Leaf Group Announces Preliminary Second Quarter 2020 Results

Records Highest Quarterly Revenue Growth Rate Since Q1 2011

Highest Quarterly Revenue Since 2013

Society6 Group and Saatchi Art Group Both Post Record Quarterly Revenue and New Customers

SANTA MONICA, Calif., July 02, 2020 (GLOBE NEWSWIRE) -- Leaf Group Ltd. (NYSE: LEAF), a diversified consumer internet company, today provided a financial update. Leaf Group’s second quarter 2020 revenue grew over 35% year-over-year, reflecting strong Marketplaces growth through the end of June 2020, partially offset by lower Media revenue. Leaf Group’s second quarter 2020 revenue was its highest since fiscal year 2013, driven by its strongest year-over-year revenue growth rate since the first quarter of 2011.  

• Society6 Group Gross Transaction Value (GTV) increased over 125% year-over-year in the second quarter 2020 driven by overall Direct-to-Consumer (DTC) GTV growth of over 150%, including over 170% growth in the US and over 75% growth internationally. Society6 Group experienced strong eCommerce demand across all its main categories of Wall Art, Home Décor, and Technology as well as recently-launched Masks on June 23, 2020.
   
• Saatchi Art Group GTV increased over 40% year-over-year in the second quarter. This growth was driven by strength in the Saatchi Art Group online marketplace and recently-launched The Other Art Fair Online Studios, partially offset by the postponement or cancellation of five live fairs in the second quarter 2020.
   
• Media revenue declined approximately 28% year-over-year in the second quarter 2020, impacted, in part, by the timing of advertising campaigns for certain of our direct advertising clients.
   
• As of June 30, 2020, Leaf Group had over $25 million in cash and cash equivalents.  On April 30, Leaf Group sold a library of content currently displayed on selected Hearst websites to Hearst Newspapers in exchange for $9.5 million, of which $4 million was paid at signing, and up to an additional $5.5 million will be paid upon completion of the content migration, expected to be finalized in the third quarter of 2020.

“We are very proud of the company’s record performance, particularly amidst the current macroeconomic environment,” said Sean Moriarty, CEO of Leaf Group. “We believe these results clearly demonstrate that our strategy continues to gain significant momentum. We saw the positive impact of the structural and management changes we have made really begin to take hold in the first quarter of this year – prior to the global pandemic. Now, that positive impact has been even further accelerated by what we view as a fundamental shift in consumer behavior and eCommerce, prompted in part by stay-at-home orders and the shift to remote work. We believe that these behavioral changes are here to stay – and we expect them to continue to drive sustainable growth across our properties going forward.”