Non-GAAP Disclosure:

This presentation includes reference to Adjusted EBITDA and Segment Operating Contribution, each of which is a non-GAAP measure. These non-GAAP measures are in addition to, not a

substitute for or superior to, measures of financial performance prepared in accordance with GAAP. The non-GAAP measures used by Leaf Group may differ from the non-GAAP measures used

by other companies. Leaf Group considers these non-GAAP financial measures to be important because they provide a useful measure of the operating performance of Leaf Group and are used

by Leaf Group's management for that purpose, as discussed in greater detail in our earnings releases, which can be found on the Investor Relations section of Leaf Group's corporate website at

http://ir.leafgroup.com. In addition, a reconciliation of non-GAAP measures to the most directly comparable GAAP measures is available in the Appendix to this presentation.

2

Society6 Group GTV

B2B GTV

+121%

+48%

U.S. DTC GTV

International GTV

+149%

+56%

ADJUSTED EBITDA (1)(2)

OPERATING CASH FLOW

FREE CASH FLOW

$ Millions

$ Millions

$ Millions

$2.6

$2.1

$7.9

$6.2

$0.3

$4.5

$4.1

$2.3

$2.6

($0.2)

$2.9

$0.9

($5.4)

($3.9)

($5.6)

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

Q3'19

Q4'19

Q1'20

Q2'20

Q3'20

($ in thousands)

Q1' 18

Q2' 18

Q3' 18

Q4' 18

Q1' 19

Q2' 19

Q3' 19

Q4' 19

Q1' 20

Q2' 20

Q3' 20

Segment Revenue:

Society6 Group

$

16,998

$

15,203

$

19,205

$

22,446

$

15,993

$

34,665

$

43,631

Saatchi Art Group

3,840

3,986

4,122

3,825

2,748

3,982

4,668

Marketplaces

$

20,967

$

19,655

$

24,712

$

28,603

Media Group

12,780

14,666

16,744

16,916

13,200

16,600

16,703

18,828

14,124

12,321

14,956

Total

$

33,747

$

34,321

$

41,456

$

45,519

$

34,038

$

35,789

$

40,030

$

45,099

$

32,865

$

50,968

$

63,255

Segment Operating Contribution

Society6 Group(1)

$

(638)

$

(605)

$

1,125

$

428

$

(445)

$

3,952

$

3,769

Saatchi Art Group(1)

(673)

(739)

(310)

(770)

(1,347)

(295)

(93)

Marketplaces(1)

$

61

$

(548)

$

326

$

(967)

Media Group (1)

5,457

6,534

6,559

7,866

3,609

6,645

6,664

7,812

3,744

4,775

6,123

Add (deduct):

Strategic shared services and corporate overhead(2)

(6,765)

(6,824)

(6,774)

(6,726)

(7,927)

(7,237)

(7,179)

(7,682)

(7,329)

(6,330)

(7,220)

Acquisition, disposition and realignment costs(3)

-

224

17

79

-

-

-

-

-

-

-

Adjusted EBITDA

$

(1,247)

$

(614)

$

128

$

252

$

(5,629)

$

(1,936)

$

300

$

(212)

$

(5,377)

$

2,102

$

2,579

Reconciliation to consolidated pre-tax income (loss):

Adjusted EBITDA

$

(1,247)

$

(614)

$

128

$

252

$

(5,629)

$

(1,936)

$

300

$

(212)

$

(5,377)

$

2,102

$

2,579

Add (deduct):

Interest income (expense), net

17

29

114

146

118

60

39

8

(66)

(97)

(102)

Other income (expense), net

(8)

(25)

(59)

13

(7)

19

(6)

34

10

3,837

5,537

Depreciation and amortization(4)

(2,455)

(2,446)

(2,687)

(2,682)

(2,716)

(2,662)

(2,362)

(2,371)

(2,487)

(2,506)

(2,280)

Stock-based compensation(5)

(2,208)

(2,676)

(2,502)

(2,045)

(1,921)

(2,209)

(2,460)

(2,774)

(2,704)

(2,523)

(2,035)

Acquisition, disposition, realignment and contingent payment costs(6)

-

(539)

(1,016)

(584)

(90)

-

-

-

-

-

-

Income (loss) before income taxes(7)

$

(5,901)

$

(6,271)

$

(6,022)

$

(4,900)

$

(10,245)

$

(6,728)

$

(4,489)

$

(5,315)

$

(10,624)

$

813

$

3,699

1)

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 (expense); (e) income

2)

taxes; and (f) contingent payments to certain key employees/equity holders of acquired businesses.

Strategic shared services include shared operating expenses that are not directly attributable to the operating segments, including: network operations center, marketing, business development, product development, creative, financial systems, quality assurance,

software engineering, and information systems. Corporate overhead includes general and administrative support functions that are not directly attributable to the operating segments, including: executive, accounting, finance, human resources, legal, and facilities.

3)

Strategic shared services and corporate overhead 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.

Represents such items, when applicable, as (a) legal, accounting and other professional service fees directly attributable to acquisition, disposition or corporate realignment activities, (b) employee severance, and (c) other payments attributable to acquisition, disposition

4)

or corporate realignment activities, excluding contingent payments to certain key employees/equity holders of acquired businesses.

Represents depreciation expense of the Company's long-lived tangible assets and amortization expense of its finite-lived intangible assets, including amortization expense related to its investment in media content assets, included in the Company's GAAP results of

5)

operations.

Represents the expense related to stock-based awards granted to employees as included in the Company's GAAP results of operations.

6)

Represents such items, when applicable, as (a) legal, accounting and other professional service fees directly attributable to acquisition, disposition or corporate realignment activities, (b) employee severance, (c) contingent payments to certain key employees/equity

7)

holders of acquired businesses, and (d) other payments attributable to acquisition, disposition or corporate realignment activities.

In Q2 2020, we had $1.5 million in cost savings, which included temporary salary cuts of our executive team and salaried direct workforce (whose salaries were reinstated effective with payroll paid on June 30, 2020) and compensation cuts and deferrals of compensation

of our independent directors (whose cash retainer compensation was reinstated, effective July 1, 2020), neither of which is expected to reoccur.

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