of a valuation allowance for the periods presented. As we have insufficient history of generating income, the ultimate future realization of these excess deferred tax assets is not more likely than not and is thus subject to a valuation allowance. Accordingly, we have established a full valuation allowance against our deferred tax assets. The Company adopted the new accounting guidance that simplifies several aspects of the accounting for share-based payments as of January 1, 2017. The new standard requires income tax benefits and deficiencies to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. Upon adoption, the Company recorded approximately $7.3 million of net deferred tax assets related to net operating losses, along with a corresponding valuation allowance as of January 1, 2017, such that there is no net impact to our deferred tax assets or income tax expense. The adoption of the new standard did not have an impact on the consolidated financial statements. We are subject to the accounting guidance for uncertain income tax positions. We believe it is more likely than not that our income tax positions and deductions will be sustained on audit and do not anticipate any adjustments which could result in a material adverse effect on our financial condition, results of operations, or cash flow. Our policy for recording interest and penalties associated with audits and uncertain tax positions is to record such items as a component of income tax expense, and amounts recognized to date are not material. There are no material uncertain tax positions and no uncertain income tax positions were recorded during the nine months ended September 30, 2017 or 2016 , and we do not expect our uncertain tax position to change materially during the next twelve months. We file tax returns in the United States, at both the federal and state level, and in several foreign jurisdictions. Due to net operating loss carryforwards, our tax returns are open to examination by the Internal Revenue Service and state jurisdictions for all years since inception.

Stock-based Compensation Plans

Stock-based Compensation Plans and Awards	9 Months Ended
	Sep. 30, 2017
Stock-based Compensation Plans and Awards
Stock-Based Compensation Plans and Awards	9. Stock-based Compensation Plans and Awards Stock-based Compensation Expense Stock-based compensation expense related to all employee and non-employee stock-based awards recognized in the condensed consolidated statements of operations was as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Service costs $ 155 $ 142 $ 453 $ 1,054 Sales and marketing 209 145 586 586 Product development 475 290 1,352 1,206 General and administrative 1,343 1,103 4,035 3,272 Total stock-based compensation $ 2,182 $ 1,680 $ 6,426 $ 6,118 Award Activity Stock Options Stock option activity is as follows (in thousands): Number of options outstanding Outstanding at December 31, 2016 2,856 Options granted 37 Options exercised (315) Options forfeited or cancelled (300) Outstanding at September 30, 2017 2,278 Restricted Stock Units Restricted stock unit activity is as follows (in thousands): Number of shares Unvested at December 31, 2016 1,941 Granted 1,492 Vested (882) Forfeited (478) Unvested at September 30, 2017 2,073

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Sep. 30, 2017
Stockholders' Equity
Stockholders' Equity	10. Stockholders’ Equity Stock Repurchases Under our stock repurchase plan, as amended in February 2012, we are authorized to repurchase up to $50.0 million of our common stock from time to time. During the year ended December 31, 2016, we re-initiated purchases of our common stock under the stock repurchase plan and repurchased approximately 844,000 shares at an average price of $5.74 per share for an aggregate amount of approximately $4.9 million. Repurchases of a pproximately 10,000 shares were initiated in the fourth quarter of 2016 but settled in the first quarter of 2017 for an aggregate amount of less than $0.1 million. We have not initiated any repurchases of our common stock during the nine months ended September 30, 2017 and are not currently making repurchases. As of September 30, 2017, approximately $14.3 million remained available under the repurchase plan, and we may continue to make stock repurchases from time to time in the future. The timing and actual number of shares repurchased will depend on various factors including price, corporate and regulatory requirements, alternative investment opportunities and other market conditions. Shares repurchased by us are accounted for when the transaction is settled. As of September 30, 2017, there were no unsettled share repurchases. The par value of shares repurchased and retired is deducted from common stock and any excess over par value is deducted from additional paid-in capital. Direct costs incurred to repurchase the shares are included in the total cost of the shares.

Acquisitions and Dispositions

Acquisitions and Dispositions	9 Months Ended
	Sep. 30, 2017
Acquisitions and Dispositions
Acquisitions and Dispositions	11. Acquisitions and Dispositions Acquisitions Nine months ended September 30, 2017 On May 1, 2017, we completed the acquisition of certain assets and the assumption of certain liabilities of Deny Designs, a print-on-demand home décor brand with in-house manufacturing capacity, and both wholesale and direct-to-consumer channels, for total consideration of $12.0 million. The purchase price consists of cash of approximately $6.7 million paid at closing, approximately 215,000 shares of Leaf Group common stock valued at approximately $1.7 million issued in a private placement, and contingent consideration of $3.6 million, payable annually in three equal installments on the first through third anniversary of the closing date, subject to reduction in certain circumstances. A portion of the contingent consideration will secure post-closing indemnification obligations of the seller and/or post-closing working capital adjustments to the purchase price. The business will operate as a part of our Marketplaces segment, complementing our Society6 business. The total fair value of the purchase price for the acquisition including cash paid at closing, fair value of common stock issued and contingent consideration approximated $11.2 million and was allocated to Deny Designs’ tangible and intangible assets acquired and liabilities assumed, based on their estimated fair values as of May 1, 2017, the closing date of the acquisition. The excess of the purchase price over the net assets and liabilities acquired was recorded as goodwill. The acquisition is included in our condensed consolidated financial statements as of the closing date of the acquisition, which was May 1, 2017. During the three months ended September 30, 2017, the valuation of the fair value of tangible and intangible assets acquired and liabilities assumed was finalized. The resulting adjustments recorded to the provisional fair value amounts was not material for the three months ended September 30, 2017 and has been reflected in the condensed consolidated financial statements. The following table summarizes the allocation of the purchase price for Deny Designs (in thousands): Goodwill $ 5,906 Trademark 2,300 Customer relationships 1,400 Artist relationships 300 Technology 550 Other assets and liabilities assumed 705 Total $ 11,161 The trademark, customer relationships, artist relationships, and technology we acquired have estimated useful lives of ten years, five years, t hree years, and t hree years, respectively. The estimated weighted average useful life of the intangible assets we acquired in total is seven years. Goodwill is primarily derived from our ability to generate synergies with Deny Designs’ products and services with our other marketplaces. The goodwill will be included as part of our marketplaces reporting unit and is expected to be deductible for tax purposes. Contingent consideration is valued at $2.8 million as of the acquisition date based on time value, discount rate, and the estimated probability of achieving the contingent criteria related to the ongoing development of new products for sale, as specified in the purchase agreement. The minimum and maximum amount payable for each of the three years is $0.3 million and $1.2 million, respectively. Such amounts will be adjusted at each subsequent period based on probability of achievement until settlement of such liability. Adjustments to the liability will be recorded to income or expense in our condensed statement of operations. The contingent consideration liability is included in accrued expenses and other long-term liabilities in our condensed consolidated balance sheets. Supplemental Pro forma Information (unaudited) Supplemental information on an unaudited pro forma basis, as if the acquisition had been consummated as of January 1, 2016, is as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Revenue $ 33,460 $ 30,527 $ 91,845 $ 85,637 Net (loss) income (6,817) (8,112) (25,854) 4,567 The unaudited pro forma supplemental information is based on estimates and assumptions which we believe are reasonable and reflect amortization of intangible assets as a result of the acquisitions. The pro forma results are not necessarily indicative of the results that have been realized had the acquisitions been consolidated as of the beginning of the periods presented. Nine months ended September 30, 2016 On July 7, 2016, we completed the acquisition of the entire issued share capital of Other Art Fairs Ltd, which operates as The Other Art Fair, for consideration of £1.1 million (approximately $1.5 million) in cash, excluding deferred consideration of up to £315,000 in cash, payable over a three year period. The Other Art Fair is a leading London-based art fair for discovering emerging artists that currently presents fairs in the United Kingdom, Australia and the United States. The purchase price of the acquisition was allocated to The Other Art Fair’s tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of July 7, 2016, the closing date of the acquisition. The excess of the purchase price over the net assets and liabilities acquired was recorded as goodwill. The acquisition is included in our consolidated financial statements as of the closing date of the acquisition, which was July 7, 2016. Operating income and pro forma financial information for The Other Art Fair for the years ended December 31, 2016 and 2015 were not material to our financial results. The following table summarizes the allocation of the purchase price for The Other Art Fair (in thousands): Goodwill $ 851 Trademark 556 Artist relationships 207 Other assets and liabilities assumed (143) Total $ 1,471 The trademark we acquired has an estimated useful life of five years and the artist relationships we acquired have an estimated useful life of three years. The estimated weighted average useful life of the intangible assets we acquired in total is four years. Goodwill is primarily derived from our ability to generate synergies with its services. The goodwill is included as part of our marketplaces reporting unit and is not deductible for tax purposes. Dispositions Nine months ended September 30, 2016 On April 12, 2016, we completed the sale of substantially all of the assets relating to our Cracked business, including the Cracked.com humor website, to Scripps Media, Inc. for a cash purchase price of $39.0 million. A portion of the purchase price equal to $3.9 million was placed into escrow at closing to secure certain of our post-closing indemnification obligations. In July 2017, the full escrow amount of $3.9 million was released and paid to us following the expiration of the indemnification period. Revenue for the Cracked business for the nine months ended September 30, 2016 (through the sale date of April 12, 2016) was $1.8 million. The Cracked business had a pre-tax loss of $1.9 million for the nine months ended September 30, 2016 (through the sale date of April 12, 2016), excluding allocations for corporate costs and including stock-based compensation expense incurred in connection with the sale. Prior to its disposition, the operating results related to Cracked were included as part of our Media segment. The sale did not meet the definition of discontinued operations under ASC 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. As a result of the sale of the Cracked business, we recognized a gain of $38.1 million, recorded in other income, net, which included $0.6 million in net assets sold and $0.3 million in transaction costs incurred in connection with the sale. We utilized our net operating losses to offset any taxable gain resulting from the sale of the Cracked business. In addition, during the nine months ended September 30, 2016, we sold one of our non-core online properties for total consideration of $1.0 million, resulting in a gain of $1.0 million, recorded in other income, net.

Business Segments

Business Segments	9 Months Ended
	Sep. 30, 2017
Business Segments
Business Segments	12. Business Segments Prior to the second quarter of 2017, we operated in one operating segment. In the second quarter of 2017, as a result of the continued growth of and expanding portfolio within our Marketplaces service offering, including the acquisition of Deny Designs in May 2017, we revised the information used by our chief operating decision maker (the “CODM”) to evaluate financial performance and resource allocation, and determined that we operate in two segments: Marketplaces and Media. Our Marketplaces segment consists of several leading art and design marketplaces where large communities of artists can market and sell their original artwork or their original designs printed on a wide variety of products. Our Media segment consists of our leading owned and operated media properties that publish content, including videos, articles and designed visual formats, on various category-specific properties with distinct editorial voices, as well as other media properties focused on specific categories or interests that we either own and operate or host and operate for our partners. Our CODM uses revenue and non-GAAP operating contribution to evaluate the profitability of our operating segments; all other financial information is reviewed by the CODM on a consolidated basis. Segment operating contribution reflects earnings before corporate and unallocated expenses and also excludes: (a) depreciation expense; (b) amortization of intangible assets; (c) share-based compensation expense; (d) interest and other income (expenses); and (e) income taxes. Our CODM does not evaluate our operating segments using asset information. We do not aggregate our operating segments. The majority of our principal operations and assets are located in the United States. The financial performance of our operating segments and reconciliation to consolidated operating loss is as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Segment Revenue: Marketplaces $ 22,493 $ 16,650 $ 56,061 $ 43,521 Media 10,967 11,409 33,202 35,942 Total revenue $ 33,460 $ 28,059 $ 89,263 $ 79,463 Segment Operating Expenses: Marketplaces (1) $ 22,869 $ 15,857 $ 59,584 $ 42,791 Media (1) 6,188 7,356 20,410 29,085 Add: Corporate expenses (2) 6,290 7,102 19,812 21,366 Consolidated operating expenses $ 35,347 $ 30,315 $ 99,806 $ 93,242 Segment Operating Contribution: Marketplaces (3) $ (376) $ 793 $ (3,523) $ 730 Media (3) 4,779 4,053 12,792 6,857 Add (deduct): Corporate expenses (2) (6,290) (7,102) (19,812) (21,366) Acquisition, disposition and realignment costs (4) — 99 299 1,396 Adjusted EBITDA (5) $ (1,887) $ (2,157) $ (10,244) $ (12,383) Reconciliation to consolidated pre-tax income (loss): Adjusted EBITDA (5) $ (1,887) $ (2,157) $ (10,244) $ (12,383) Add (deduct): Interest income (expense), net 64 33 143 58 Other (expense) income, net (6) (6) (31) (9) 39,131 Depreciation and amortization (7) (2,749) (4,447) (8,815) (15,035) Stock-based compensation (8) (2,182) (1,680) (6,426) (6,118) Acquisition, disposition and realignment costs (4) — (99) (299) (1,396) (Loss) income before income taxes $ (6,760) $ (8,381) $ (25,650) $ 4,257 (1) Segment operating expenses reflects operating expenses that are directly attributable to the operating segment, not including corporate and unallocated expenses, and also excluding the following: (a) depreciation expense; (b) amortization of intangible assets; (c) share-based compensation expense; (d) interest and other income (expenses); and (e) income taxes. (2) Corporate expenses include operating expenses that are not directly attributable to the operating segments, including: corporate information technology, marketing, and general and administrative support functions and also excludes the following: (a) depreciation expense; (b) amortization of intangible assets; (c) share-based compensation expense; (d) interest and other income (expenses); and (e) income taxes. (3) Segment operating contribution reflects segment revenue less segment operating expenses. Operating contribution has certain limitations in that it does not take into account the impact to the statement of operations of certain expenses and is not directly comparable to similar measures used by other companies. (4) Represents such items, when applicable, as (a) legal, accounting and other professional service fees directly attributable to acquisition, disposition or corporate realignment activities and (b) employee severance and other payments attributable to acquisition, disposition or corporate realignment activities. (5) Adjusted EBITDA reflects net income (loss) excluding interest (income) expense, income tax expense (benefit), and certain other non-cash or non-recurring items impacting net income (loss) from time to time, principally comprised of depreciation and amortization, stock-based compensation and acquisition, disposition and realignment costs. (6) Primarily consists of income from the disposition of certain businesses and online properties. (7) Represents depreciation expense of our long-lived tangible assets and amortization expense of our finite-lived intangible assets, including amortization expense related to our investment in media content assets, included in our GAAP results of operations. (8) Represents the expense related to stock-based awards granted to employees as included in our GAAP results of operations. Revenue by geographic region, as determined based on the location of our customers or anticipated destination of use, is as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Domestic $ 28,058 $ 22,708 $ 73,064 $ 64,214 International 5,402 5,351 16,199 15,249 Total revenue $ 33,460 $ 28,059 $ 89,263 $ 79,463

Fair Value

Fair Value	9 Months Ended
	Sep. 30, 2017
Fair Value
Fair Value	13. Fair Value We report certain financial assets and liabilities at their carrying amounts. The carrying amounts of our financial instruments, which include cash and cash equivalents, accounts receivable, restricted cash, accounts payable, and accrued liabilities approximate fair value because of their short maturities. Certain assets, including goodwill, intangible assets and other long-lived assets are also subject to measurement at fair value on a nonrecurring basis, if they are deemed to be impaired as the result of an impairment review. Contingent consideration is required to be recognized at fair value as of the acquisition date. We estimate the fair value of these liabilities based on estimated probabilities of achievement of the contingent considerations as per the terms of the purchase agreement, discounted to estimate fair value. We believe our estimates and assumptions are reasonable, however, there is significant judgment involved. We evaluate, on a routine, periodic basis, the estimated fair value of the contingent consideration and changes in estimated fair value, subsequent to the initial fair value estimate at the time of the acquisition, will be reflected in income or expense in the consolidated statements of operations. Changes in the fair value of contingent consideration obligations may result from changes in discount periods and rates and changes in probability assumptions with respect to the likelihood of achieving the contingent criteria. Any changes in the estimated fair value of contingent consideration may have a material impact on our operating results. As of September 30, 2017, we did not have any Level 1 financial assets measured at fair value. As described in Note 11 , we recorded a contingent consideration liability as a result of the acquisition of Deny Designs for $2.8 million. The minimum and maximum amount payable for each of the three years is $0.3 million and $1.2 million, respectively, based upon satisfaction of the contingent criteria related to the ongoing development of new products for sale, as specified in the purchase agreement. Such amounts will be adjusted at each subsequent period based on probability of achievement until settlement of such liability. Adjustments to the liability will be recorded to income or expense in our condensed statement of operations. The fair value adjustment to the liability for the three and nine months ended September 30, 2017 was not material. We classify our contingent consideration resulting from acquisitions within Level 3, as the valuation inputs are based on unobservable inputs. As of September 30, 2016, Level 1 financial assets measured at fair value was $5.0 million, consisting of money market funds, which are included in cash and cash equivalents in our consolidated balance sheet.

Net Income (Loss) Per Share

Net Income (Loss) Per Share	9 Months Ended
	Sep. 30, 2017
Net Income (Loss) Per Share
Net Income (Loss) Per Share	14. Net Income (Loss) Per Share The following table sets forth the computation of basic and diluted net income (loss) per share of common stock (in thousands, except per share data): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Net (loss) income $ (6,817) $ (8,349) $ (25,800) $ 4,209 Weighted average common shares outstanding—basic 20,745 20,236 20,363 20,279 Dilutive effect of common stock equivalents — — — 232 Weighted average common shares outstanding—diluted 20,745 20,236 20,363 20,511 Net (loss) income per share Basic $ (0.33) $ (0.41) $ (1.27) $ 0.21 Diluted $ (0.33) $ (0.41) $ (1.27) $ 0.21 For the three months ended September 30, 2017 and 2016, we excluded 2.2 million and 3.6 million shares, respectively, and for the nine months ended September 30, 2017 and 2016, we excluded 2.5 million and 3.4 million shares, respectively, from the calculation of diluted weighted average common shares outstanding, as their inclusion would have been antidilutive.

Basis of Presentation (Policies

Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2017
Basis of Presentation
Basis of Presentation	The accompanying interim condensed consolidated balance sheet as of September 30, 2017, the condensed consolidated statements of operations and condensed consolidated statements of comprehensive (loss) income for the three and nine months ended September 30, 2017 and 2016, the condensed consolidated statements of cash flows for the nine months ended September 30, 2017 and 2016 and the condensed consolidated statement of stockholders’ equity for the nine months ended September 30, 2017 are unaudited. In the opinion of management, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair statement of our statement of financial position as of September 30, 2017, our results of operations for the three and nine months ended September 30, 2017 and 2016, and our cash flows for the nine months ended September 30, 2017 and 2016. The results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results expected for the full year. The consolidated balance sheet as of December 31, 2016 has been derived from our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016. The interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States, for interim financial information and with the instructions from the U.S. Securities and Exchange Commission (“SEC”) for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC.
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of Leaf Group and its wholly owned subsidiaries. Acquisitions are included in our consolidated financial statements from the date of the acquisition. Our purchase accounting resulted in all assets and liabilities of acquired businesses being recorded at their estimated fair values on the acquisition dates. All significant intercompany transactions and balances have been eliminated in consolidation .
Use of Estimates	Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include revenue, allowance for doubtful accounts, the assigned value of acquired assets and assumed liabilities in business combinations, useful lives and impairment of property and equipment, intangible assets, goodwill and other assets, the fair value of equity-based compensation awards, and deferred income tax assets and liabilities. Actual results could differ materially from those estimates. On an ongoing basis, we evaluate our estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of our assets and liabilities.
Revenue Recognition	Revenue Recognition Product Revenue During the first quarter of 2017, we revised the shipping terms for Society6 to reflect the transfer of title and risk of loss upon shipment and began recognizing revenue upon the shipment of fulfilled orders. We recognize product revenue from sales of Society6 products when the title and risk of loss transfers to the customer, net of sales allowances and estimated returns based on historical experience. The impact as a result of this change was not material for the three months ended September 30, 2017. The impact as a result of this change was an increase in product revenue of approximately $0.9 million for the nine months ended September 30, 2017. Such amounts would have been otherwise recorded as deferred revenue at the end of the period.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) , which will supersede nearly all existing revenue recognition guidance under GAAP. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Further, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized. The guidance is effective for the Company commencing in the first quarter of fiscal year 2018. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is continuing to evaluate the impact of adopting the new revenue standard and, at this time, does not believe such adoption will have a material effect on the consolidated financial statements. To date, the Company has performed an initial assessment for each of the Company’s material revenue streams. In addition, the Company has determined it is expected to utilize various practical expedients allowed under the guidance, such as the application of the guidance only to contracts that are not completed as of the date of the initial application and certain other practical expedients applicable to contracts with a duration of one year or less. The Company anticipates it will complete its process of adopting this new accounting standard in the fourth quarter of 2017. Although the impact is not expected to be material, the Company expects to record any adoption adjustments associated with this standard in the first quarter of fiscal year 2018 using the modified retrospective method with the cumulative effect recognized as of the date of adoption. Upon adoption of the guidance, the Company also expects to expand disclosures regarding its contracts and revenue types. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update will require lease assets and lease liabilities to be recognized on the balance sheet and disclosure of key information about leasing arrangements. This guidance is effective for the Company commencing in the first quarter of fiscal year 2019 and must be adopted using a modified retrospective transition, and provides for certain practical expedients. Early adoption is permitted. The Company is currently evaluating the impact of this standard on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting . This standard makes several modifications to Topic 718 related to the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted the guidance in the first quarter of fiscal year 2017. The Company elected to continue the estimation of forfeitures for its equity instruments. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. Due to the Company’s net operating loss carryforwards and full valuation allowance, the adoption of the guidance did not have an impact to the Company’s retained earnings upon adoption. The presentation requirements for cash flows related to employee taxes paid for withheld shares had no impact to any of the periods presented in our consolidated cash flows statements as these cash flows have historically been presented as a financing activity. The guidance did not have a material impact to the Company’s consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . ASU 2016-15 provides guidance on how certain cash receipts and cash payments are to be presented and classified in the statement of cash flows. ASU 2016-15 is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. ASU 2016-15 is effective for the Company beginning in fiscal 2018. The Company is evaluating the impact of the adoption of this guidance on the consolidated financial statements and does not expect the impact to be material. In November 2016, the FASB issued ASU 2016-18, Restricted Cash , which requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. ASU 2016-18 will be applied using a retrospective transition method to each period presented and early adoption is permitted. ASU 2016-18 is effective for the Company beginning in fiscal 2018. The Company is evaluating the impact of the adoption of this guidance on the consolidated financial statements. As of September 30, 2017, the Company has a restricted cash balance of $1.0 million collateralizing a standby letter of credit associated with the lease of the headquarters office. The Company's practice has historically been to present changes to the account as restricted deposits in the statement of cash flows. Upon adoption of this guidance, the Company expects that the presentation of the beginning and ending amounts of cash on the statement of cash flows will change to include the balance of restricted cash. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350) . This standard simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendment should be applied on a prospective basis. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of this standard on the consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting . ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if the award’s fair value, vesting conditions and classification as an equity or liability instrument are the same immediately before and after the change. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. ASU 2017-09 is effective for the Company beginning in fiscal 2018. The Company is evaluating the impact of the adoption of this guidance on the consolidated financial statements but does not expect it to have a material impact.

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Sep. 30, 2017
Property and Equipment
Schedule of Property and Equipment	Property and equipment consisted of the following (in thousands): September 30, December 31, 2017 2016 Computers and other related equipment $ 9,509 $ 8,656 Purchased and internally developed software 28,279 27,601 Furniture and fixtures 1,500 1,472 Leasehold improvements 6,784 6,694 Machinery and related equipment 297 — 46,369 44,423 Less accumulated depreciation (34,536) (32,920) Property and equipment, net $ 11,833 $ 11,503
Schedule of Depreciation Expense	Depreciation and software amortization expense, which includes losses on disposal of property and equipment of less than $0.1 million for each of the three months ended September 30, 2017 and 2016, respectively, and less than $0.1 million and $1.2 million for the nine months ended September 30, 2017 and 2016, respectively, is shown by classification below (in thousands): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Product costs $ 16 $ — $ 31 $ — Service costs 725 603 2,174 2,931 Sales and marketing 9 12 27 38 Product development 22 32 68 105 General and administrative 664 700 1,968 2,715 Total depreciation $ 1,436 $ 1,347 $ 4,268 $ 5,789

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2017
Goodwill and Intangible Assets
Changes in Goodwill Balance	The following table presents the changes in our goodwill balance (in thousands): Balance at December 31, 2016 $ 11,167 Acquisitions 5,906 Foreign currency impact 73 Balance at September 30, 2017 $ 17,146
Schedule of Intangible Assets	Intangible assets consisted of the following (in thousands): September 30, 2017 Gross carrying Accumulated Net carrying amount amortization amount Customer relationships $ 2,853 $ (1,558) $ 1,295 Artist relationships 12,233 (10,570) 1,663 Media content 91,396 (89,704) 1,692 Technology 6,204 (4,458) 1,746 Non-compete agreements 25 (18) 7 Trade names 9,885 (4,729) 5,156 $ 122,596 $ (111,037) $ 11,559 December 31, 2016 Gross carrying Accumulated Net carrying amount amortization amount Customer relationships $ 1,453 $ (1,252) $ 201 Artist relationships 11,916 (10,337) 1,579 Media content 91,616 (87,604) 4,012 Technology 5,654 (3,649) 2,005 Non-compete agreements 25 (11) 14 Trade names 7,539 (4,077) 3,462 $ 118,203 $ (106,930) $ 11,273
Amortization Expense by Classification	Total amortization expense for the periods shown below includes (in thousands): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Service costs $ 626 $ 2,424 $ 2,685 $ 5,910 Sales and marketing 194 281 533 2,178 Product development 294 247 809 740 General and administrative 199 148 520 418 Total amortization $ 1,313 $ 3,100 $ 4,547 $ 9,246

Accrued Expenses and Other Li25

Accrued Expenses and Other Liabilities (Tables)	9 Months Ended
	Sep. 30, 2017
Accrued Expenses and Other Current Liabilities
Schedule of Accrued Expenses and Other Liabilities	Accrued expenses and other current liabilities consisted of the following (in thousands): September 30, December 31, 2017 2016 Accrued payroll and related items $ 3,701 $ 4,239 Artist payables 4,114 3,982 Accrued product costs 1,158 1,566 Accrued marketing 1,375 1,456 Contingent liabilities 1,071 — Other 3,345 3,774 Accrued expenses and other current liabilities $ 14,764 $ 15,017
Schedule of Other Long-term Liabilities	Other long-term liabilities consisted of the following (in thousands): September 30, December 31, 2017 2016 Accrued rent $ 1,415 $ 1,503 Contingent liabilities 1,821 — Other 86 243 Other liabilities $ 3,322 $ 1,746

Stock-based Compensation Plan26

Stock-based Compensation Plans and Awards (Tables)	9 Months Ended
	Sep. 30, 2017
Stock-based Compensation Plans and Awards
Stock-based Compensation Expense	Stock-based compensation expense related to all employee and non-employee stock-based awards recognized in the condensed consolidated statements of operations was as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Service costs $ 155 $ 142 $ 453 $ 1,054 Sales and marketing 209 145 586 586 Product development 475 290 1,352 1,206 General and administrative 1,343 1,103 4,035 3,272 Total stock-based compensation $ 2,182 $ 1,680 $ 6,426 $ 6,118
Stock Options Activity	Stock option activity is as follows (in thousands): Number of options outstanding Outstanding at December 31, 2016 2,856 Options granted 37 Options exercised (315) Options forfeited or cancelled (300) Outstanding at September 30, 2017 2,278
Restricted Stock Unit Activity	Restricted stock unit activity is as follows (in thousands): Number of shares Unvested at December 31, 2016 1,941 Granted 1,492 Vested (882) Forfeited (478) Unvested at September 30, 2017 2,073

Acquisitions and Dispositions (

Acquisitions and Dispositions (Tables)	9 Months Ended
	Sep. 30, 2017
Deny Designs
Schedule of Purchase Price Allocation	The following table summarizes the allocation of the purchase price for Deny Designs (in thousands): Goodwill $ 5,906 Trademark 2,300 Customer relationships 1,400 Artist relationships 300 Technology 550 Other assets and liabilities assumed 705 Total $ 11,161
Supplemental Pro Forma Financial Information	Supplemental information on an unaudited pro forma basis, as if the acquisition had been consummated as of January 1, 2016, is as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Revenue $ 33,460 $ 30,527 $ 91,845 $ 85,637 Net (loss) income (6,817) (8,112) (25,854) 4,567
The Other Art Fair
Schedule of Purchase Price Allocation	The following table summarizes the allocation of the purchase price for The Other Art Fair (in thousands): Goodwill $ 851 Trademark 556 Artist relationships 207 Other assets and liabilities assumed (143) Total $ 1,471

Business Segments (Tables)

Business Segments (Tables)	9 Months Ended
	Sep. 30, 2017
Business Segments
Schedule of financial performance of our operating segments and reconciliation to consolidated operating loss	The financial performance of our operating segments and reconciliation to consolidated operating loss is as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Segment Revenue: Marketplaces $ 22,493 $ 16,650 $ 56,061 $ 43,521 Media 10,967 11,409 33,202 35,942 Total revenue $ 33,460 $ 28,059 $ 89,263 $ 79,463 Segment Operating Expenses: Marketplaces (1) $ 22,869 $ 15,857 $ 59,584 $ 42,791 Media (1) 6,188 7,356 20,410 29,085 Add: Corporate expenses (2) 6,290 7,102 19,812 21,366 Consolidated operating expenses $ 35,347 $ 30,315 $ 99,806 $ 93,242 Segment Operating Contribution: Marketplaces (3) $ (376) $ 793 $ (3,523) $ 730 Media (3) 4,779 4,053 12,792 6,857 Add (deduct): Corporate expenses (2) (6,290) (7,102) (19,812) (21,366) Acquisition, disposition and realignment costs (4) — 99 299 1,396 Adjusted EBITDA (5) $ (1,887) $ (2,157) $ (10,244) $ (12,383) Reconciliation to consolidated pre-tax income (loss): Adjusted EBITDA (5) $ (1,887) $ (2,157) $ (10,244) $ (12,383) Add (deduct): Interest income (expense), net 64 33 143 58 Other (expense) income, net (6) (6) (31) (9) 39,131 Depreciation and amortization (7) (2,749) (4,447) (8,815) (15,035) Stock-based compensation (8) (2,182) (1,680) (6,426) (6,118) Acquisition, disposition and realignment costs (4) — (99) (299) (1,396) (Loss) income before income taxes $ (6,760) $ (8,381) $ (25,650) $ 4,257 (1) Segment operating expenses reflects operating expenses that are directly attributable to the operating segment, not including corporate and unallocated expenses, and also excluding the following: (a) depreciation expense; (b) amortization of intangible assets; (c) share-based compensation expense; (d) interest and other income (expenses); and (e) income taxes. (2) Corporate expenses include operating expenses that are not directly attributable to the operating segments, including: corporate information technology, marketing, and general and administrative support functions and also excludes the following: (a) depreciation expense; (b) amortization of intangible assets; (c) share-based compensation expense; (d) interest and other income (expenses); and (e) income taxes. (3) Segment operating contribution reflects segment revenue less segment operating expenses. Operating contribution has certain limitations in that it does not take into account the impact to the statement of operations of certain expenses and is not directly comparable to similar measures used by other companies. (4) Represents such items, when applicable, as (a) legal, accounting and other professional service fees directly attributable to acquisition, disposition or corporate realignment activities and (b) employee severance and other payments attributable to acquisition, disposition or corporate realignment activities. (5) Adjusted EBITDA reflects net income (loss) excluding interest (income) expense, income tax expense (benefit), and certain other non-cash or non-recurring items impacting net income (loss) from time to time, principally comprised of depreciation and amortization, stock-based compensation and acquisition, disposition and realignment costs. (6) Primarily consists of income from the disposition of certain businesses and online properties. (7) Represents depreciation expense of our long-lived tangible assets and amortization expense of our finite-lived intangible assets, including amortization expense related to our investment in media content assets, included in our GAAP results of operations. (8) Represents the expense related to stock-based awards granted to employees as included in our GAAP results of operations.
Summary of Revenue by Geographic Region	Revenue by geographic region, as determined based on the location of our customers or anticipated destination of use, is as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Domestic $ 28,058 $ 22,708 $ 73,064 $ 64,214 International 5,402 5,351 16,199 15,249 Total revenue $ 33,460 $ 28,059 $ 89,263 $ 79,463

Net Income (Loss) Per Share (Ta

Net Income (Loss) Per Share (Tables)	9 Months Ended
	Sep. 30, 2017
Net Income (Loss) Per Share
Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share	The following table sets forth the computation of basic and diluted net income (loss) per share of common stock (in thousands, except per share data): Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Net (loss) income $ (6,817) $ (8,349) $ (25,800) $ 4,209 Weighted average common shares outstanding—basic 20,745 20,236 20,363 20,279 Dilutive effect of common stock equivalents — — — 232 Weighted average common shares outstanding—diluted 20,745 20,236 20,363 20,511 Net (loss) income per share Basic $ (0.33) $ (0.41) $ (1.27) $ 0.21 Diluted $ (0.33) $ (0.41) $ (1.27) $ 0.21

Company Background and Overvi30

Company Background and Overview (Details)	3 Months Ended	6 Months Ended	9 Months Ended
	Mar. 31, 2017segment	Sep. 30, 2017segment	Sep. 30, 2017item
Company Background and Overview
Number of operating segments	1	2	2
Minimum
Company Background and Overview
Number of other media properties owned or hosted			40

Basis of Presentation - Revenue

Basis of Presentation - Revenue Recognition (Details) $ in Millions	9 Months Ended
	Sep. 30, 2017USD ($)
Basis of Presentation
Adjustment to product revenue due to change in shipping terms	$ 0.9

Basis of Presentation - Recent

Basis of Presentation - Recent Accounting Pronouncements (Details) $ in Millions	Sep. 30, 2017USD ($)
Basis of Presentation
Restricted cash	$ 1

Property and Equipment - Schedu

Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Property and Equipment
Property and equipment, gross	$ 46,369	$ 44,423
Less accumulated depreciation	(34,536)	(32,920)
Property and equipment, net	11,833	11,503
Computer and other related equipment
Property and Equipment
Property and equipment, gross	9,509	8,656
Purchased and internally developed software
Property and Equipment
Property and equipment, gross	28,279	27,601
Furniture and fixtures
Property and Equipment
Property and equipment, gross	1,500	1,472
Leasehold improvements
Property and Equipment
Property and equipment, gross	6,784	$ 6,694
Machinery and related equipment
Property and Equipment
Property and equipment, gross	$ 297

Property and Equipment - Additi

Property and Equipment - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Property and Equipment
Loss on disposal of property and equipment				$ 1.2
Maximum
Property and Equipment
Loss on disposal of property and equipment	$ 0.1	$ 0.1	$ 0.1

Property and Equipment - Sche35

Property and Equipment - Schedule of Depreciation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Property and Equipment
Depreciation	$ 1,436	$ 1,347	$ 4,268	$ 5,789
Product costs
Property and Equipment
Depreciation	16		31
Service costs
Property and Equipment
Depreciation	725	603	2,174	2,931
Sales and marketing
Property and Equipment
Depreciation	9	12	27	38
Product development
Property and Equipment
Depreciation	22	32	68	105
General and administrative
Property and Equipment
Depreciation	$ 664	$ 700	$ 1,968	$ 2,715

Goodwill and Intangible Asset36

Goodwill and Intangible Assets - Changes in Goodwill Balance (Details) $ in Thousands	May 01, 2017USD ($)	Sep. 30, 2017USD ($)item
Goodwill
Goodwill, Beginning Balance		$ 11,167
Acquisitions		5,906
Foreign currency impact		73
Goodwill, Ending Balance		$ 17,146
Number of reporting units | item		2
Deny Designs
Goodwill
Acquisitions	$ 5,900
Goodwill, Ending Balance	$ 5,906

Goodwill and Intangible Asset37

Goodwill and Intangible Assets - Components of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Intangible Assets
Gross carrying amount	$ 122,596	$ 118,203
Accumulated amortization	(111,037)	(106,930)
Net	11,559	11,273
Customer relationships
Intangible Assets
Gross carrying amount	2,853	1,453
Accumulated amortization	(1,558)	(1,252)
Net	1,295	201
Artist relationships
Intangible Assets
Gross carrying amount	12,233	11,916
Accumulated amortization	(10,570)	(10,337)
Net	1,663	1,579
Media content
Intangible Assets
Gross carrying amount	91,396	91,616
Accumulated amortization	(89,704)	(87,604)
Net	1,692	4,012
Technology
Intangible Assets
Gross carrying amount	6,204	5,654
Accumulated amortization	(4,458)	(3,649)
Net	1,746	2,005
Non-compete agreements
Intangible Assets
Gross carrying amount	25	25
Accumulated amortization	(18)	(11)
Net	7	14
Trade names
Intangible Assets
Gross carrying amount	9,885	7,539
Accumulated amortization	(4,729)	(4,077)
Net	$ 5,156	$ 3,462

Goodwill and Intangible Asset38

Goodwill and Intangible Assets - Amortization of Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Intangible Assets
Total amortization	$ 1,313	$ 3,100	$ 4,547	$ 9,246
Service costs
Intangible Assets
Total amortization	626	2,424	2,685	5,910
Accelerated amortization of intangible assets		1,200	700	1,700
Sales and marketing
Intangible Assets
Total amortization	194	281	533	2,178
Product development
Intangible Assets
Total amortization	294	247	809	740
General and administrative
Intangible Assets
Total amortization	199	$ 148	$ 520	$ 418
Maximum | Service costs
Intangible Assets
Accelerated amortization of intangible assets	$ 100

Other Assets - Other Assets (De

Other Assets - Other Assets (Details) - USD ($) $ in Millions	Sep. 30, 2017	Sep. 30, 2016
Standby Letter of Credit
Other Assets
Restricted cash	$ 0.8	$ 1

Accrued Expenses and Other Li40

Accrued Expenses and Other Liabilities - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Accrued Expenses and Other Current Liabilities
Accrued payroll and related items	$ 3,701	$ 4,239
Artist payables	4,114	3,982
Accrued product costs	1,158	1,566
Accrued marketing	1,375	1,456
Contingent liabilities	1,071
Other	3,345	3,774
Accrued expenses and other current liabilities	$ 14,764	$ 15,017

Accrued Expenses and Other Li41

Accrued Expenses and Other Liabilities - Other Long-term Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Accrued Expenses and Other Current Liabilities
Accrued rent	$ 1,415	$ 1,503
Contingent liabilities	1,821
Other	86	243
Other liabilities	$ 3,322	$ 1,746

Accrued Expenses and Other Li42

Accrued Expenses and Other Liabilities - Contingent Consideration (Details) - Deny Designs $ in Millions	May 01, 2017USD ($)installment
Contingent consideration
Maximum contingent consideration	$ 3.6
Number of annual installments | installment	3
Contingent consideration	$ 2.8

Accrued Expenses and Other Curr

Accrued Expenses and Other Current Liabilities - Severance Costs (Details) $ in Millions	9 Months Ended
	Sep. 30, 2016USD ($)
Severance
Severance costs	$ 1.7
Sales and marketing
Severance
Severance costs	0.7
Product development
Severance
Severance costs	0.6
Service costs
Severance
Severance costs	0.3
General and administrative
Severance
Severance costs	$ 0.1

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	Jan. 01, 2017	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
New Accounting Pronouncements
Income tax expense (benefit)		$ 57	$ (32)	$ 150	$ 48
Uncertain income tax positions recorded				$ 0	$ 0
Accounting Standards Update 2016-09 | Adjustment
New Accounting Pronouncements
Income tax expense (benefit)	$ 0
Deferred tax assets	7,300
Deferred tax assets, valuation allowance	7,300
Net deferred tax assets	$ 0

Stock-based Compensation Plan45

Stock-based Compensation Plans and Awards - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Stock-based Compensation Plans and Awards
Stock-based compensation expense	$ 2,182	$ 1,680	$ 6,426	$ 6,118
Service costs
Stock-based Compensation Plans and Awards
Stock-based compensation expense	155	142	453	1,054
Sales and marketing
Stock-based Compensation Plans and Awards
Stock-based compensation expense	209	145	586	586
Product development
Stock-based Compensation Plans and Awards
Stock-based compensation expense	475	290	1,352	1,206
General and administrative
Stock-based Compensation Plans and Awards
Stock-based compensation expense	$ 1,343	$ 1,103	$ 4,035	$ 3,272

Stock-based Compensation Plan46

Stock-based Compensation Plans and Awards - Stock Options Activity (Details) shares in Thousands	9 Months Ended
	Sep. 30, 2017shares
Stock option activity
Outstanding beginning balance (in shares)	2,856
Options granted (in shares)	37
Options exercised (in shares)	(315)
Options forfeited or canceled (in shares)	(300)
Outstanding ending balance (in shares)	2,278

Stock-based Compensation Plan47

Stock-based Compensation Plans and Awards - Restricted Stock Unit Activity (Details) - Restricted stock units (RSUs) shares in Thousands	9 Months Ended
	Sep. 30, 2017shares
Restricted stock unit activity
Unvested beginning balance (in shares)	1,941
Granted (in shares)	1,492
Vested (in shares)	(882)
Forfeited (in shares)	(478)
Unvested ending balance (in shares)	2,073

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2017	Dec. 31, 2016	Feb. 29, 2012
Stockholders Equity
Value of shares repurchased			$ 65
Treasury stock initiated for repurchase (in shares)		10,000
Repurchases unsettled (in shares)			0
Common Stock
Stockholders Equity
Authorized amount to repurchase					$ 50,000
Shares repurchased (in shares)	10,000		10,000	844,000
Treasury stock repurchased, average price per share (in dollars per share)				$ 5.74
Stock repurchase remaining authorized amount			$ 14,300
Treasury Stock
Stockholders Equity
Value of shares repurchased			$ 65	$ 4,900
Treasury Stock | Maximum
Stockholders Equity
Value of shares repurchased	$ 100

Acquisitions and Dispositions -

Acquisitions and Dispositions - Deny Designs (Details) $ in Thousands	May 01, 2017USD ($)installmentshares	Sep. 30, 2017USD ($)	Dec. 31, 2016USD ($)
Allocation of the purchase price
Goodwill		$ 17,146	$ 11,167
Deny Designs
Acquisitions
Total consideration	$ 12,000
Purchase consideration, cash	$ 6,700
Purchase consideration, common stock, shares | shares	215,000
Purchase consideration, common stock, value	$ 1,700
Contingent consideration	$ 3,600
Number of annual installments | installment	3
Allocation of the purchase price
Goodwill	$ 5,906
Other assets and liabilities assumed	705
Total purchase consideration	$ 11,161
Weighted average useful life	7 years
Contingent consideration
Contingent consideration	$ 2,800
Maximum contingent consideration	3,600
Deny Designs | Contingent Consideration, Payable in First Year
Contingent consideration
Minimum contingent consideration	300
Maximum contingent consideration	1,200
Deny Designs | Contingent Consideration, Payable in Second Year
Contingent consideration
Minimum contingent consideration	300
Maximum contingent consideration	1,200
Deny Designs | Contingent Consideration, Payable in Third Year
Contingent consideration
Minimum contingent consideration	300
Maximum contingent consideration	1,200
Deny Designs | Trademark
Allocation of the purchase price
Intangibles	$ 2,300
Intangibles, useful life	10 years
Deny Designs | Customer relationships
Allocation of the purchase price
Intangibles	$ 1,400
Intangibles, useful life	5 years
Deny Designs | Artist relationships
Allocation of the purchase price
Intangibles	$ 300
Intangibles, useful life	3 years
Deny Designs | Technology
Allocation of the purchase price
Intangibles	$ 550
Intangibles, useful life	3 years

Acquisitions and Dispositions50

Acquisitions and Dispositions - Pro Forma (Details) - Deny Designs - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Acquisitions
Revenue	$ 33,460	$ 30,527	$ 91,845	$ 85,637
Net income (loss)	$ (6,817)	$ (8,112)	$ (25,854)	$ 4,567

Acquisitions and Dispositions51

Acquisitions and Dispositions - Other Art Fairs Ltd (Details) $ in Thousands	Jul. 07, 2016GBP (£)	Jul. 07, 2016USD ($)	Sep. 30, 2017USD ($)	Dec. 31, 2016USD ($)
Allocation of the purchase price
Goodwill			$ 17,146	$ 11,167
The Other Art Fair
Acquisitions
Total consideration	£ 1,100,000	$ 1,500
Contingent consideration | £	£ 315,000
Consideration payable, term	3 years	3 years
Allocation of the purchase price
Goodwill		$ 851
Other assets and liabilities assumed		(143)
Total purchase consideration		$ 1,471
Intangibles, useful life	4 years	4 years
The Other Art Fair | Trademark
Allocation of the purchase price
Intangibles		$ 556
Intangibles, useful life	5 years	5 years
The Other Art Fair | Artist relationships
Allocation of the purchase price
Intangibles		$ 207
Intangibles, useful life	3 years	3 years

Acquisitions and Dispositions52

Acquisitions and Dispositions - Dispositions (Details) $ in Thousands	Apr. 12, 2016USD ($)	Jul. 31, 2017USD ($)	Sep. 30, 2016USD ($)item
Dispositions
Gain on sale of business			$ 39,149
Cracked | Sold
Dispositions
Total consideration received	$ 39,000
Restricted cash in escrow to secure post-closing indemnification	3,900
Amount of escrow released		$ 3,900
Revenue			1,800
Pre-tax loss			$ 1,900
Net assets sold	600
Transaction costs incurred during sale	300
Certain non-core online properties | Sold
Dispositions
Number of properties sold | item			1
Total consideration received			$ 1,000
Other income, net | Cracked | Sold
Dispositions
Gain on sale of business	$ 38,100
Other income, net | Certain non-core online properties | Sold
Dispositions
Gain on sale of business			$ 1,000

Business Segments - Number of O

Business Segments - Number of Operating Segments (Details)	3 Months Ended	6 Months Ended	9 Months Ended
	Mar. 31, 2017segment	Sep. 30, 2017segment	Sep. 30, 2017item
Business Segments
Number of operating segments	1	2	2

Business Segments - Financial P

Business Segments - Financial Performance by Segment and Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Segment Revenue:
Total revenue	$ 33,460	$ 28,059	$ 89,263	$ 79,463
Segment Operating Expenses:
Consolidated operating expenses	35,347	30,315	99,806	93,242
Segment operating contribution and Reconciliation to consolidated pre-tax income (loss):
Adjusted EBITDA	(1,887)	(2,157)	(10,244)	(12,383)
Add (deduct)
Interest income (expense), net	64	33	143	58
Other (expense) income, net	(6)	(31)	(9)	39,131
Depreciation and amortization	(2,749)	(4,447)	(8,815)	(15,035)
Stock-based compensation expense	(2,182)	(1,680)	(6,426)	(6,118)
Acquisition, disposition and realignment costs		(99)	(299)	(1,396)
(Loss) income before income taxes	(6,760)	(8,381)	(25,650)	4,257
Corporate
Segment Operating Expenses:
Consolidated operating expenses	6,290	7,102	19,812	21,366
Segment operating contribution and Reconciliation to consolidated pre-tax income (loss):
Adjusted EBITDA	(6,290)	(7,102)	(19,812)	(21,366)
Acquisition, disposition and realignment costs
Segment operating contribution and Reconciliation to consolidated pre-tax income (loss):
Adjusted EBITDA		99	299	1,396
Marketplaces
Segment Revenue:
Total revenue	22,493	16,650	56,061	43,521
Marketplaces | Operating Segments
Segment Operating Expenses:
Consolidated operating expenses	22,869	15,857	59,584	42,791
Segment operating contribution and Reconciliation to consolidated pre-tax income (loss):
Adjusted EBITDA	(376)	793	(3,523)	730
Media
Segment Revenue:
Total revenue	10,967	11,409	33,202	35,942
Media | Operating Segments
Segment Operating Expenses:
Consolidated operating expenses	6,188	7,356	20,410	29,085
Segment operating contribution and Reconciliation to consolidated pre-tax income (loss):
Adjusted EBITDA	$ 4,779	$ 4,053	$ 12,792	$ 6,857

Business Segments - Summary of

Business Segments - Summary of Revenue by Geographic Region (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenue
Total revenue	$ 33,460	$ 28,059	$ 89,263	$ 79,463
Domestic
Revenue
Total revenue	28,058	22,708	73,064	64,214
International
Revenue
Total revenue	$ 5,402	$ 5,351	$ 16,199	$ 15,249

Fair Value - Fair Value, Financ

Fair Value - Fair Value, Financial Assets, Recurring (Details) - USD ($) $ in Millions	May 01, 2017	Sep. 30, 2016
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3
Fair Value
Contingent consideration	$ 2.8
Fair Value, Measurements, Recurring | Money Market Funds | Fair Value, Inputs, Level 1
Fair Value
Cash equivalents		$ 5
Deny Designs
Fair Value
Contingent consideration	2.8
Maximum contingent consideration	3.6
Deny Designs | Contingent Consideration, Payable in First Year
Fair Value
Minimum contingent consideration	0.3
Maximum contingent consideration	1.2
Deny Designs | Contingent Consideration, Payable in Second Year
Fair Value
Minimum contingent consideration	0.3
Maximum contingent consideration	1.2
Deny Designs | Contingent Consideration, Payable in Third Year
Fair Value
Minimum contingent consideration	0.3
Maximum contingent consideration	$ 1.2

Net Income (Loss) Per Share - C

Net Income (Loss) Per Share - Computation Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net Income (Loss) Per Share
Net (loss) income	$ (6,817)	$ (8,349)	$ (25,800)	$ 4,209
Weighted average common shares outstanding - basic	20,745	20,236	20,363	20,279
Dilutive effect of common stock equivalents				232
Weighted average common shares outstanding - diluted	20,745	20,236	20,363	20,511
Net (loss) income per share
Basic (in dollars per share)	$ (0.33)	$ (0.41)	$ (1.27)	$ 0.21
Diluted (in dollars per share)	$ (0.33)	$ (0.41)	$ (1.27)	$ 0.21

Net Income (Loss) Per Share - A

Net Income (Loss) Per Share - Additional Information (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net Income (Loss) Per Share
Antidilutive common stock equivalent shares excluded from calculation of diluted net income (loss) per share (in shares)	2.2	3.6	2.5	3.4