10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 001-36219

Sizmek Inc.

(Exact name of registrant as specified in its charter)

Delaware	37-1744624
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

500 West 5th Street, Suite 900

Austin, Texas 78701

 (Address of principal executive offices) (Zip Code)

(512) 469-5900

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 

Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 

Yes x  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer x	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

Yes o  No x

As of August 11, 2015, the registrant had 29,550,310 shares of Common Stock, par value $0.001, outstanding.

SIZMEK INC.

Cautionary Note Regarding Forward-Looking Statements

        The Securities and Exchange Commission ("SEC") encourages companies to disclose forward-looking information so that investors can better understand a company's future prospects and make informed investment decisions. Certain statements contained herein may be deemed to constitute "forward-looking statements."

        Words such as "believe," "expect," "anticipate," "project," "estimate," "budget," "continue," "could," "intend," "may," "plan," "potential," "predict," "seek," "should," "will," "would," "objective," "forecast," "goal," "guidance," "outlook," "effort," "target" and similar expressions, among others, generally identify forward-looking statements, which speak only as of the date the statements were made. All forward-looking statements are management's present expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, among other things:

· our ability to further identify, develop and achieve commercial success for new online video and mobile products;

· continued or accelerating decline in our rich-media business;

· delays in product offerings;

· the development and pricing of competing online services and products;

· consolidation of the digital industry and of digital advertising networks;

· slower than expected development of the digital advertising market;

· our ability to protect our proprietary technologies;

· identifying acquisition and disposition opportunities and integrating our acquisitions with our operations, systems, personnel and technologies;

· security threats to our computer networks;

· operating in a variety of foreign jurisdictions;

· fluctuations in currency exchange rates;

· adaption to new, changing, and competitive technologies;

· potential additional impairment of our goodwill and potential impairment of our other long-lived assets;

· our ability to achieve some or all of the expected benefits of the spin-off and merger transaction; and

· other risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2014.

        In particular, information included under the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" contains forward-looking statements.

        In light of these assumptions, risks and uncertainties, the results and events discussed in the forward-looking statements contained herein might not occur. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this filing. We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. All subsequent forward-looking statements attributable to management or to any person authorized to act on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

2

PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

SIZMEK INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except par value amounts)

	June 30, 2015			December 31, 2014
	(unaudited)
Assets
CURRENT ASSETS:
Cash and cash equivalents	$	66,932		$	90,672
Accounts receivable (less allowances of $773 and $813 as of June 30, 2015 and December 31, 2014, respectively)		48,471			51,125
Deferred income taxes		588			636
Restricted cash		1,578			1,538
Other current assets		7,468			5,254
Current assets of TV business		1,270			2,470
Total current assets		126,307			151,695
Property and equipment, net		39,071			34,036
Goodwill		51,288			40,154
Intangible assets, net		68,894			71,306
Deferred income taxes		354			387
Restricted cash		4,590			3,941
Other non-current assets		3,074			3,393
Total assets	$	293,578		$	304,912
Liabilities and Stockholders’ Equity
CURRENT LIABILITIES:
Accounts payable	$	3,813		$	3,976
Accrued liabilities		26,101			19,171
Current liabilities of TV business		206			395
Total current liabilities		30,120			23,542
Deferred income taxes		7,645			8,242
Other non-current liabilities		7,797			6,433
Non-current liabilities of TV business		273			260
Total liabilities		45,835			38,477
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.001 par value—Authorized 15,000 shares; issued and outstanding—none		—			—
Common stock, $0.001 par value—Authorized 200,000 shares; 30,496 issued and 29,550 outstanding at June 30, 2015; 30,399 issued and 30,071 outstanding at December 31, 2014		30			30
Treasury stock, at cost (946 shares and 328 shares at June 30, 2015 and December 31, 2014, respectively)		(6,500	)		(2,000	)
Additional capital		372,995			371,261
Accumulated deficit		(117,183	)		(101,341	)
Accumulated other comprehensive loss		(1,599	)		(1,515	)
Total stockholders’ equity		247,743			266,435
Total liabilities and stockholders’ equity	$	293,578		$	304,912

The accompanying notes are an integral part of these financial statements.

3

SIZMEK INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Revenues:
Platform related	$	35,645		$	39,440		$	68,537		$	74,266
Programmatic managed services		4,571			4,561			8,438			8,114
Total		40,216			44,001			76,975			82,380
Cost of revenues (excluding depreciation and amortization):
Platform related		11,175			12,126			22,010			24,031
Programmatic managed services		3,317			3,142			6,142			5,723
Total		14,492			15,268			28,152			29,754
Selling and marketing		15,433			14,514			29,636			30,102
Research and development		3,674			3,193			6,577			6,741
General and administrative		4,739			5,083			9,293			13,188
Merger, integration and other		1,170			1,344			2,004			6,289
Depreciation and amortization		7,771			6,449			15,210			12,977
Loss from operations		(7,063	)		(1,850	)		(13,897	)		(16,671	)
Other expense, net		366			205			1,345			208
Loss before income taxes		(7,429	)		(2,055	)		(15,242	)		(16,879	)
Provision (benefit) for income taxes		468			(413	)		600			(819	)
Net loss	$	(7,897	)	$	(1,642	)	$	(15,842	)	$	(16,060	)
Basic and diluted loss per common share	$	(0.27	)	$	(0.05	)	$	(0.53	)	$	(0.53	)
Weighted average common shares outstanding:
Basic and diluted		29,549			30,399			29,666			30,399

The accompanying notes are an integral part of these financial statements.

4

SIZMEK INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED AND COMBINED STATEMENTS OFCOMPREHENSIVE LOSS

(In thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Net loss	$	(7,897	)	$	(1,642	)	$	(15,842	)	$	(16,060	)
Other comprehensive income (loss):
Unrealized gain (loss) on derivatives, net of tax		469			(15	)		374			(92	)
Unrealized gain (loss) on available for sale securities, net of tax		(6	)		770			(234	)		36
Foreign currency translation adjustment		580			375			(224	)		472
Total other comprehensive income (loss)		1,043			1,130			(84	)		416
Total comprehensive loss	$	(6,854	)	$	(512	)	$	(15,926	)	$	(15,644	)

The accompanying notes are an integral part of these financial statements.

5

SIZMEK INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(In thousands)

	Common Stock (Shares / Amount)				Treasury Stock (Shares / Amount)						Additional Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Total Stockholders’ Equity
Balance at December 31, 2014		30,399	$	30		(328	)	$	(2,000	)	$	371,261		$	(101,341	)	$	(1,515	)	$	266,435
Net loss		—		—		—			—			—			(15,842	)		—			(15,842	)
Share-based compensation		—		—		—			—			1,903			—			—			1,903
Common stock issued pursuant to RSU agreements, net of shares tendered to satisfy required tax withholding		97		—		—			—			(169	)		—			—			(169	)
Purchase of treasury stock		—		—		(618	)		(4,500	)		—			—			—			(4,500	)
Other comprehensive loss		—		—		—			—			—			—			(84	)		(84	)
Balance at June 30, 2015		30,496	$	30		(946	)	$	(6,500	)	$	372,995		$	(117,183	)	$	(1,599	)	$	247,743

The accompanying notes are an integral part of these financial statements.

6

SIZMEK INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

(In thousands)

	Six Months Ended June 30,
	2015			2014
Cash flows from operating activities:
Net loss	$	(15,842	)	$	(16,060	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation of property and equipment		7,335			4,959
Amortization of intangibles		7,875			8,018
Share-based compensation		1,903			7,533
Deferred income taxes		(590	)		(702	)
Benefit for accounts receivable recoveries		(40	)		(157	)
Gain from recovery of TV business net assets		(50	)		—
Other		(2	)		(349	)
Changes in operating assets and liabilities:
Accounts receivable		6,252			1,814
Other assets		(1,574	)		(1,568	)
Accounts payable and other liabilities		(5,598	)		(1,322	)
Net cash (used in) provided by operating activities		(331	)		2,166
Cash flows from investing activities:
Purchases of property and equipment		(3,131	)		(2,310	)
Capitalized costs of developing software		(8,370	)		(5,639	)
Acquisition, net of cash acquired		(7,541	)		—
Purchase of long term investment		—			(975	)
Other		(433	)		(776	)
Net cash used in investing activities		(19,475	)		(9,700	)
Cash flows from financing activities:
Purchases of treasury stock		(4,500	)		—
Payments of TV business liabilities		(126	)		(9,346	)
Proceeds from TV business assets		1,200			43,013
Payment of tax withholding obligation for shares tendered		(169	)		—
Net contributions from Parent		—			44,833
Net cash (used in) provided by financing activities		(3,595	)		78,500
Effect of exchange rate changes on cash and cash equivalents		(339	)		32
Net (decrease) increase in cash and cash equivalents		(23,740	)		70,998
Cash and cash equivalents at beginning of year		90,672			22,648
Cash and cash equivalents at end of period	$	66,932		$	93,646
Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	445		$	1,396
Cash received for interest	$	(47	)	$	—
Extended payment obligations incurred to purchase software	$	960		$	—

The accompanying notes are an integral part of these financial statements.

7

SIZMEK INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

1. Basis of Presentation

The Company

Sizmek Inc. ("Sizmek," the "Company," "we," "us," and "our"), a Delaware corporation formed in 2013, operates a leading independent global online ad campaign management and distribution platform as measured by the number of advertising impressions served and the number of countries in which we serve customers. Our revenues are principally derived from services related to online advertising. We help advertisers, agencies and publishers engage with consumers across multiple online media channels (mobile, display, rich media, video and social) while delivering efficient, impactful and measurable ad campaigns. We connect approximately 17,000 advertisers and 3,500 agencies to audiences in about 60 countries, serving more than 1.4 trillion impressions a year.

Separation from Digital Generation, Inc.

Prior to February 7, 2014, we operated as the online segment of Digital Generation, Inc. ("DG"), a leading global television and online advertising management and distribution business. On February 7, 2014, pursuant to the terms of the Agreement and Plan of Merger, dated as of August 12, 2013 (the "Merger Agreement"), by and among Extreme Reach, Inc. ("Extreme Reach"), Dawn Blackhawk Acquisition Corp., a wholly-owned subsidiary of Extreme Reach ("Acquisition Sub"), and DG, all of our issued and outstanding shares of common stock, par value $0.001 per share ("Sizmek Common Stock") were distributed by DG pro rata to its stockholders (the "Spin-Off") with the DG stockholders receiving one share of Sizmek Common Stock for each share of DG common stock ("DG Common Stock") they held. Immediately after the distribution of the Sizmek Common Stock, pursuant to the Merger Agreement, Acquisition Sub merged with and into DG with DG as the surviving corporation (the "Merger") and each of the outstanding shares of DG Common Stock was converted into the right to receive $3.00 per share, and DG became a wholly-owned subsidiary of Extreme Reach. Prior to the Spin-Off, pursuant to the Separation and Redemption Agreement and related documents, DG contributed to us all of the business and operations of its online advertising segment, all of DG's cash, most of the working capital from its television segment, and certain other corporate assets; and we agreed to indemnify DG and affiliates of DG (including Extreme Reach) for all pre-closing liabilities of DG, including stockholder litigation, tax obligations, and employee liabilities. Sizmek now operates as a separate, stand-alone publicly-traded company in the online advertising services business segment.

Carve-out Financial Statements Prior to Spin-Off

Prior to our Spin-Off from DG on February 7, 2014, our combined financial statements were derived from the consolidated financial statements and accounting records of DG. These statements reflected the combined historical results of operations, financial position and cash flows of DG's online business primarily conducted through MediaMind Technologies Inc., EyeWonder, LLC, Peer39, Inc., and Unicast EMEA, Ltd., and an allocable portion of DG's corporate costs. For the period prior to the Spin-Off, our financial statements are presented as if such businesses had been combined for all periods presented.

All intercompany transactions have been eliminated. All intercompany transactions between us and DG have been included in these combined financial statements and are considered to be effectively settled for cash in the combined financial statements at the time the transaction is recorded. The total net effect of the settlement of these intercompany transactions is reflected in the combined statements of cash flows as a financing activity.

For the period prior to our Spin-Off on February 7, 2014, the combined financial statements include expense allocations for (1) certain corporate functions historically provided by DG, including, but not limited to, finance, audit, legal, information technology, human resources, communications, compliance, and shared services; (2) employee benefits and incentives; and (3) share-based compensation. These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on a pro-rata basis of combined revenues, headcount or other measures of the Company and DG. We consider the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to, or the benefit received by, us during the period presented. The allocations may not, however, reflect the expense we would have incurred as an independent, publicly-traded company for the period presented. We benefited from sharing the corporate cost structure of DG rather than incurring such costs ourselves on a stand-alone basis.

8

The majority of the pre Spin-Off expense allocations were charged to general and administrative expense. For the periods subsequent to the Spin-Off, general and administrative expense as a percentage of revenues (excluding the accelerated recognition of share-based payment awards in connection with the Spin-Off in February 2014) has been comparable to the corresponding period of the prior year. Accordingly, while we benefited from sharing DG's cost structure prior to the Spin-Off, since the Spin-Off we have been able to control our corporate overhead expenses to a level reasonably consistent with the pre Spin-Off periods.

2. General

Principles of Consolidation and Combination

The consolidated and combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the accounts of our wholly-owned, and majority-owned and controlled subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation or combination.  For the period prior to the Spin-Off, the carve-out financial statements have been prepared on a basis that management believes to be reasonable to reflect the results of operations and cash flows of the Company’s operations, including portions of DG’s corporate costs and administrative shared services. These unaudited financial statements should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

These financial statements have been prepared by us without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.  However, we believe the disclosures are adequate to make the information presented not misleading.  The unaudited consolidated and combined financial statements reflect all adjustments, which are, in the opinion of management, of a normal and recurring nature and necessary for a fair presentation of our financial position as of the balance sheet dates, and the results of operations and cash flows for the periods presented.

Seasonality

Our business is seasonal. Revenues tend to be the highest in the fourth quarter as a large portion of our revenues follow the advertising spend or budgets of our customers which tend to be at their highest during the holiday season.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to the recoverability and useful lives of our long-lived assets, the adequacy of our allowance for doubtful accounts and credit memo reserves, contingent consideration and income taxes. We base our estimates on historical experience, future expectations and on other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

Effective November 1, 2014, we shortened the estimated remaining useful life of our Sizmek MDX platform assets from an average of 46 months to 20 months in anticipation of our new platform, which is currently in development.  We anticipate the new platform will be operational by the end of 2015 and we expect to retire our existing platform by mid-2016.  For the first six months of 2015, this change increased our net loss and loss per share by $1.6 million and $0.05, respectively.

Risk of Goodwill Impairment

See Note 5 for a discussion of the risk of a future impairment of our goodwill.

9

Assets and Liabilities of DG’s TV Business

Pursuant to the Separation and Redemption Agreement, DG contributed to us substantially all of its television business current assets and certain other assets existing on February 7, 2014, and we agreed to assume substantially all of DG’s television business liabilities that existed on February 7, 2014 or were attributable to periods up to and including February 7, 2014.  These net assets contributed were recorded at $78.5 million.  The details of these assets and liabilities outstanding as of June 30, 2015 and December 31, 2014 were as follows (in thousands):

Description	June 30, 2015		December 31, 2014
Current assets of television business:
Income tax receivables	$	1,110	$	1,943
Trade accounts receivable	—		367
Springbox revenue sharing	160		160
Total	$	1,270	$	2,470
Current liabilities of television business:
Trade accounts payable	$	206	$	165
Accrued liabilities	—		230
Total	$	206	$	395
Non-current liabilities of television business:
Uncertain tax positions	$	273	$	260

Derivative Instruments

We enter into foreign currency forward contracts and options to hedge a portion of the exposure to the variability in expected future cash flows resulting from changes in related foreign currency exchange rates between the New Israeli Shekel (“NIS”) and the U.S. Dollar. These transactions were designated as cash flow hedges, as defined by Accounting Standards Codification (“ASC”) Topic 815, “Derivatives and Hedging.”  ASC Topic 815 requires that we recognize derivative instruments as either assets or liabilities in our balance sheet at fair value. These contracts are Level 2 fair value measurements in accordance with ASC Topic 820, “Fair Value Measurements and Disclosures.” For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss), net of taxes, and reclassified into earnings (various operating expenses) in the same period or periods during which the hedged transaction affects earnings.

Our cash flow hedging strategy is to hedge against the risk of overall changes in cash flows resulting from certain forecasted foreign currency rent and salary payments during the next twelve months. We hedge portions of our forecasted expenses denominated in the NIS with a single counterparty using foreign currency forward contracts and options.  At June 30, 2015, we had $12.6 million notional amount of foreign currency forward contracts and options outstanding that had a net fair value asset balance of $0.3 million ($0.4 million asset, net of a $0.1 million liability).  At December 31, 2014, we had $14.3 million notional amount of foreign currency forward contracts and options outstanding that had a net fair value liability balance of $0.1 million ($0.2 million liability, net of a $0.1 million asset). The net asset at June 30, 2015 is included in "other current assets" and is expected to be recognized in our results of operations in the next twelve months. The net liability at December 31, 2014 was included in “accrued liabilities.”  The vast majority of any gain or loss from hedging activities is included in our various operating expenses. As a result of our hedging activities, we incurred the following gains and losses in our results of operations (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015			2014
Hedging gain (loss) recognized in operations	$	24	$	29	$	(47	)	$	115

It is our policy to offset fair value amounts recognized for derivative instruments executed with the same counterparty. In connection with our foreign currency forward contracts and options and other banking arrangements, we have agreed to maintain $1.6 million of cash in bank accounts with our counterparty, which we classify as restricted cash on our balance sheet.

10

Accumulated Other Comprehensive Income (Loss)

Components of accumulated other comprehensive income (loss) (“AOCI” or “AOCL”), net of tax, for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands):

	Three Months Ended June 30, 2015
	Foreign Currency Translation			Unrealized Gains (Losses) on Foreign Currency Derivatives			Unrealized Gains (Losses) on Available for Sale Securities			Total Accumulated Other Comprehensive Income (Loss)
Balance at March 31, 2015	$	(3,476	)	$	(193	)	$	1,027		$	(2,642	)
Other comprehensive income (loss) before reclassifications		580			491			(6	)		1,065
Amounts reclassified out of AOCL		—			(22	)		—			(22	)
Net current period activity		580			469			(6	)		1,043
Balance at June 30, 2015	$	(2,896	)	$	276		$	1,021		$	(1,599	)

	Six Months Ended June 30, 2015
	Foreign Currency Translation			Unrealized Gains (Losses) on Foreign Currency Derivatives			Unrealized Gains (Losses) on Available for Sale Securities			Total Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2014	$	(2,672	)	$	(98	)	$	1,255		$	(1,515	)
Other comprehensive income (loss) before reclassifications		(224	)		332			(234	)		(126	)
Amounts reclassified out of AOCL		—			42			—			42
Net current period activity		(224	)		374			(234	)		(84	)
Balance at June 30, 2015	$	(2,896	)	$	276		$	1,021		$	(1,599	)

	Three Months Ended June 30, 2014
	Foreign Currency Translation			Unrealized Gains (Losses) on Foreign Currency Derivatives			Unrealized Gains (Losses) on Available for Sale Securities		Total Accumulated Other Comprehensive Income (Loss)
Balance at March 31, 2014	$	(1,101	)	$	39		$	1,030	$	(32	)
Other comprehensive income (loss) before reclassifications		375			10			770		1,155
Amounts reclassified out of AOCL		—			(25	)		—		(25	)
Net current period activity		375			(15	)		770		1,130
Balance at June 30, 2014	$	(726	)	$	24		$	1,800	$	1,098

	Six Months Ended June 30, 2014
	Foreign Currency Translation			Unrealized Gains (Losses) on Foreign Currency Derivatives			Unrealized Gains (Losses) on Available for Sale Securities		Total Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2013	$	(1,198	)	$	116		$	1,764	$	682
Other comprehensive income (loss) before reclassifications		472			8			36		516
Amounts reclassified out of AOCI		—			(100	)		—		(100	)
Net current period activity		472			(92	)		36		416
Balance at June 30, 2014	$	(726	)	$	24		$	1,800	$	1,098

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The following table summarizes the reclassifications from AOCI or AOCL to the consolidated and combined statements of operations for the three and six months ended June 30, 2015 and 2014 (in thousands):

	Amounts Reclassified out of AOCI or AOCL
	Three Months Ended June 30, 2015			Three Months Ended June 30, 2014			Affected Line Items in the Consolidated and Combined Statements of Operations
Gains (losses) on cash flow hedges:
Foreign currency derivatives	$	3		$	4		Cost of revenues
Foreign currency derivatives		1			2		Selling and marketing
Foreign currency derivatives		14			19		Research and development
Foreign currency derivatives		3			5		General and administrative
Foreign currency derivatives		3			(1	)	Other, net
Total before taxes		24			29
Tax amounts		(2	)		(4	)
Income after tax	$	22		$	25

	Amounts Reclassified out of AOCI or AOCL
	Six Months Ended June 30, 2015			Six Months Ended June 30, 2014			Affected Line Items in the Consolidated and Combined Statements of Operations
Gains (losses) on cash flow hedges:
Foreign currency derivatives	$	(5	)	$	11		Cost of revenues
Foreign currency derivatives		(2	)		5		Selling and marketing
Foreign currency derivatives		(34	)		54		Research and development
Foreign currency derivatives		(8	)		15		General and administrative
Foreign currency derivatives		2			30		Other, net
Total before taxes		(47	)		115
Tax amounts		5			(15	)
Income (loss) after tax	$	(42	)	$	100

Merger, Integration and Other Expenses

Merger, integration and other expenses reflect the expenses incurred in (i) DG's Merger with Extreme Reach and our Spin-Off from DG, (ii) acquiring or disposing of a business, (iii) integrating an acquired operation (e.g., office closure costs) into the Company and (iv) certain other items of income or expense not deemed to be part of our core operations. A summary of our merger, integration and other expenses is as follows (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
Description	2015			2014		2015			2014
Merger and Spin-Off (1)	$	—		$	581	$	—		$	4,738
Severance		142			357		466			558
Integration and restructuring costs		565			374		1,070			955
Acquisition, legal and due diligence fees		611			32		730			38
Recovery of TV business net assets (2)		(148	)		—		(262	)		—
Total	$	1,170		$	1,344	$	2,004		$	6,289

(1) - See discussion of Merger and Spin-Off under “Separation from Digital Generation, Inc.” in Note 1.

(2) - Represents a reduction in expense due to realizing more TV business net assets than originally estimated at the time of the Spin-Off.

Israel Operations

The majority of our research and development activities and a large portion of our accounting functions are performed in Herzliya, Israel. In total, about 26% of our workforce is located in Israel.  As a result, we are subject to risks associated with operating in the Middle East.

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Recently Issued Accounting Guidance

In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 modifies revenue recognition guidance for GAAP. Previous revenue recognition guidance in GAAP comprised broad revenue recognition concepts together with numerous revenue requirements for particular industries or transactions, which sometimes resulted in different accounting for economically similar transactions. In contrast, International Accounting Standards Board ("IASB") provided limited guidance on revenue recognition. Accordingly, the FASB and IASB initiated a joint project to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and International Financial Reporting Standards ("IFRS"). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:  

        Step 1: Identify the contract(s) with a customer.

        Step 2: Identify the performance obligations in the contract.

        Step 3: Determine the transaction price.

        Step 4: Allocate the transaction price to the performance obligations in the contract.

        Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

For Sizmek, the amendments in ASU 2014-09 are presently effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and early adoption is not permitted.  An entity shall adopt the amendments in ASU 2014-09 by either (i) retrospectively adjusting each prior reporting period presented or (ii) retrospectively adjusting for the cumulative effect of initially applying ASU 2014-09 at the date of initial adoption. We have not as yet determined (i) the extent to which we expect ASU 2014-09 will impact our reported revenues or (ii) the manner in which it will be adopted.

In July 2015, the FASB affirmed its proposal to defer the effective date of the guidance in ASU 2014-09 for all entities by one year. As a result, if the proposal is formally adopted by the issuance of a new ASU, the new revenue standard (currently discussed in ASU 2014-09) would be effective for Sizmek for annual reporting periods beginning after December 15, 2017.  The FASB also affirmed its proposal to permit all entities to early adopt the guidance in the new revenue standard, but not before annual periods beginning after December 15, 2016.

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3. Fair Value Measurements

ASC 820, Fair Value Measurement, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.

ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

· Level 1—Quoted prices in active markets for identical assets or liabilities.

· Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

· Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

We have classified our assets and liabilities that are measured at fair value on a recurring basis (at least annually) into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date.

The tables below set forth by level, assets and liabilities that were accounted for at fair value as of June 30, 2015 and December 31, 2014. The carrying values of our accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these financial instruments. The tables do not include cash on hand or assets and liabilities that are measured at historical cost or any basis other than fair value (in thousands).

		Fair Value Measurements at June 30, 2015
	Balance Sheet Location	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
Assets:
Money market funds	(a)	$	28,964	$	—	$	—	$	28,964
Currency forward derivatives / options	(b)		—		319		—		319
Revenue sharing arrangement	(c)		—		—		160		160
Marketable equity securities	(d)		1,362		—		—		1,362
Total		$	30,326	$	319	$	160	$	30,805

		Fair Value Measurements at December 31, 2014
	Balance Sheet Location	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
Assets:
Money market funds	(a)	$	35,953	$	—	$	—	$	35,953
Revenue sharing arrangement	(c)		—		—		160		160
Marketable equity securities	(d)		1,596		—		—		1,596
Total		$	37,549	$	—	$	160	$	37,709
Liabilities:
Currency forward derivatives / options	(e)	$	—	$	113	$	—	$	113

(a) Included in cash and cash equivalents.

(b) Included in other current assets.

(c) Included in current assets of TV business.

(d) Included in other non-current assets.

(e) Included in accrued liabilities.

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The fair value of our money market funds was determined based upon quoted market prices. The currency forward derivatives/options are derivative instruments whose value is based upon quoted market prices from various market participants. We have a zero cost basis in these derivative instruments. Our marketable equity securities relate to a single issuer and have a cost basis of $0.3 million.

In connection with our Spin-Off from DG, DG contributed a revenue sharing asset to us that resulted from DG's sale of its Springbox unit. We are entitled to a percentage of the revenues collected by the business for three years after the closing date (June 1, 2012). Revenue sharing payments are generally made once a year. We have estimated the future revenues of Springbox based on the historical revenues and certain other factors, discounted to their present value. The following table provides a reconciliation of changes in the fair values of our Level 3 assets (in thousands):

	Revenue Sharing Arrangement
	Six Months Ended June 30, 2015
Balance at beginning of year	$	160
Additions	—
Balance at end of period	$	160

In connection with an acquisition of a business, we sometimes include a contingent consideration component of the purchase price based on (i) future revenues or (ii) future revenues and operating results (e.g., adjusted EBITDA), that require minimum thresholds be met before any earnout payment becomes due. Accordingly, there can be significant volatility in the earnout liability. Each reporting period, we review our estimates of the performance indicators (e.g., revenue, adjusted EBITDA) and the corresponding earnout levels achieved, discounted to their present values. The change in fair value is recorded in cost of revenues in the accompanying statements of operations.

In connection with our acquisition of Republic Project, we agreed to make additional payments to the sellers if Republic's 2014 or 2015 revenues and adjusted EBITDA exceeded certain levels. As of June 30, 2015, we do not expect to make any payments with respect to the Republic Project contingent consideration arrangement.

Abakus Convertible Notes

In May 2014, we purchased $1.0 million of Abakus convertible promissory notes ("Convertible Notes") for $1.0 million. The Convertible Notes are due 90 days after written notice after the earlier of (i) May 30, 2016 or (ii) an occurrence of an Event of Default (as defined in the Convertible Notes). Abakus is a small private company that has developed a digital attribution software solution. The Convertible Notes bear interest at 5% per annum payable at maturity. The Convertible Notes are convertible into Abakus Series A Preferred Stock ("Series A Preferred") as follows:

a) Automatic conversion if Abakus sells $2.0 million of Series A Preferred ("Qualified Financing"), whereupon the Convertible Notes shall be converted, at Sizmek's option, at either (i) 75% of the share price in the Qualified Financing, or (ii) the quotient of $7.0 million divided by the number of shares outstanding upon exercise of all dilutive securities, or

b) Optional conversion at Sizmek's election if Abakus completes an Equity Financing (as defined in the Convertible Notes) that is not a Qualified Financing, whereupon the Convertible Notes shall be converted at 75% of the share price in the Equity Financing.

In addition, upon a Change in Control, as defined in the Convertible Notes, the Convertible Notes shall be paid off at the greater of (i) the outstanding balance, or (ii) the amount the holder would have received upon conversion of the Convertible Notes. The Convertible Notes are considered held-to-maturity securities and are carried at amortized cost. The fair value of the Convertible Notes is not readily determinable. We are not aware of a market for the Convertible Notes. The Convertible Notes are included in other non-current assets.

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4. Acquisitions

StrikeAd

On May 28, 2015, we acquired substantially all the assets and operations, and assumed certain liabilities, of privately-held StrikeAd, Inc. and its affiliates (collectively, “StrikeAd”) for $10.3 million. The purchase price includes $7.7 million in cash paid at closing and deferred payment obligations totaling $2.6 million.  StrikeAd operates a mobile demand side platform (“DSP”) based in the United Kingdom.  We intend to combine the StrikeAd assets with our existing programmatic assets to build an end-to-end DSP for use by our customers.

The objective of the transaction was to accelerate the development of our mobile technology in order to better serve the advertising community. We expect to realize operating synergies from this transaction.  StrikeAd has been included in our results of operations since the date of closing.

The $10.3 million purchase price was preliminarily allocated to the assets acquired and liabilities assumed based upon their estimated fair values. For estimation purposes, we preliminarily allocated $4.3 million to developed technology, $1.1 million to customer relationships and $11.1 million to goodwill.  The developed technology and customer relationships acquired in the transaction are presently being amortized on a straight-line basis over 3.2 years and 5.7 years, respectively.  The weighted average amortization period is 3.7 years. The goodwill and other intangible assets created in the acquisition are deductible for tax purposes.  The acquired assets include $3.7 million of gross receivables, which we recognized at their estimated fair value of $3.5 million.  For 2014, StrikeAd reported revenues of $11.0 million and a loss before income taxes of $6.2 million.  For the period from the acquisition date through June 30, 2015, StrikeAd reported $0.8 million of revenues.  The purchase price allocation is preliminary pending the completion of the valuation analysis.

Pixel

On September 4, 2014, we acquired all of the outstanding shares of Zestraco Investments Limited including its wholly-owned subsidiary PixelCo. D.O.O. (“Pixel”) for $0.45 million in cash and a deferred payment obligation of $0.05 million which was paid in December 2014.  Pixel performed advertising service operations principally for us prior to our purchase and had no appreciable assets.

The objective of the transaction was to bring in-house the group of technology service personnel that had been providing advertising operations service to us through a contract.  We expect to realize operating synergies from this transaction.  Pixel has been included in our results of operations since the date of closing. The $0.5 million purchase price was allocated to goodwill and is not deductible for income tax purposes.  The purchase price allocation is final.

Aerify Media

On August 11, 2014, we acquired substantially all the assets and operations of privately-held Aerify Media LLC (“Aerify”), a firm specializing in mobile tracking and retargeting, for $5.625 million in cash and a $0.625 million deferred payment obligation due in one-year.  Aerify’s mobile in-app and web tracking technology expands our capabilities in the fast-growing mobile segment, adding both talent and technology to the platform. 

The objective of the transaction was to accelerate the development of our mobile technology in order to better serve the advertising community. We expect to realize operating synergies from this transaction.  Aerify has been included in our results of operations since the date of closing.

The $6.25 million purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values. We allocated $2.05 million to developed technology, $0.4 million to customer relationships and $3.8 million to goodwill.  The developed technology and customer relationships acquired in the transaction are being amortized on a straight-line basis over 4 years and 5 years, respectively. The weighted average amortization period is 4.2 years. The goodwill and other intangible assets created in the acquisition are deductible for tax purposes.  For 2013, Aerify reported revenues of $3.1 million and a loss before income taxes of $0.6 million.  The purchase price allocation is final.

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Purchase Price Allocations

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the respective dates of acquisition for the above referenced transactions (in millions).

Category	StrikeAd (preliminary)			Pixel		Aerify
Cash	$	0.1		$	—	$	—
Receivables		3.5			—		—
Other current assets		0.1			—		—
Customer relationships		1.1			—		0.4
Developed technology		4.3			—		2.1
Goodwill		11.1			0.5		3.8
Total assets acquired		20.2			0.5		6.3
Less liabilities assumed		(9.9	)		—		—
Net assets acquired	$	10.3		$	0.5	$	6.3

Pro Forma Information

The following pro forma information presents our results of operations for the six months ended June 30, 2015 and 2014 as if the acquisitions of StrikeAd, Pixel and Aerify had occurred on January 1, 2014 (in thousands). A table of actual amounts is provided for reference.

	As Reported Six Months Ended June 30,						Unaudited Pro Forma Six Months Ended June 30,
	2015			2014			2015			2014
Revenue	$	76,975		$	82,380		$	80,528		$	88,792
Net loss		(15,842	)		(16,060	)		(18,161	)		(19,009	)

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5. Goodwill

We operate as a single reporting unit. Changes in the carrying value of our goodwill for the six months ended June 30, 2015 were as follows (in thousands):

	Goodwill		Accumulated Impairment Losses			Net Carrying Value
Balance at December 31, 2014	$	380,681	$	(340,527	)	$	40,154
Acquisition of StrikeAd		11,134		—			11,134
Balance at June 30, 2015	$	391,815	$	(340,527	)	$	51,288

We evaluate goodwill for possible impairment each year on December 31st and whenever events or changes in circumstances indicate the carrying value of our goodwill may not be recoverable. Generally, the goodwill impairment test involves a two-step process.  In the first step, we compare the fair value of the Company to its carrying value. If the fair value of the Company exceeds its carrying value, goodwill is not impaired and no further testing is required. If the fair value of the Company is less than its carrying value, we must perform the second step of the impairment test to measure the amount of the impairment loss. In the second step, the Company's fair value is allocated to its assets and liabilities, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the Company was being acquired in a business combination. If the implied fair value of the Company's goodwill is less than the carrying value, the difference is recorded as an impairment loss.

During the third quarter of 2014, we determined that indicators of potential impairment existed requiring us to perform an interim goodwill impairment test.  As a result, we performed an extensive analysis to estimate the fair value of the Company using a discounted cash flow methodology.  The analysis concluded that the implied fair value of the Company's goodwill was $98.2 million less than its carrying value, which we recorded as a goodwill impairment loss during the third quarter of 2014.

ASC 350-20-35 allows an entity to assess qualitatively whether it is necessary to perform step one of the prescribed two-step annual goodwill impairment test. If an entity believes, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, the two-step goodwill impairment test is not required.  Since we had performed an extensive analysis of the fair value of the Company as of September 30, 2014, at December 31, 2014, we performed a qualitative assessment of our goodwill and determined that the two-step process was not necessary.  Further, at June 30, 2015, we are not aware of any events or changes in circumstances that would indicate the carrying value of our goodwill may not be recoverable.

Risk of Future Impairment

At December 31, 2014, based on our discounted cash flow model that uses our internal forecast, we determined the fair value of the Company was only slightly in excess of its carrying value. In preparing our discounted cash flow model, we made assumptions about future revenues and expenses for several periods to determine the cash flows that would result.

As with any forecast, there is substantial risk our forecasted cash flows may fall short of our current expectations. If actual or expected future cash flows should fall sufficiently below our current forecast, it is likely we would be required to record another goodwill impairment charge. Future net cash flows are impacted by a variety of factors including revenues, operating margins, capital expenditures, income tax rates, and a discount rate.

Further, the market value of our common stock plus a reasonable control premium is an indicator of the fair value of our Company. If the market value of our common stock should fall sufficiently below the current level for an extended period of time, it would likely cause us to conclude that our goodwill is impaired and we would be required to record another goodwill impairment charge.

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6.  Share-based Compensation

Prior to our Spin-Off from DG on February 7, 2014, certain of our employees participated in DG’s equity based incentive programs.  Share-based compensation expense reflected in the accompanying financial statements up until February 7, 2014 relates to DG’s stock plan awards and not to our stock awards.  Immediately prior to completing the Spin-Off transaction, all outstanding equity awards became fully vested and were converted into shares of DG Common Stock to the extent the award had an intrinsic value. Equity awards with no intrinsic value were cancelled.  DG’s equity incentive plans were terminated in connection with the Merger Agreement (see Note 1).  Below is a summary of our share-based compensation expense related to the stock awards (in thousands):

	Six Months Ended June 30,
Description	2015		2014
DG stock options and RSUs awarded to our employees	$	—	$	2,650
DG share-based awards allocated to us as part of corporate services		—		3,817
Sizmek share-based awards granted		1,903		1,066
Total	$	1,903	$	7,533

In the first quarter of 2015, Sizmek’s Compensation Committee granted (i) 159,245 performance-based restricted stock units (“RSUs”), (ii) 192,867 time-based RSUs and (iii) 133,600 time-based stock options, to certain of our employees and directors.  The RSUs and stock options expected to vest were valued at $2.8 million and $0.6 million, respectively.  The awards (i) vest over periods ranging from one to three years, (ii) are subject to the employees’ continued employment with us or the director’s continued service on our Board of Directors, and (iii) with respect to the performance-based RSUs, are subject to reaching certain (a) revenue, (b) adjusted EBITDA and (c) free cash flow growth targets (i.e., performance conditions).

In the second quarter of 2015, Sizmek’s Compensation Committee granted (i) 87,251 performance-based RSUs, (ii) 361,112 time-based RSUs and (iii) 86,175 time-based stock options to certain of our employees.  The RSUs and stock options expected to vest were valued at $3.4 million and $0.4 million, respectively.  The awards (i) vest over periods ranging from one to three years, (ii) are subject to the employees’ continued employment with us, and (iii) with respect to the performance-based RSUs, are subject to reaching certain (a) revenue, (b) adjusted EBITDA and (c) free cash flow growth targets (i.e., performance conditions).

Generally, the awards granted in 2015 vest on an accelerated basis upon the occurrence of the holder’s (a) death, (b) termination by reason of disability, (c) termination without Cause (as defined) following a Change of Control (as defined) or (d) resignation for Good Reason (as defined) following a Change in Control.  Unrecognized compensation costs related to unvested RSUs and stock options were $7.7 million at June 30, 2015.

7.  Income Taxes

For the six months ended June 30, 2015, our effective tax rate was (3.9)% compared to 4.9% for the six months ended June 30, 2014.  The effective tax rates for each period differ from the expected federal statutory rate of 35.0% as a result of state and foreign income taxes; certain non-deductible expenses; and changes in our valuation allowances in the U.S. and state jurisdictions within the U.S.  In the U.S. and state jurisdictions within the U.S., we have historically experienced tax losses.  As a result, we do not recognize a tax benefit in the U.S. or state jurisdictions within the U.S. when we incur taxable losses as realization of those tax benefits is not likely.  Conversely, in certain foreign jurisdictions we report taxable income and pay tax on that income in accordance with the tax statutes of those jurisdictions.

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We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than not sustain the position following an audit.  For tax positions meeting the more-likely-than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.  During the six months ended June 30, 2015, there were no additional uncertain tax positions. Interest and penalties related to uncertain tax positions are recognized in income tax expense.  For each of the six month periods ended June 30, 2015 and 2014, we recognized less than $0.1 million of interest or penalties related to uncertain tax positions in our financial statements. The changes in uncertain tax positions for the six months ended June 30, 2015 and 2014 were as follows (in thousands):

	Six Months Ended June 30,
	2015		2014
Balance at beginning of year	$	1,507	$	1,701
Additions for tax positions related to prior years		39		—
Balance at end of period	$	1,546	$	1,701

If we reduced our reserve for uncertain tax positions, it would result in our recognition of a tax benefit.

As of June 30, 2015, we provided a valuation allowance against substantially all of our U.S. and state NOL carryforwards as ultimate realization of these NOLs was not determined to be more-likely-than not.  Accordingly, we have NOL carryforwards available to us (should we have sufficient future taxable income to utilize them) that are not reflected in our consolidated balance sheets at June 30, 2015 and December 31, 2014.

We are subject to U.S. federal income tax, income tax from multiple foreign jurisdictions including Israel and the United Kingdom, and income taxes of multiple state jurisdictions. U.S. federal, state and local income tax returns for 2011 through February 7, 2014 remain open to examination. Israeli and United Kingdom income tax returns remain open to examination for 2010 through 2014 and 2009 through 2014, respectively. Prior to our Spin-Off, our operating results had been included in DG's U.S. federal and state tax returns or tax returns of non-U.S. jurisdictions. Subsequent to our Spin-Off, we file stand-alone income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various foreign jurisdictions. Prior to our Spin-Off, we entered into a tax matters agreement with DG that governs the parties' respective rights, responsibilities and obligations with respect to taxes. The tax matters agreement generally provides that the filing of tax returns, the control of audit proceedings, and the payment of any additional tax liability relative to DG and its consolidated subsidiaries for periods prior to February 8, 2014 is our responsibility.

We do not provide deferred taxes on the undistributed earnings of our non-U.S. subsidiaries in situations where our intention is to reinvest such earnings indefinitely. Furthermore, we believe both our U.S. and non-U.S. subsidiaries have significant net assets, liquidity, and other financial resources available to meet their operational and capital investment requirements.

8.  Loss per Share

Basic earnings (loss) per common share excludes dilution and is calculated by dividing net earnings (loss) by the weighted-average number of common shares outstanding during the period.  Diluted earnings (loss) per common share is calculated by dividing net earnings (loss) by the weighted-average number of common shares outstanding during the period, as adjusted for the potential dilutive effect of non-participating share-based awards such as stock options and RSUs.

On February 7, 2014, 30.4 million shares of our common stock were distributed to DG stockholders in conjunction with the Spin-Off.  For comparative purposes, and to provide a more meaningful calculation of the weighted-average shares outstanding, we have assumed this amount to be outstanding for any period presented prior to the Spin-Off in the calculation of weighted-average shares outstanding.

The following table presents our loss per common share for the three and six months ended June 30, 2015 and 2014 (in thousands, except per share data):

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Net loss	$	(7,897	)	$	(1,642	)	$	(15,842	)	$	(16,060	)
Weighted average common shares outstanding — basic		29,549			30,399			29,666			30,399
Dilutive securities		—			—			—			—
Weighted average common shares outstanding - diluted		29,549			30,399			29,666			30,399
Basic and diluted loss per common share	$	(0.27	)	$	(0.05	)	$	(0.53	)	$	(0.53	)
Antidilutive securities not included:
Stock options and RSUs		1,268			864			1,266			503

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9.  Geographical Information and Product Categories

We have one operating segment. Our chief operating decision maker is considered to be our Chief Executive Officer. The chief operating decision maker allocates resources and assesses performance of the business and other activities at the operating segment level.

The following table summarizes our revenues by geographic area (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Revenues:
United States	$	20,975	$	19,779	$	40,575	$	38,541
Europe, Middle East and Africa		11,821		14,647		21,171		25,627
Asia Pacific		5,177		6,339		11,071		12,412
Latin America		1,398		2,203		2,749		3,716
North America (excluding U.S.)		845		1,033		1,409		2,084
Total	$	40,216	$	44,001	$	76,975	$	82,380

For the six months ended June 30, 2015, about 47% of our revenues were attributable to foreign jurisdictions. However, no one country other than the United States represented more than 10% of our consolidated revenues.

The following table summarizes our revenues by product category (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Revenues:
Core products	$	28,160	$	27,685	$	53,424	$	51,089
Rich media		7,485		11,755		15,113		23,177
Programmatic managed services		4,571		4,561		8,438		8,114
Total	$	40,216	$	44,001	$	76,975	$	82,380

The following table summarizes our long-lived assets by country (in thousands):

	June 30, 2015		December 31, 2014
Long-Lived Assets:
Israel	$	29,403	$	24,818
United States		7,717		7,181
Other countries		1,951		2,037
Total	$	39,071	$	34,036

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10.  Related Party Transactions

Prior to the Spin-Off, DG provided certain management and administrative services to us. These services included, among others, accounting, treasury, audit, tax, legal, executive oversight, human resources, real estate, information technology and risk management. These expenses have been allocated to us on a basis of direct usage when identifiable, with the remainder allocated on the basis of revenue, headcount, or other measures.  DG also allocated to us (i) merger, integration and other expenses and (ii) share-based compensation, largely based on revenues. DG's allocation of these expenses to us was as follows (in thousands):

DG’s Expense Allocation to Sizmek	Six Months Ended June 30, 2014
Management and administrative services	$	637
Merger, integration and other	4,038
Share-based compensation	3,817
Total	$	8,492

Included in the above allocations are costs of DG's employee benefit plans and other employee incentives. Employee benefits and incentives include 401(k) matching contributions, participation in DG's long-term incentive compensation award plans and healthcare plans. The employee benefit and incentive costs are reflected in the statements of operations and are classified consistently with how the underlying employee's salary and other compensation costs have been recorded.

We consider the allocated cost for corporate services, employee benefits and incentives to be reasonable based on our utilization of such services. However, we believe the allocated cost for these services are different from the cost we would have incurred if we had been an independent publicly-traded company during those periods.

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Item 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion and analysis of financial condition and results of operations (“MD&A”) should be read in conjunction with our unaudited consolidated and combined financial statements and notes thereto contained elsewhere in this Quarterly Report on Form 10-Q (“Report”).

The following discussion contains forward-looking statements.  The matters discussed in these forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements.  Factors that could cause or contribute to these differences include those discussed elsewhere in this Form 10-Q, particularly in “Cautionary Note Regarding Forward-Looking Statements.” 

Critical Accounting Policies and Estimates

The following discussion and analysis of the financial condition and results of operations are based on the unaudited consolidated and combined financial statements and notes to unaudited consolidated and combined financial statements contained in this Report that have been prepared in accordance with the rules and regulations of the SEC and do not include all the disclosures normally required in annual financial statements prepared in accordance with GAAP.  The preparation of these financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities.  We base these estimates on historical results and various other assumptions believed to be reasonable, all of which form the basis for making estimates concerning the carrying values of our assets and liabilities that are not readily available from other sources.  Actual results may differ from these estimates.

Our significant accounting policies are described in Note 2 to the consolidated and combined financial statements presented in our Annual Report on Form 10-K for the year ended December 31, 2014 (“Annual Report”).  Our critical accounting policies are described in MD&A in our Annual Report.  Our significant and critical accounting policies have not changed significantly since the filing of our Annual Report. 

See Note 5 of our unaudited consolidated and combined financial statements regarding the risk of a future impairment of our goodwill.

Overview

We operate a leading open ad management and distribution platform. We assist approximately 17,000 advertisers and 3,500 agencies engage with consumers in approximately 60 countries across multiple online media channels (mobile, display, rich media, video and social). Our revenues are principally derived from services related to online advertising. Our technology and service help advertisers overcome the fragmentation in the online advertising market and achieve optimal results from their advertising campaigns.

Our business can be impacted by several factors, including general economic conditions, the overall advertising market, new emerging digital technologies, and the continued growth of online and other alternative advertising.

Our Business Strategy

Our goal is to operate the leading independent ad management platform worldwide, and become the platform of choice among advertisers, agencies and publishers. We are in the process of completing the development of a single, integrated ad management platform across multiple channels and formats that we anticipate making available to our customers by the end of 2015.  In order to achieve our objective, we need to:

(i) continue to expand the products available on our platform,

(ii) expand our partnership program by inviting developers with the latest technology and features to partner with us and implement their technology onto our platform, and

(iii) control our costs.

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In 2015, we are focusing on four key growth areas:

(i) Programmatic Analytics—we believe our Peer 39 unit is the largest provider of data for ad buying (and selling) decisions by customers’ world-wide. Our solutions provide page and event based data enabling advertisers to access safer, appropriate and relevant web page environments for their ads.

(ii) Mobile—with our recent acquisition of Aerify, we now have a robust mobile offering across the mobile web and in-app technology.

(iii) Video—our roots and heritage, video is an area of the market also experiencing heavy growth, and is the vehicle of choice for branding advertisers as they move to digital and programmatic managed services.

(iv) Data—we intend to enable our clients to centralize, manage and activate their data and leverage deeper data sets within our Sizmek MDX platform for dynamic, creative targeting and frequency capping.

Completion of Merger and Spin-Off

Prior to February 7, 2014, we operated as the online segment of DG. On February 7, 2014 the Merger between DG, Extreme Reach and Acquisition Sub was completed. Immediately prior to the Merger, DG contributed its cash and most of its other working capital to us, and the shares of our common stock were distributed to DG's shareholders (the "Spin-Off") resulting in Sizmek becoming a new publicly-held company with its shares traded on the NASDAQ Global Select Market under the symbol SZMK. See Notes 1 and 10 of our consolidated and combined financial statements contained elsewhere herein.

Comparability of Operating Results before and after the Spin-Off

Prior to the Spin-Off, our combined financial statements were derived from the consolidated financial statements and accounting records of DG, which includes an allocation of DG's corporate costs. To a degree, prior to the Spin-Off we benefited from sharing the corporate cost structure of DG rather than incurring such costs ourselves on a stand-alone basis. Since the Spin-Off, we have been able to control our corporate overhead expenses to a level reasonably consistent with the pre Spin-Off periods. However, our operating results before and after the Spin-Off are not entirely comparable.  In particular, operating results for the six months ended June 30, 2014 include (i) costs associated with accelerating the vesting of share-based payment awards in connection with consummating the Merger and Spin-Off ($6.3 million) and (ii) transaction related costs incurred in connection with completing the Merger and Spin-Off transactions ($4.7 million).

Acquisitions

We have a history of acquisitions.  In August 2014, September 2014 and May 2015, we acquired Aerify Media, Pixel and StrikeAd, respectively.  As a result of these acquisitions, our operating results from period to period are not entirely comparable.  Each of the acquisitions has been included in our results of operations since their respective dates of closing.

Seasonality

Our business is seasonal. Revenues tend to be the highest in the fourth quarter as a large portion of our revenues follow the advertising spend or budgets of our customers which tend to be at their highest during the holiday season.

Second Quarter 2015 Highlights

· Revenues declined $3.8 million, or 9%, compared to the same quarter of 2014.  Our rich media revenues continued to decline falling $4.3 million, or 36%, partially offset by a $0.5 million increase, or 2%, in our core products revenue.

· In the second quarter of 2015, foreign currency exchange rates generally weakened compared with the U.S. Dollar, when compared to the second quarter of 2014.  This resulted in us reporting lower revenues ($2.8 million) and lower operating expenses ($2.3 million) than if the exchange rates were held constant with those in effect in the second quarter of 2014.

· Loss from operations increased $5.2 million in the second quarter of 2015 as compared to the same period of 2014.  The increase in loss was due to lower revenues ($3.8 million) and higher operating expenses ($1.4 million).  The increase in operating expenses was largely due to higher depreciation and amortization ($1.3 million) and selling and marketing expense ($0.9 million), partially offset by lower cost of revenues ($0.8 million).  As a result of our operating performance being lower than expected, we reduced certain performance based compensation that we accrue during the year based upon our assumption of achieving performance based goals by year-end.

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Results of Operations

Three Months Ended June 30, 2015 vs. Three Months Ended June 30, 2014

The following table sets forth certain historical financial data (dollars in thousands):

							% Change			As a % of Total Revenues
	Three Months Ended						2015			Three Months Ended
	June 30,						vs.			June 30,
	2015			2014			2014			2015			2014
Revenues:
Platform	$	35,645		$	39,440			(10	)%		88.6	%		89.6	%
Programmatic		4,571			4,561			—			11.4			10.4
Total		40,216			44,001			(9	)		100.0			100.0
Costs and expenses:
Cost of revenues:
Platform (a)		11,175			12,126			(8	)		27.8			27.6
Programmatic (a)		3,317			3,142			6			8.2			7.1
Total		14,492			15,268			(5	)		36.0			34.7
Selling and marketing		15,433			14,514			6			38.5			33.0
Research and development		3,674			3,193			15			9.1			7.3
General and administrative		4,739			5,083			(7	)		11.8			11.5
Merger, integration and other		1,170			1,344			(13	)		2.9			3.0
Depreciation and amortization		7,771			6,449			20			19.3			14.7
Total costs and expenses		47,279			45,851			3			117.6			104.2
Loss from operations		(7,063	)		(1,850	)		282			(17.6	)		(4.2	)
Other expense, net		366			205			79			0.9			0.5
Loss before income taxes		(7,429	)		(2,055	)		262			(18.5	)		(4.7	)
Provision (benefit) for income taxes		468			(413	)		(213	)		1.2			(1.0	)
Net loss	$	(7,897	)	$	(1,642	)		381			(19.7	)		(3.7	)

(a)     Excludes depreciation and amortization.

Revenues – Platform.    For the three months ended June 30, 2015, platform revenues decreased $3.8 million, or 10%, as compared to the same period in the prior year.  The decrease was due to a decline in our rich media services revenue ($4.3 million), partially offset by growth in our core products revenue ($0.5 million).  Our rich media services revenue declined due to a reduction in the number of impressions served and a decrease in the average selling price per impression served.  Our core products revenue grew primarily due to greater usage of our mobile services and our smart versioning optimization product, partially offset by slight declines in other services.

Revenues – Programmatic.    For the three months ended June 30, 2015, programmatic managed services revenues were essentially unchanged as compared to the same period in the prior year.  A decrease in our trading revenues ($1.2 million) was offset by revenues from our acquisitions of Aerify Media (August 2014) and StrikeAd (May 2015).

Revenues – Foreign Currency Impact.  For the three months ended June 30, 2015, foreign currency exchange rates compared to the U.S. Dollar were generally weaker than they were during the three months ended June 30, 2014.  This resulted in us reporting revenues $2.8 million lower than if the exchange rates were held constant with those in effect in the second quarter of 2014.

Cost of Revenues – Platform.    For the three months ended June 30, 2015, platform cost of revenues decreased $1.0 million, or 8%, as compared to the same period in the prior year. As a percentage of total revenues, platform cost of revenues increased to 27.8% in the second quarter of 2015, as compared to 27.6% in the second quarter of 2014.  Platform cost of revenues decreased primarily due to a reduction in compensation costs ($0.8 million) and professional fees ($0.3 million), partially offset by an increase in delivery costs ($0.4 million).  In the second quarter of 2015, compensation costs were reduced due to lower average compensation levels per employee.  In the second quarter of 2015, delivery costs increased due to the larger file sizes we now deliver.

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Cost of Revenues – Programmatic.    For the three months ended June 30, 2015, programmatic cost of revenues increased $0.2 million, or 6%, as compared to the same period in the prior year.  The increase was due to a reduction in the average gross margin we accept in our programmatic managed services business.

Selling and Marketing.    For the three months ended June 30, 2015, selling and marketing expense increased $0.9 million, or 6%, as compared to the same period in the prior year.  The increase relates to higher compensation costs ($1.3 million), partially offset by a reduction in professional fees ($0.2 million) and reseller costs ($0.1 million).  In 2015, we added to our sales staff to better serve our customer base.  Professional fees declined due to using more employees and less consultants to service our customers.  Reseller costs involve paying a commission or fee to the party responsible for causing the customer to use our platform in their online advertising.  In the second quarter of 2015, our reseller costs declined due to lower average fees paid to resellers and lower revenues generated by resellers.  As a percentage of revenues, selling and marketing expense increased to 38.5% in the second quarter of 2015 as compared to 33.0% in the second quarter of 2014, due to an increase in selling and marketing spending and a 9% decline in our overall revenues as compared to the year-earlier quarter.

Research and Development.    For the three months ended June 30, 2015, research and development expense increased $0.5 million, or 15%, as compared to the same period in the prior year.  The increase was due to higher cloud computing costs.

General and Administrative.    For the three months ended June 30, 2015, general and administrative expense decreased $0.3 million, or 7%, as compared to the same period in the prior year.  The decrease was attributable to a reduction in the average salary, bonus and share-based compensation per general and administrative employee.  As a percentage of revenues, general and administrative expense increased to 11.8% in 2015, as compared to 11.5% in 2014.  

Merger, Integration and Other.    For the three months ended June 30, 2015, merger, integration and other costs decreased $0.2 million, or 13%, as compared to the same period in the prior year. The decrease principally relates to a reduction in (i) Merger and Spin-Off costs and (ii) severance costs in connection with completing our Spin-Off from DG in February 2014, partially offset by an increase in acquisition related costs in connection with our purchase of StrikeAd in May 2015, and pursuing other corporate transactions.

Depreciation and Amortization.    For the three months ended June 30, 2015, depreciation and amortization increased $1.3 million, or 20%, as compared to the same period in the prior year. The increase was attributable to greater depreciation of capitalized software ($1.5 million), partially offset by lower depreciation of other property and equipment ($0.1 million).  The increase in depreciation of capitalized software relates to (i) shortening the estimated remaining useful life of our Sizmek MDX platform from 46 months to 20 months effective November 1, 2014 in anticipation of retiring the MDX platform in June 2016 ($0.9 million) and (ii) an increase in capitalized software, which is attributable to working on more software development projects that qualify for capitalization.  See Use of Estimates in Note 2 to our consolidated and combined financial statements.

Other expense, net.    For the three months ended June 30, 2015, other expense, net was $0.4 million as compared to $0.2 million for the same period in 2014.  The 2015 expense primarily relates to foreign exchange losses, which resulted from the strengthening of the U.S. dollar in comparison with other currencies in which we conduct business.

Provision (Benefit) for Income Taxes.    For the three months ended June 30, 2015, our effective tax rate was (6.3)% compared to 20.1% for the same period in 2014. The effective tax rate for each period differs from the expected federal statutory rate of 35% as a result of non-deductible expenses, a change in our valuation allowance and state and foreign income taxes. Presently, our operations in the U.S. are in a net operating loss position and we have not recognized a tax benefit for those losses as realization of the tax benefit has not been determined to be likely.  

Effect of Foreign Currency Exchange Rates.   For the three months ended June 30, 2015, foreign currency exchange rates had weakened against the U.S. Dollar when compared to the same period in 2014.  As a result, we reported lower revenues ($2.8 million), lower operating expenses ($2.3 million), and a larger operating loss ($0.5 million) than if the exchange rates were held constant during both periods.

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Six Months Ended June 30, 2015 vs. Six Months Ended June 30, 2014

The following table sets forth certain historical financial data (dollars in thousands):

							% Change			As a % of Total Revenues
	Six Months Ended						2015			Six Months Ended
	June 30,						vs.			June 30,
	2015			2014			2014			2015			2014
Revenues
Platform	$	68,537		$	74,266			(8	)%		89.0	%		90.2	%
Programmatic		8,438			8,114			4			11.0			9.8
Total		76,975			82,380			(7	)		100.0			100.0
Costs and expenses:
Cost of revenues:
Platform (a)		22,010			24,031			(8	)		28.6			29.2
Programmatic (a)		6,142			5,723			7			8.0			6.9
Total		28,152			29,754			(5	)		36.6			36.1
Selling and marketing		29,636			30,102			(2	)		38.5			36.5
Research and development		6,577			6,741			(2	)		8.5			8.2
General and administrative		9,293			13,188			(30	)		12.1			16.0
Merger, integration and other		2,004			6,289			(68	)		2.6			7.6
Depreciation and amortization		15,210			12,977			17			19.8			15.8
Total costs and expenses		90,872			99,051			(8	)		118.1			120.2
Loss from operations		(13,897	)		(16,671	)		(17	)		(18.1	)		(20.2	)
Other expense, net		1,345			208		NM				1.7			0.3
Loss before income taxes		(15,242	)		(16,879	)		(10	)		(19.8	)		(20.5	)
Provision (benefit) for income taxes		600			(819	)		(173	)		0.8			(1.0	)
Net loss	$	(15,842	)	$	(16,060	)		(1	)		(20.6	)		(19.5	)

(a)     Excludes depreciation and amortization.

NMNot meaningful.

Revenues – Platform.    For the six months ended June 30, 2015, revenues decreased $5.7 million, or 8%, as compared to the same period in the prior year.  The decrease was due to a decline in our rich media services revenue ($8.0 million), partially offset by growth in our core products revenue ($2.3 million).  Our rich media services revenue declined due to a reduction in the number of impressions served and a decrease in the average selling price per impression served.  Our core products revenue grew primarily due to greater usage of our mobile services and our analytics capabilities, partially offset by slight declines in other services.

Revenues – Programmatic.    For the six months ended June 30, 2015, programmatic managed services revenues increased $0.3 million, or 4%, as compared to the same period in the prior year.  Revenues from our acquisitions of Aerify Media (August 2014) and StrikeAd (May 2015) of $1.8 million were partially offset by a decrease in our trading revenues ($1.5 million).

Revenues – Foreign Currency Impact.  For the six months ended June 30, 2015, foreign currency exchange rates compared to the U.S. Dollar were generally weaker than they were during the six months ended June 30, 2014.  This resulted in us reporting revenues $5.0 million lower than if the exchange rates were held constant with those in effect in the first six months of 2014.

Cost of Revenues – Platform.    For the six months ended June 30, 2015, platform cost of revenues decreased $2.0 million, or 8%, as compared to the same period in the prior year. As a percentage of total revenues, platform cost of revenues decreased to 28.6% in the first half of 2015, as compared to 29.2% in the same 2014 period.  Platform cost of revenues decreased primarily due to a reduction in compensation costs ($2.5 million) and professional fees ($0.6 million), partially offset by increases in delivery costs ($1.0 million).  In 2015, compensation costs were reduced due to lower average compensation levels per employee.  In addition, our share-based compensation expense was higher in the 2014 period due to the accelerated vesting of all outstanding share-based payment awards in connection with the completion of the Merger and Spin-Off in February 2014.  Professional fees decreased due primarily to lower consulting costs.  In 2015, delivery costs increased due to higher data center costs which increased partially as a result of the larger file sizes we now deliver.  

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Cost of Revenues – Programmatic.    For the six months ended June 30, 2015, programmatic cost of revenues increased $0.4 million, or 7%, as compared to the same period in the prior year.  The increase was due to a reduction in the average gross margin we accept in our programmatic managed services business.

Selling and Marketing.    For the six months ended June 30, 2015, selling and marketing expense decreased $0.5 million, or 2%, as compared to the same period in the prior year.  The decrease relates to a reduction in reseller costs ($0.5 million) and professional fees ($0.3 million), partially offset by an increase in compensation costs ($0.2 million).  In the first half of 2015, our reseller costs declined due to lower average fees paid to resellers and lower revenues generated by resellers.  Professional fees declined due to lower legal and consulting fees.  Compensation costs increased due to hiring more sales and marketing personnel to serve our customers.  As a percentage of revenues, selling and marketing expense increased to 38.5% in the six months ended June 30, 2015 as compared to 36.5% in the same 2014 period.  

Research and Development.    For the six months ended June 30, 2015, research and development expense decreased $0.2 million, or 2%, as compared to the same period in the prior year.  The decrease was due to lower compensation costs ($0.7 million), partially offset by an increase in cloud computing costs ($0.5 million).  Compensation costs decreased due to higher capitalized wages.  The increase in capitalized wages was due to working more hours on software development projects that qualified for capitalization.

General and Administrative.    For the six months ended June 30, 2015, general and administrative expense decreased $3.9 million, or 30%, as compared to the same period in the prior year.  As a percentage of revenues, general and administrative expense decreased to 12.1% in the first half of 2015, as compared to 16.0% in the same 2014 period.  The decrease was attributable to recognizing a smaller amount of share-based compensation.  In the six months ended June 30, 2014, we recognized $4.1 million of share-based compensation as a result of the accelerated vesting of share-based payment awards in connection with the completion of the Merger and Spin-Off.   

Merger, Integration and Other.    For the six months ended June 30, 2015, merger, integration and other costs decreased $4.3 million, or 68%, as compared to the same period in the prior year. The decrease principally relates to a reduction in (i) Merger and Spin-Off costs and (ii) severance costs in connection with completing our Spin-Off from DG in February 2014, partially offset by an increase in acquisition related costs in connection with our purchase of StrikeAd in May 2015 and pursuing other corporate transactions.

Depreciation and Amortization.    For the six months ended June 30, 2015, depreciation and amortization increased $2.2 million, or 17%, as compared to the same period in the prior year. The increase was attributable to greater depreciation of capitalized software ($2.8 million), partially offset by lower depreciation of other property and equipment ($0.4 million) and lower amortization of intangible assets ($0.1 million).  The increase in depreciation of capitalized software for the six months ended June 30, 2015 relates to (i) shortening the estimated remaining useful life of our Sizmek MDX platform from 46 months to 20 months effective November 1, 2014 in anticipation of retiring the MDX platform in June 2016 ($1.7 million) and (ii) an increase in capitalized software, which is attributable to working on more software development projects that qualify for capitalization.  See Use of Estimates in Note 2 to our consolidated and combined financial statements.  The reduction in property and equipment depreciation in the first half of 2015 was due to certain assets becoming fully depreciated.

Other expense, net.    For the six months ended June 30, 2015, other expense, net was $1.3 million as compared to $0.2 million for the same period in 2014.  The increase in expense ($1.1 million) relates to increases in foreign exchange losses, which resulted from the U.S. dollar strengthening in comparison with other currencies in which we conduct our business.

Provision (Benefit) for Income Taxes.    For the six months ended June 30, 2015, our effective tax rate was (3.9)% compared to 4.9% for the same period in 2014. The effective tax rate for each period differs from the expected federal statutory rate of 35% as a result of non-deductible expenses, a change in our valuation allowance and state and foreign income taxes. Presently, our operations in the U.S. are in a net operating loss position and we have not recognized a tax benefit for those losses as realization of the tax benefit has not been determined to be likely.  

Effect of Foreign Currency Exchange Rates.   For the six months ended June 30, 2015, foreign currency exchange rates had weakened against the U.S. Dollar when compared to the same period in 2014.  As a result, we reported lower revenues ($5.0 million), lower operating expenses ($4.4 million), and a larger operating loss ($0.6 million) than if the exchange rates were held constant during both periods.

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Financial Condition

The following table sets forth certain major balance sheet accounts as of June 30, 2015 and December 31, 2014 (in thousands):

	June 30, 2015		December 31, 2014
Assets:
Cash and cash equivalents	$	66,932	$	90,672
Accounts receivable, net		48,471		51,125
Assets of TV business		1,270		2,470
Property and equipment, net		39,071		34,036
Goodwill		51,288		40,154
Intangible assets, net		68,894		71,306
Liabilities:
Accounts payable and accrued liabilities		29,914		23,147
Deferred income taxes		7,645		8,242
Stockholders’ equity		247,743		266,435

Cash and cash equivalents fluctuate with changes in operating, investing and financing activities. In particular, cash and cash equivalents fluctuate with (i) operating results, (ii) the timing of payments, (iii) capital expenditures, (iv) acquisition and investment activity, and (v) capital activity, including the purchase and sale of our common stock. The decrease in cash and cash equivalents during 2015 primarily relates to (i) our investment in capital assets ($11.5 million), (ii) our purchase of StrikeAd ($7.5 million) and (iii) our purchases of treasury stock ($4.5 million).  

Accounts receivable generally fluctuate with revenues. As revenues increase or decrease, accounts receivable tend to increase or decrease, correspondingly. The number of days of revenue included in accounts receivable was 110 days and 96 days at June 30, 2015 and December 31, 2014, respectively.

Assets of TV business relate to assets contributed by DG immediately prior to the Spin-Off. The majority of these assets consists of income tax receivables.

Property and equipment tends to increase when we make significant improvements to our equipment or properties, expand our platform or capitalize software development initiatives. It also can increase as a result of acquisition activity. Further, the balance of property and equipment is decreased by recording depreciation expense. For the six months ended June 30, 2015 and 2014, purchases of property and equipment used to support our ad serving platform were $3.1 million and $2.3 million, respectively.  For the six months ended June 30, 2015 and2014, capitalized costs of developing software were $8.4 million and $5.6 million, respectively.

Intangible assets decreased during the six months ended June 30, 2015 as a result of amortization, partially offset by intangible assets acquired in our purchase of StrikeAd.

Accounts payable and accrued liabilities increased $6.8 million to $29.9 million at June 30, 2015 as compared to $23.1 million at December 31, 2014.  The increase relates to the liabilities assumed in the purchase of StrikeAd and the portion of the purchase price that was deferred ($2.6 million).

Stockholders' equity decreased by $18.7 million to $247.7 million at June 30, 2015 compared to $266.4 million at December 31, 2014, principally as a result of reporting a $15.8 million net loss and our $4.5 million of purchases of treasury stock.

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Liquidity and Capital Resources

The following table sets forth a summary of our statements of cash flows (in thousands):

	Six Months Ended June 30,
	2015			2014
Operating activities:
Net loss	$	(15,842	)	$	(16,060	)
Depreciation and amortization		15,210			12,977
Share-based compensation and other		1,221			6,325
Changes in operating assets and liabilities, net		(920	)		(1,076	)
Total		(331	)		2,166
Investing activities:
Purchases of property and equipment		(3,131	)		(2,310	)
Capitalized costs of developing software		(8,370	)		(5,639	)
Acquisition, net of cash acquired		(7,541	)		—
Other		(433	)		(1,751	)
Total		(19,475	)		(9,700	)
Financing activities:
Purchases of treasury stock		(4,500	)		—
Payments of TV business liabilities		(126	)		(9,346	)
Proceeds from TV business assets		1,200			43,013
Other		(169	)		—
Net contributions from Parent		—			44,833
Total		(3,595	)		78,500
Effect of exchange rate changes on cash and cash equivalents		(339	)		32
Net (decrease) increase in cash and cash equivalents	$	(23,740	)	$	70,998

We generate cash from operating activities principally from net loss adjusted for certain non-cash expenses such as (i) depreciation and amortization and (ii) share-based compensation.  In the first six months of 2015, we used $0.3 million of cash in operating activities, as compared to generating $2.2 million in cash from operating activities in the first six months of 2014.  In the first six months of 2015, the reduction in cash generated from operating activities ($2.5 million), as compared to the first six months of 2014, was primarily due to a decline in aggregate non-cash operating expenses (depreciation and amortization and share-based compensation) of $3.4 million, while the net loss for both periods remained relatively unchanged.

Historically, we have invested our cash in (i) property and equipment, (ii) the development of software, (iii) strategic investments and (iv) the acquisition of complementary businesses.

In the first six months of 2014, we obtained cash from financing activities as a result of capital contributions from DG, our former parent, and liquidating the net TV assets contributed by DG.  In the first six months of 2015, we used cash in financing activities as a result of our purchases of our common stock, and used cash in investing activities with our purchase of StrikeAd ($7.5 million).

Sources of Liquidity

Our sources of liquidity include:

· cash and cash equivalents on hand (including $8.9 million held outside the United States at June 30, 2015, all of which can be repatriated into the United States with little or no adverse tax consequences);

· cash generated from operating activities;

30

· borrowings from a credit facility we may enter into; and

· the issuance of equity securities.

We believe our sources of liquidity, including (i) cash and cash equivalents on hand and (ii) cash generated from operating activities, will satisfy our capital needs for the next twelve months.

Cash Requirements

We routinely evaluate our liquidity requirements, including alternative sources and uses of cash.  As a result of this process:

     we expect to use cash in connection with:

· the purchase of capital assets (including the development of capitalized software projects);

· the organic growth of our business; and

     we could use cash in connection with:

· the strategic acquisition of related businesses, with cash requirements varying depending on if our common stock is used to fund all or part of any acquisition; and

· purchases of our common stock.

In August 2014, our Board of Directors approved a $15 million share repurchase program. In March 2015, our Board of Directors increased the share repurchase program to $30 million. The program allows us to repurchase shares of our common stock through open market purchases, privately negotiated transactions or otherwise, subject to certain conditions. The share repurchase program does not have an expiration date. Since implementation of our share repurchase program through June 30, 2015, we made share repurchases totaling $6.5 million. Depending on market conditions and other factors, these repurchases may be commenced or suspended from time to time without notice. We have no obligation to repurchase shares under the share repurchase program.

During 2015, we expect we will purchase property and equipment and incur capitalized software development costs of approximately $22 million to $24 million, a portion of which will be used toward completion of our new ad serving platform. We expect to use cash to further expand and develop our business as we anticipate our new ad serving platform will be operational by the end of 2015 and we expect to retire our existing platform by mid-2016.

Off-Balance Sheet Arrangements

We have entered into operating leases for all of our office facilities and certain equipment rentals. Generally these leases are for periods of three to ten years and usually contain one or more renewal options. We use leasing arrangements to preserve capital. We expect to continue to lease the majority of our office facilities under arrangements substantially consistent with the past.

Other than our operating leases, we are not a party to any off-balance sheet arrangement that we believe is likely to have a material impact on our current or future financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have no material changes to the disclosure on this matter made in our Annual Report.

Item 4.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), as of the end of the period covered by this Report, our management evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act).  Based on their evaluation of these disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures were effective as of the date of such evaluation.

31

Changes in Internal Control over Financial Reporting

During the three months ended June 30, 2015, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.               OTHER INFORMATION

Item 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

See a description of our share repurchase program in Part I, Item 2 of this Report under the heading “Liquidity and Capital Resources” and sub heading “Cash Requirements.”  There were no purchases made under our share repurchase program during the three months ended June 30, 2015.  As of June 30, 2015, $23.5 million remained available for future share repurchases under the share repurchase program.

Item 6.   EXHIBITS

Exhibits
3.1(a) 3.2(b) 10.1 ** 31.1 **	Amended and Restated Certificate of Incorporation of Registrant. Second Amended and Restated Bylaws of Registrant. Separation Agreement and General Release of Claims dated May 8, 2015 between Sizmek Inc. and Sean Markowitz.* Rule 13a-14(a)/15d-14(a) Certification.
31.2 **	Rule 13a-14(a)/15d-14(a) Certification.
32.1 **	Section 1350 Certifications.
101  **	The following materials from our Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Unaudited Consolidated and Combined Statements of Operations, (iii) Unaudited Consolidated and Combined Statements of Comprehensive Loss, (iv) Unaudited Consolidated Statement of Stockholders’ Equity, (v) Unaudited Consolidated and Combined Statements of Cash Flows, and (vi) Notes to Unaudited Consolidated and Combined Financial Statements.

* **	Management contract or compensatory plan or arrangement. Filed herewith.
(a)	Incorporated by reference to the exhibit bearing the same title filed with the Registrant’s Current Report on Form 8-K filed February 4, 2014.
(b)	Incorporated by reference to the exhibit bearing the same title filed with the Registrant’s Current Report on Form 8-K filed November 3, 2014.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SIZMEK INC.
Date: August 13, 2015	By:	/s/ NEIL H. NGUYEN
	Name:	Neil H. Nguyen
	Title:	Chief Executive Officer and President
Date: August 13, 2015	By:	/s/ KENNETH SAUNDERS
	Name:	Kenneth Saunders
	Title:	Chief Financial Officer

33

EX-10.1

Exhibit 10.1

THIS AGREEMENT IS SUBJECT TO ARBITRATION

SEPARATION AGREEMENT

AND GENERAL RELEASE OF CLAIMS

THIS SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS (this “Agreement”) is made and entered into as of this 8th day of May, 2015, by and between Sizmek Inc., a Delaware corporation (the “Corporation”), and Sean Markowitz (“Executive”).

WHEREAS, Executive and the Corporation are parties to that certain Employment Agreement dated as of April 14, 2014 (the “Employment Agreement”);

WHEREAS, Executive's employment with the Corporation will terminate effective as of May 1, 2015 (the "Date of Termination");

WHEREAS, the parties agree that Executive is entitled to certain severance benefits under the Employment Agreement, subject to Executive’s execution and non-revocation of this Agreement on the terms and conditions set forth herein and in the Employment Agreement; and

WHEREAS, the Corporation and Executive now wish to fully and finally to resolve all matters between them.

NOW, THEREFORE, in consideration of, and subject to, the severance benefits payable to Executive pursuant to this Agreement and the Employment Agreement, the adequacy of which is hereby acknowledged by Executive, and which Executive acknowledges that he would not otherwise be entitled to receive, the parties hereby agree as follows:

4.             Payments Upon Termination.  Payments to Executive upon termination shall be as follows:

(a)           Payment of Accrued Obligations.  Executive shall be entitled to (i) all arrearages of Base Salary through the Date of Termination, payable on the Date of Termination, (ii) any accrued but unused vacation through the Date of Termination, payable on the Date of Termination, plus (iii) all other benefits, if any, under any group retirement plan, health benefits plan or other group benefit plan maintained by the Corporation or its subsidiaries and any reimbursement of expenses pursuant to Section 6 of the Employment Agreement to which Executive may be entitled pursuant to the terms of such plans or agreements at the time of Executive’s Date of Termination  payable in accordance with the applicable plans and the Corporation’s customary policies as in effect from time to time (collectively, the “Accrued Obligations”).

(b)           Severance Benefits.  As consideration for Executive’s agreement to be bound by the terms of this Agreement, including without limitation, the release set forth in Section 2 below, Executive shall be entitled to receive the following, which shall be the exclusive severance benefits to which Executive is entitled and shall fully and completely satisfy the Corporation's obligations to Executive under Section 16(c) of the Employment Agreement as a result of Executive's termination of employment:

(i)           Executive shall be entitled to severance equal to $344,167, representing the sum of (i) 12 months’ base salary at the rate in effect on the Date of Termination, plus (ii) an amount equal to Executive’s target annual bonus for the year in which the Date of Termination occurs, pro-rated for the portion of 2015 that elapsed prior to the Date of Termination, which amount shall be payable in a lump sum on the date that is 60 days following the Executive’s Date of Termination; plus

(ii)          In the event an agreement that would result in a Change in Control (as defined in the Employment Agreement) is entered into on or prior to the date that is ninety (90) days following the Date of Termination and such Change in Control transaction is eventually consummated, Executive shall be entitled to an additional severance payment of $120,000, which amount shall be payable in a lump sum on the later of (A) the date that is 60 days following the Executive’s Date of Termination, or (B) the date of the Change in Control, but in no event shall such payment occur later than March 15, 2016; plus

(iii)          Executive shall be entitled to the accelerated vesting of certain of his Long-Term Incentive Awards (as defined in the Employment Agreement) pursuant to Section 16(c)(iii) of the Employment Agreement.

(b)           Termination of Employment.  Effective as of the Date of Termination, Executive hereby resigns from all positions held in the Corporation, including without limitation any position as a director, officer, agent, trustee or consultant of the Corporation or any subsidiary or affiliate of the Corporation.  Executive agrees that Executive will execute any additional documents that the Corporation may reasonably request in connection with the foregoing.

                 2.            General Release of Claims by Executive.

(a)           Executive, on behalf of himself and his executors, heirs, administrators, representatives and assigns, hereby agrees to release and forever discharge the Corporation and all predecessors, successors and their respective parent corporations, affiliates, related, and/or subsidiary entities, and all of their past and present investors, directors, shareholders, officers, general or limited partners, employees, attorneys, agents and representatives, and the employee benefit plans in which Executive is or has been a participant by virtue of his employment with or service to the Corporation (collectively, the “Corporation Releasees”), from any and all claims, debts, demands, accounts, judgments, rights, causes of action, equitable relief, damages, costs, charges, complaints, obligations, promises, agreements, controversies, suits, expenses, compensation, responsibility and liability of every kind and character whatsoever (including attorneys’ fees and costs), whether in law or equity, known or unknown, asserted or unasserted, suspected or unsuspected (collectively, “Claims”), which Executive has or may have had against such entities based on any events or circumstances arising or occurring on or prior to the date hereof or, on or prior to the date hereof, arising directly or indirectly out of, relating to, or in any other way involving in any manner whatsoever Executive’s employment by or service to the Corporation (including any affiliate of the Corporation) or the termination thereof, including any and all claims arising under federal, state, or local laws relating to employment, including without limitation claims of wrongful discharge, breach of express or implied contract, fraud, misrepresentation, defamation, or liability in tort, and claims of any kind that may be brought in any court or administrative agency including, without limitation, claims under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000, et seq.; the Americans with Disabilities Act, as amended, 42 U.S.C. § 12101 et seq.; the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 701 et seq.; the Civil Rights Act of 1866, and the Civil Rights Act of 1991; 42 U.S.C. Section 1981, et seq.; the Age Discrimination in Employment Act, as amended, 29 U.S.C. Section 621, et seq. (the “ADEA”); the Equal Pay Act, as amended, 29 U.S.C. Section 206(d); regulations of the Office of Federal Contract Compliance, 41 C.F.R. Section 60, et seq.; the Family and Medical Leave Act, as amended, 29 U.S.C. § 2601 etseq.; the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq.; and the Executive Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et seq.

2

Notwithstanding the generality of the foregoing, Executive does not release the following claims:

(i)           Claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law;

(ii)           Claims for workers’ compensation insurance benefits under the terms of any worker’s compensation insurance policy or fund of the Corporation;

(iii)         Claims pursuant to the terms and conditions of the federal law known as COBRA or similar state law;

(iv)         Claims for indemnity under the Indemnity Agreement dated February 5, 2014 between Executive and the Corporation, the bylaws of the Corporation, as provided for by Texas or Delaware law or under any applicable insurance policy with respect to Executive’s liability as an employee, director or officer of the Corporation;

(v)          Claims based on any right Executive may have to enforce the Corporation’s executory obligations under this Agreement or the Employment Agreement; and

(vi)         Claims Executive may have to vested or earned compensation and benefits.

(b)           Executive acknowledges this Agreement was presented to him on May 1, 2015, and that Executive is entitled to 21 days’ time in which to consider it.  Executive further acknowledges the Corporation has advised him that he is waiving his rights under the ADEA, and that Executive should consult with an attorney of his choice before signing this Agreement, and Executive has had sufficient time to consider the terms of this Agreement.  Executive represents and acknowledges that if Executive executes this Agreement before 21 days have elapsed, Executive does so knowingly, voluntarily, and upon the advice and with the approval of Executive’s legal counsel (if any), and that Executive voluntarily waives any remaining consideration period.

(c)           Executive understands that after executing this Agreement, Executive has the right to revoke it within 7 days after his execution of it.  Executive understands this Agreement will not become effective and enforceable unless the 7-day revocation period passes and Executive does not revoke the Agreement in writing.  Executive understands this Agreement may not be revoked after the 7-day revocation period has passed.  Executive also understands any revocation of this Agreement must be made in writing and delivered to the Corporation at its principal place of business within the 7 day period.

(d)           Executive understands this Agreement shall become effective, irrevocable, and binding upon Executive on the eighth day after his execution of it, so long as Executive has not revoked it within the time period and in the manner specified in clause (c) above.  Executive further understands Executive will not be given any severance benefits under Section 1(b) above or under the Employment Agreement unless this Agreement is effective on or before the date that is 60 days following the Executive’s Date of Termination.

(e)           Executive represents and warrants to the Corporation Releasees that there has been no assignment or other transfer of any interest in any Claim that Executive may have against the Corporation Releasees.  Executive agrees to indemnify and hold harmless the Corporation Releasees from any liability, claims, demands, damages, costs, expenses and attorneys’ fees incurred as a result of any such assignment or transfer from Executive.

3

3.           Section 409A; Separate Payments; No Acceleration.  This Agreement is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under the Agreement become subject to (a) the gross income inclusion set forth within Section 409A(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the "Code") or (b) the interest and additional tax set forth within Code Section 409A(a)(1)(B) (together, referred to herein as the “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties.  In no event shall the Corporation be required to provide a tax gross-up payment to Executive or otherwise reimburse Executive with respect to Section 409A Penalties.  For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), each series of installment payments Executive may be eligible to receive under this Agreement shall be treated as a series of “separate payments” within the meaning of Section 409A of the Code.  No payment under this Agreement shall be made at a time earlier than that provided for in this Agreement unless such payment is (i) an acceleration of payment permitted to be made under Treasury Regulation §1.409A-3(j)(4) or (ii) a payment that would otherwise not be subject to additional taxes and interest under Section 409A.

4.           Waiver; Notice.  A party’s failure to insist on compliance or enforcement of any provision of this Agreement shall not affect the validity or enforceability or constitute a waiver of future enforcement of that provision or of any other provision of this Agreement by that party or any other party.  Any and all notices required or permitted herein shall be deemed delivered if delivered personally or if mailed by registered or certified mail to the Corporation and Executive at the respective addresses provided on the signature page of this Agreement, or at such other address or addresses as either party may hereafter designate in writing to the other.

5.           Amendments; Assignment.  This Agreement may be amended at any time by mutual consent of the parties hereto, with any such amendment to be invalid unless in writing, signed by the Corporation and Executive.  This Agreement, together with any amendments hereto, shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, assigns, heirs and personal representatives, except that the rights and benefits of either of the parties under this Agreement may not be assigned without the prior written consent of the other party, provided that the Corporation may assign this Agreement to any affiliate of or successor to the Corporation.

6.           Severability.  Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision of this Agreement or the validity, legality or enforceability of such provision in any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

7.           Arbitration.  This Agreement shall be subject to arbitration as set forth in Section 23 of the Employment Agreement.

8.           Governing Law.  This Agreement shall in all respects be subject to, and governed by, the laws of the State of Texas.

                9.           Entire Agreement.  This Agreement and the Employment Agreement shall constitute the entire agreement and understanding between the parties with respect to the subject matter hereof and thereof and supersede and preempt any prior understandings, agreements or representations by or between the parties, written or oral, which may have related in any manner to the subject matter hereof or thereof.

4

                10.          Amendment and Waiver.  The provisions of this Agreement may be amended or waived only by the written agreement of the Corporation and Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement.

               11.           Counterparts.  This Agreement may be executed in two counterparts, each of which shall be deemed to be an original and both of which together shall constitute one and the same instrument.  The parties hereto agree to accept a signed facsimile copy or portable document format of this Agreement as a fully binding original.

               12.           Headings.  The headings set forth in this Agreement are for convenience only and shall not be used in interpreting this Agreement.  Either party’s failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision of this Agreement.

               13.           Right to Legal Counsel.  This Agreement has been drafted by legal counsel representing the Corporation, but Executive has participated in the negotiation of its terms.  Furthermore, Executive acknowledges Executive has had an opportunity to review this Agreement and have it reviewed by legal counsel, if desired, and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

 [SIGNATURE PAGE FOLLOWS]

5

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

CORPORATION:

Sizmek Inc.

By:   /s/ Jack  Reynolds

Name:  Jack Reynolds

Title:   CVP  GLOBAL HR     

EXECUTIVE:

/s/ Sean Markowitz

Printed Name:  Sean Markowitz

6

EX-31.1

Exhibit 31.1

SIZMEK INC. AND SUBSIDIARIES

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)

I, Neil H. Nguyen, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Sizmek Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 13, 2015	/s/ Neil H. Nguyen
	Neil H. Nguyen
	Chief Executive Officer and
	President

EX-31.2

Exhibit 31.2

SIZMEK INC. AND SUBSIDIARIES

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)

I, Kenneth Saunders, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Sizmek Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 13, 2015	/s/ Kenneth Saunders
	Kenneth Saunders
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

SECTION 1350 CERTIFICATIONS

In connection with the Quarterly Report of Sizmek Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2015, as filed with the SEC on the date hereof (the “Report”), the undersigned, in the capacities and on the dates indicated below, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 13, 2015	By:	/s/ Neil H. Nguyen
		Neil H. Nguyen
		Chief Executive Officer and
		President
Date: August 13, 2015	By:	/s/ Kenneth Saunders
		Kenneth Saunders
		Chief Financial Officer

XML

Acquisitions (Narrative) (Details) - USD ($) $ in Thousands	1 Months Ended					12 Months Ended
	Jun. 30, 2015	May. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Aug. 31, 2014	Dec. 31, 2014	Dec. 31, 2013
Strike Ad [Member]
Business Acquisition [Line Items]
Acquisition date		May 28, 2015
Purchase price		$ 10,300
Cash consideration		7,700
Liabilities assumed		$ 2,600
Weighted average amortization period of intangible assets		3 years 8 months 12 days
Gross receivables amount		$ 3,700
Gross receivables fair value		$ 3,500
Revenues	$ 800
Reported revenues in fiscal year prior to purchase						$ 11,000
Reported loss before income taxes in fiscal year prior to purchase						$ 6,200
Strike Ad [Member] | Customer relationships [Member]
Business Acquisition [Line Items]
Weighted average amortization period of intangible assets		5 years 8 months 12 days
Strike Ad [Member] | Developed technology [Member]
Business Acquisition [Line Items]
Weighted average amortization period of intangible assets		3 years 2 months 12 days
Pixel [Member]
Business Acquisition [Line Items]
Acquisition date				Sep. 04, 2014
Cash consideration			$ 50	$ 450
Liabilities assumed				$ 50
Aerify [Member]
Business Acquisition [Line Items]
Acquisition date					Aug. 11, 2014
Cash consideration					$ 5,625
Liabilities assumed					$ 625
Weighted average amortization period of intangible assets					4 years 2 months 12 days
Reported revenues in fiscal year prior to purchase							$ 3,100
Reported loss before income taxes in fiscal year prior to purchase							$ 600
Aerify [Member] | Customer relationships [Member]
Business Acquisition [Line Items]
Weighted average amortization period of intangible assets					5 years
Aerify [Member] | Developed technology [Member]
Business Acquisition [Line Items]
Weighted average amortization period of intangible assets					4 years

XML

Geographical Information and Product Categories (Revenues By Geographic Area) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Geographical information [Line Items]
Revenues	$ 40,216	$ 44,001	$ 76,975	$ 82,380
Percentage of revenue attributable to foreign jurisdictions			47.00%
United States [Member]
Geographical information [Line Items]
Revenues	20,975	19,779	$ 40,575	38,541
Europe, Middle East and Africa [Member]
Geographical information [Line Items]
Revenues	11,821	14,647	21,171	25,627
Asia Pacific [Member]
Geographical information [Line Items]
Revenues	5,177	6,339	11,071	12,412
Latin America [Member]
Geographical information [Line Items]
Revenues	1,398	2,203	2,749	3,716
North America (excluding U.S.) [Member]
Geographical information [Line Items]
Revenues	$ 845	$ 1,033	$ 1,409	$ 2,084

XML

Income Taxes (Changes In Uncertain Tax Positions) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Changes in uncertain tax positions
Balance at beginning of year	$ 1,507	$ 1,701
Additions for tax positions related to prior years	39
Balance at end of period	$ 1,546	$ 1,701

XML

General (Reclassifications From AOCI Or AOCL To Consolidated And Combined Statements Of Operations) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Affected Line Items in the Consolidated and Combined Statements of Operations [Line Items]
Cost of revenues	$ 14,492	$ 15,268	$ 28,152	$ 29,754
Selling and marketing	15,433	14,514	29,636	30,102
Research and development	3,674	3,193	6,577	6,741
General and administrative	4,739	5,083	9,293	13,188
Other, net	366	205	1,345	208
Loss before income taxes	(7,429)	(2,055)	(15,242)	(16,879)
Tax amounts	(468)	413	(600)	819
Net loss	(7,897)	(1,642)	(15,842)	(16,060)
Unrealized Gain (Loss) on Foreign Currency Derivatives [Member] | Foreign currency derivatives [Member] | Amounts Reclassified out of AOCI [Member]
Affected Line Items in the Consolidated and Combined Statements of Operations [Line Items]
Cost of revenues	3	4	(5)	11
Selling and marketing	1	2	(2)	5
Research and development	14	19	(34)	54
General and administrative	3	5	(8)	15
Other, net	3	(1)	2	30
Loss before income taxes	24	29	(47)	115
Tax amounts	(2)	(4)	5	(15)
Net loss	$ 22	$ 25	$ (42)	$ 100

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Loss per Share (Tables)

6 Months Ended

Jun. 30, 2015

Loss per Share [Abstract]

Schedule of loss per common share

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Net loss	$	(7,897	)	$	(1,642	)	$	(15,842	)	$	(16,060	)
Weighted average common shares outstanding — basic		29,549			30,399			29,666			30,399
Dilutive securities		—			—			—			—
Weighted average common shares outstanding - diluted		29,549			30,399			29,666			30,399
Basic and diluted loss per common share	$	(0.27	)	$	(0.05	)	$	(0.53	)	$	(0.53	)
Antidilutive securities not included:
Stock options and RSUs		1,268			864			1,266			503

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Geographical Information and Product Categories (Long-Lived Assets By Country) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Geographical information [Line Items]
Long-Lived Assets	$ 39,071	$ 34,036
Israel [Member]
Geographical information [Line Items]
Long-Lived Assets	29,403	24,818
United States [Member]
Geographical information [Line Items]
Long-Lived Assets	7,717	7,181
Other countries [Member]
Geographical information [Line Items]
Long-Lived Assets	$ 1,951	$ 2,037

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Goodwill (Changes In Carrying Value Of Goodwill) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Sep. 30, 2014	Jun. 30, 2015	Jun. 30, 2015
Goodwill
Balance at beginning of the period		$ 380,681
Acquisition of StrikeAd		11,134
Balance at end of the period		391,815
Accumulated Impairment Losses
Balance at beginning of the period		$ (340,527)
Goodwill impairment loss	$ 98,200
Balance at end of the period		$ (340,527)
Net Carrying Value
Balance at beginning of the period		40,154
Acquisition of StrikeAd		11,134
Balance at end of the period		$ 40,154	$ 51,288

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Fair Value Measurements (Reconciliation Of Changes In Fair Values Of Level 3 Assets) (Details) - Jun. 30, 2015 - USD ($) $ in Thousands	Total
Fair Value Measurements [Line Items]
Cost basis of currency forward derivative/options	$ 0
Marketable equity securities, cost basis	300
Revenue Sharing Arrangement [Member]
Reconciliation of changes in fair value of Level 3 assets
Balance at beginning of period	$ 160
Additions
Balance at end of period	$ 160

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Loss per Share (Earnings (Loss) Per Common Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
	Jul. 07, 2014	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Loss per Share [Abstract]
Net loss		$ (7,897)	$ (1,642)	$ (15,842)	$ (16,060)
Weighted average common shares outstanding - basic		29,549	30,399	29,666	30,399
Dilutive securities
Weighted average common shares outstanding - diluted		29,549	30,399	29,666	30,399
Basic loss per common share (in dollars per share)		$ (0.27)	$ (0.05)	$ (0.53)	$ (0.53)
Diluted loss per common share (in dollars per share)		$ (0.27)	$ (0.05)	$ (0.53)	$ (0.53)
Antidilutive securities not included:
Stock options and RSUs (in shares)		1,268	864	1,266	503
Common stock distributed in conjunction with the Spin-Off	30,400

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General

6 Months Ended

Jun. 30, 2015

General [Abstract]

General

2. General

Principles of Consolidation and Combination

The consolidated and combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the accounts of our wholly-owned, and majority-owned and controlled subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation or combination.  For the period prior to the Spin-Off, the carve-out financial statements have been prepared on a basis that management believes to be reasonable to reflect the results of operations and cash flows of the Company's operations, including portions of DG's corporate costs and administrative shared services. These unaudited financial statements should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2014.

These financial statements have been prepared by us without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.  However, we believe the disclosures are adequate to make the information presented not misleading.  The unaudited consolidated and combined financial statements reflect all adjustments, which are, in the opinion of management, of a normal and recurring nature and necessary for a fair presentation of our financial position as of the balance sheet dates, and the results of operations and cash flows for the periods presented.

Seasonality

Our business is seasonal. Revenues tend to be the highest in the fourth quarter as a large portion of our revenues follow the advertising spend or budgets of our customers which tend to be at their highest during the holiday season.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to the recoverability and useful lives of our long-lived assets, the adequacy of our allowance for doubtful accounts and credit memo reserves, contingent consideration and income taxes. We base our estimates on historical experience, future expectations and on other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

Effective November 1, 2014, we shortened the estimated remaining useful life of our Sizmek MDX platform assets from an average of 46 months to 20 months in anticipation of our new platform, which is currently in development.  We anticipate the new platform will be operational by the end of 2015 and we expect to retire our existing platform by mid-2016.  For the first six months of 2015, this change increased our net loss and loss per share by $1.6 million and $0.05, respectively.

Risk of Goodwill Impairment

See Note 5 for a discussion of the risk of a future impairment of our goodwill.

Assets and Liabilities of DG's TV Business

Pursuant to the Separation and Redemption Agreement, DG contributed to us substantially all of its television business current assets and certain other assets existing on February 7, 2014, and we agreed to assume substantially all of DG's television business liabilities that existed on February 7, 2014 or were attributable to periods up to and including February 7, 2014.  These net assets contributed were recorded at $78.5 million.  The details of these assets and liabilities outstanding as of June 30, 2015 and December 31, 2014 were as follows (in thousands):

Description	June 30, 2015		December 31, 2014
Current assets of television business:
Income tax receivables	$	1,110	$	1,943
Trade accounts receivable	—		367
Springbox revenue sharing	160		160
Total	$	1,270	$	2,470
Current liabilities of television business:
Trade accounts payable	$	206	$	165
Accrued liabilities	—		230
Total	$	206	$	395
Non-current liabilities of television business:
Uncertain tax positions	$	273	$	260

Derivative Instruments

We enter into foreign currency forward contracts and options to hedge a portion of the exposure to the variability in expected future cash flows resulting from changes in related foreign currency exchange rates between the New Israeli Shekel (“NIS”) and the U.S. Dollar. These transactions were designated as cash flow hedges, as defined by Accounting Standards Codification (“ASC”) Topic 815, “Derivatives and Hedging.”  ASC Topic 815 requires that we recognize derivative instruments as either assets or liabilities in our balance sheet at fair value. These contracts are Level 2 fair value measurements in accordance with ASC Topic 820, “Fair Value Measurements and Disclosures.” For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss), net of taxes, and reclassified into earnings (various operating expenses) in the same period or periods during which the hedged transaction affects earnings.

Our cash flow hedging strategy is to hedge against the risk of overall changes in cash flows resulting from certain forecasted foreign currency rent and salary payments during the next twelve months. We hedge portions of our forecasted expenses denominated in the NIS with a single counterparty using foreign currency forward contracts and options.  At June 30, 2015, we had $12.6 million notional amount of foreign currency forward contracts and options outstanding that had a net fair value asset balance of $0.3 million ($0.4 million asset, net of a $0.1 million liability).  At December 31, 2014, we had $14.3 million notional amount of foreign currency forward contracts and options outstanding that had a net fair value liability balance of $0.1 million ($0.2 million liability, net of a $0.1 million asset). The net asset at June 30, 2015 is included in "other current assets" and is expected to be recognized in our results of operations in the next twelve months. The net liability at December 31, 2014 was included in “accrued liabilities.”  The vast majority of any gain or loss from hedging activities is included in our various operating expenses. As a result of our hedging activities, we incurred the following gains and losses in our results of operations (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015			2014
Hedging gain (loss) recognized in operations	$	24	$	29	$	(47	)	$	115

It is our policy to offset fair value amounts recognized for derivative instruments executed with the same counterparty. In connection with our foreign currency forward contracts and options and other banking arrangements, we have agreed to maintain $1.6 million of cash in bank accounts with our counterparty, which we classify as restricted cash on our balance sheet.

Accumulated Other Comprehensive Income (Loss)

Components of accumulated other comprehensive income (loss) (“AOCI” or “AOCL”), net of tax, for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands):

	Three Months Ended June 30, 2015
	Foreign Currency Translation			Unrealized Gains (Losses) on Foreign Currency Derivatives			Unrealized Gains (Losses) on Available for Sale Securities			Total Accumulated Other Comprehensive Income (Loss)
Balance at March 31, 2015	$	(3,476	)	$	(193	)	$	1,027		$	(2,642	)
Other comprehensive income (loss) before reclassifications		580			491			(6	)		1,065
Amounts reclassified out of AOCL		—			(22	)		—			(22	)
Net current period activity		580			469			(6	)		1,043
Balance at June 30, 2015	$	(2,896	)	$	276		$	1,021		$	(1,599	)

	Six Months Ended June 30, 2015
	Foreign Currency Translation			Unrealized Gains (Losses) on Foreign Currency Derivatives			Unrealized Gains (Losses) on Available for Sale Securities			Total Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2014	$	(2,672	)	$	(98	)	$	1,255		$	(1,515	)
Other comprehensive income (loss) before reclassifications		(224	)		332			(234	)		(126	)
Amounts reclassified out of AOCL		—			42			—			42
Net current period activity		(224	)		374			(234	)		(84	)
Balance at June 30, 2015	$	(2,896	)	$	276		$	1,021		$	(1,599	)

	Three Months Ended June 30, 2014
	Foreign Currency Translation			Unrealized Gains (Losses) on Foreign Currency Derivatives			Unrealized Gains (Losses) on Available for Sale Securities		Total Accumulated Other Comprehensive Income (Loss)
Balance at March 31, 2014	$	(1,101	)	$	39		$	1,030	$	(32	)
Other comprehensive income (loss) before reclassifications		375			10			770		1,155
Amounts reclassified out of AOCL		—			(25	)		—		(25	)
Net current period activity		375			(15	)		770		1,130
Balance at June 30, 2014	$	(726	)	$	24		$	1,800	$	1,098

	Six Months Ended June 30, 2014
	Foreign Currency Translation			Unrealized Gains (Losses) on Foreign Currency Derivatives			Unrealized Gains (Losses) on Available for Sale Securities		Total Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2013	$	(1,198	)	$	116		$	1,764	$	682
Other comprehensive income (loss) before reclassifications		472			8			36		516
Amounts reclassified out of AOCI		—			(100	)		—		(100	)
Net current period activity		472			(92	)		36		416
Balance at June 30, 2014	$	(726	)	$	24		$	1,800	$	1,098

The following table summarizes the reclassifications from AOCI or AOCL to the consolidated and combined statements of operations for the three and six months ended June 30, 2015 and 2014 (in thousands):

	Amounts Reclassified out of AOCI or AOCL
	Three Months Ended June 30, 2015			Three Months Ended June 30, 2014			Affected Line Items in the Consolidated and Combined Statements of Operations
Gains (losses) on cash flow hedges:
Foreign currency derivatives	$	3		$	4		Cost of revenues
Foreign currency derivatives		1			2		Selling and marketing
Foreign currency derivatives		14			19		Research and development
Foreign currency derivatives		3			5		General and administrative
Foreign currency derivatives		3			(1	)	Other, net
Total before taxes		24			29
Tax amounts		(2	)		(4	)
Income after tax	$	22		$	25

	Amounts Reclassified out of AOCI or AOCL
	Six Months Ended June 30, 2015			Six Months Ended June 30, 2014			Affected Line Items in the Consolidated and Combined Statements of Operations
Gains (losses) on cash flow hedges:
Foreign currency derivatives	$	(5	)	$	11		Cost of revenues
Foreign currency derivatives		(2	)		5		Selling and marketing
Foreign currency derivatives		(34	)		54		Research and development
Foreign currency derivatives		(8	)		15		General and administrative
Foreign currency derivatives		2			30		Other, net
Total before taxes		(47	)		115
Tax amounts		5			(15	)
Income (loss) after tax	$	(42	)	$	100

Merger, Integration and Other Expenses

Merger, integration and other expenses reflect the expenses incurred in (i) DG's Merger with Extreme Reach and our Spin-Off from DG, (ii) acquiring or disposing of a business, (iii) integrating an acquired operation (e.g., office closure costs) into the Company and (iv) certain other items of income or expense not deemed to be part of our core operations. A summary of our merger, integration and other expenses is as follows (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
Description	2015			2014		2015			2014
Merger and Spin-Off (1)	$	—		$	581	$	—		$	4,738
Severance		142			357		466			558
Integration and restructuring costs		565			374		1,070			955
Acquisition, legal and due diligence fees		611			32		730			38
Recovery of TV business net assets (2)		(148	)		—		(262	)		—
Total	$	1,170		$	1,344	$	2,004		$	6,289

(1) - See discussion of Merger and Spin-Off under “Separation from Digital Generation, Inc.” in Note 1.

(2) - Represents a reduction in expense due to realizing more TV business net assets than originally estimated at the time of the Spin-Off.

Israel Operations

The majority of our research and development activities and a large portion of our accounting functions are performed in Herzliya, Israel. In total, about 26% of our workforce is located in Israel.  As a result, we are subject to risks associated with operating in the Middle East.

Recently Issued Accounting Guidance

In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 modifies revenue recognition guidance for GAAP. Previous revenue recognition guidance in GAAP comprised broad revenue recognition concepts together with numerous revenue requirements for particular industries or transactions, which sometimes resulted in different accounting for economically similar transactions. In contrast, International Accounting Standards Board ("IASB") provided limited guidance on revenue recognition. Accordingly, the FASB and IASB initiated a joint project to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and International Financial Reporting Standards ("IFRS"). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:  

        Step 1: Identify the contract(s) with a customer.

        Step 2: Identify the performance obligations in the contract.

        Step 3: Determine the transaction price.

        Step 4: Allocate the transaction price to the performance obligations in the contract.

        Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

For Sizmek, the amendments in ASU 2014-09 are presently effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and early adoption is not permitted.  An entity shall adopt the amendments in ASU 2014-09 by either (i) retrospectively adjusting each prior reporting period presented or (ii) retrospectively adjusting for the cumulative effect of initially applying ASU 2014-09 at the date of initial adoption. We have not as yet determined (i) the extent to which we expect ASU 2014-09 will impact our reported revenues or (ii) the manner in which it will be adopted.

In July 2015, the FASB affirmed its proposal to defer the effective date of the guidance in ASU 2014-09 for all entities by one year. As a result, if the proposal is formally adopted by the issuance of a new ASU, the new revenue standard (currently discussed in ASU 2014-09) would be effective for Sizmek for annual reporting periods beginning after December 15, 2017.  The FASB also affirmed its proposal to permit all entities to early adopt the guidance in the new revenue standard, but not before annual periods beginning after December 15, 2016.

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Share-based Compensation (Share-based Compensation Expense) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Share-based Compensation [Abstract]
DG stock options and RSUs awarded to our employees		$ 2,650
DG share-based awards allocated to us as part of corporate services		3,817
Sizmek share-based awards granted	$ 1,903	1,066
Share-based compensation expense related to the stock awards	$ 1,903	$ 7,533

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General (Narrative) (Details) - Certain internally developed software [Member] - USD ($) $ / shares in Units, $ in Millions			6 Months Ended
	Nov. 01, 2014	Oct. 31, 2014	Jun. 30, 2015
Useful Life [Line Items]
Estimated useful life	20 months	46 months
Reduction in net income due to change in estimated useful life			$ 1.6
Reduction in diluted earnings per share due to change in estimated useful life			$ 0.05

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Basis of Presentation (Details)	6 Months Ended
	Jun. 30, 2015 item $ / shares	Dec. 31, 2014 $ / shares	Feb. 07, 2014 $ / shares
Basis of Presentation [Abstract]
Number of advertisers connected to audiences	17,000
Number of agencies connected to audiences	3,500
Number of countries in which entity operates	60
Minimum number of impressions served	1,400,000,000,000
Common stock, par value | $ / shares	$ 0.001	$ 0.001	$ 0.001
Per share distribution to DG shareholders | $ / shares			$ 3.00

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Share-based Compensation (Narrative) (Details) - Sizmek Plan [Member] - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2015	Mar. 31, 2015
Share-based Compensation [Line Items]
Unrecognized compensation costs related to unvested RSUs and stock options	$ 7.7
Minimum [Member]
Share-based Compensation [Line Items]
Vesting period	1 year	1 year
Maximum [Member]
Share-based Compensation [Line Items]
Vesting period	3 years	3 years
Restricted Stock Units [Member]
Share-based Compensation [Line Items]
Value of RSUs granted in period	$ 3.4	$ 2.8
Restricted Stock Units [Member] | Performance Based [Member]
Share-based Compensation [Line Items]
Awards granted in period (in shares)	87,251	159,245
Restricted Stock Units [Member] | Time Based [Member]
Share-based Compensation [Line Items]
Awards granted in period (in shares)	361,112	192,867
Stock options [Member]
Share-based Compensation [Line Items]
Value of stock options granted in period	$ 0.4	$ 0.6
Stock options [Member] | Time Based [Member]
Share-based Compensation [Line Items]
Number of options granted (in shares)	86,175	133,600

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General (Assets And Liabilities Of DG's TV Business) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014	Feb. 07, 2014
Assets and Liabilities of DG's TV Business [Abstract]
Net assets of TV business contributed by DG			$ 78,500
Current assets of television business:
Income tax receivable	$ 1,110	$ 1,943
Trade accounts receivable		367
Springbox revenue sharing	$ 160	160
Current assets of TV business	1,270	2,470
Current liabilities of television business:
Trade accounts payable	$ 206	165
Accrued liabilities		230
Current liabilities of TV business	$ 206	395
Non-current liabilities of television business:
Uncertain tax positions	$ 273	$ 260

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General (Derivative Instruments) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Derivative Instruments
Period for which certain forecasted foreign currency rent and salary payments are hedged			12 months
Notional amount of foreign currency forward contracts and options outstanding	$ 12,600		$ 12,600		$ 14,300
Net fair value asset (liability) balance of foreign currency forward contracts and options outstanding	300		300		(100)
Fair value asset balance of foreign currency forward contracts and options outstanding	400		400		100
Fair value liability balance of foreign currency forward contracts and options outstanding	100		100		200
Hedging gain (loss) recognized in operations	24	$ 29	(47)	$ 115
Restricted cash	$ 1,578		$ 1,578		$ 1,538

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Basis of Presentation

6 Months Ended

Jun. 30, 2015

Basis of Presentation [Abstract]

Basis of Presentation

1. Basis of Presentation

The Company

Sizmek Inc. ("Sizmek," the "Company," "we," "us," and "our"), a Delaware corporation formed in 2013, operates a leading independent global online ad campaign management and distribution platform as measured by the number of advertising impressions served and the number of countries in which we serve customers. Our revenues are principally derived from services related to online advertising. We help advertisers, agencies and publishers engage with consumers across multiple online media channels (mobile, display, rich media, video and social) while delivering efficient, impactful and measurable ad campaigns. We connect approximately 17,000 advertisers and 3,500 agencies to audiences in about 60 countries, serving more than 1.4 trillion impressions a year.

Separation from Digital Generation, Inc.

Prior to February 7, 2014, we operated as the online segment of Digital Generation, Inc. ("DG"), a leading global television and online advertising management and distribution business. On February 7, 2014, pursuant to the terms of the Agreement and Plan of Merger, dated as of August 12, 2013 (the "Merger Agreement"), by and among Extreme Reach, Inc. ("Extreme Reach"), Dawn Blackhawk Acquisition Corp., a wholly-owned subsidiary of Extreme Reach ("Acquisition Sub"), and DG, all of our issued and outstanding shares of common stock, par value $0.001 per share ("Sizmek Common Stock") were distributed by DG pro rata to its stockholders (the "Spin-Off") with the DG stockholders receiving one share of Sizmek Common Stock for each share of DG common stock ("DG Common Stock") they held. Immediately after the distribution of the Sizmek Common Stock, pursuant to the Merger Agreement, Acquisition Sub merged with and into DG with DG as the surviving corporation (the "Merger") and each of the outstanding shares of DG Common Stock was converted into the right to receive $3.00 per share, and DG became a wholly-owned subsidiary of Extreme Reach. Prior to the Spin-Off, pursuant to the Separation and Redemption Agreement and related documents, DG contributed to us all of the business and operations of its online advertising segment, all of DG's cash, most of the working capital from its television segment, and certain other corporate assets; and we agreed to indemnify DG and affiliates of DG (including Extreme Reach) for all pre-closing liabilities of DG, including stockholder litigation, tax obligations, and employee liabilities. Sizmek now operates as a separate, stand-alone publicly-traded company in the online advertising services business segment.

Carve-out Financial Statements Prior to Spin-Off

Prior to our Spin-Off from DG on February 7, 2014, our combined financial statements were derived from the consolidated financial statements and accounting records of DG. These statements reflected the combined historical results of operations, financial position and cash flows of DG's online business primarily conducted through MediaMind Technologies Inc., EyeWonder, LLC, Peer39, Inc., and Unicast EMEA, Ltd., and an allocable portion of DG's corporate costs. For the period prior to the Spin-Off, our financial statements are presented as if such businesses had been combined for all periods presented.

All intercompany transactions have been eliminated. All intercompany transactions between us and DG have been included in these combined financial statements and are considered to be effectively settled for cash in the combined financial statements at the time the transaction is recorded. The total net effect of the settlement of these intercompany transactions is reflected in the combined statements of cash flows as a financing activity.

For the period prior to our Spin-Off on February 7, 2014, the combined financial statements include expense allocations for (1) certain corporate functions historically provided by DG, including, but not limited to, finance, audit, legal, information technology, human resources, communications, compliance, and shared services; (2) employee benefits and incentives; and (3) share-based compensation. These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on a pro-rata basis of combined revenues, headcount or other measures of the Company and DG. We consider the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to, or the benefit received by, us during the period presented. The allocations may not, however, reflect the expense we would have incurred as an independent, publicly-traded company for the period presented. We benefited from sharing the corporate cost structure of DG rather than incurring such costs ourselves on a stand-alone basis.

The majority of the pre Spin-Off expense allocations were charged to general and administrative expense. For the periods subsequent to the Spin-Off, general and administrative expense as a percentage of revenues (excluding the accelerated recognition of share-based payment awards in connection with the Spin-Off in February 2014) has been comparable to the corresponding period of the prior year. Accordingly, while we benefited from sharing DG's cost structure prior to the Spin-Off, since the Spin-Off we have been able to control our corporate overhead expenses to a level reasonably consistent with the pre Spin-Off periods.

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General (Components Of Accumulated Other Comprehensive Income (Loss) (AOCI or AOCL), Net Of Tax) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of the period	$ (2,642)	$ (32)	$ (1,515)	$ 682
Other comprehensive income (loss) before reclassifications	1,065	1,155	(126)	516
Amounts reclassified out of AOCL	(22)	(25)	42	(100)
Net current period activity	1,043	1,130	(84)	416
Balance at end of the period	(1,599)	1,098	(1,599)	1,098
Foreign Currency Translation [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of the period	(3,476)	(1,101)	(2,672)	(1,198)
Other comprehensive income (loss) before reclassifications	$ 580	$ 375	$ (224)	$ 472
Amounts reclassified out of AOCL
Net current period activity	$ 580	$ 375	$ (224)	$ 472
Balance at end of the period	(2,896)	(726)	(2,896)	(726)
Unrealized Gains (Losses) on Foreign Currency Derivatives [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of the period	(193)	39	(98)	116
Other comprehensive income (loss) before reclassifications	491	10	332	8
Amounts reclassified out of AOCL	(22)	(25)	42	(100)
Net current period activity	469	(15)	374	(92)
Balance at end of the period	276	24	276	24
Unrealized Gains (Losses) on Available for Sale Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of the period	1,027	1,030	1,255	1,764
Other comprehensive income (loss) before reclassifications	$ (6)	$ 770	$ (234)	$ 36
Amounts reclassified out of AOCL
Net current period activity	$ (6)	$ 770	$ (234)	$ 36
Balance at end of the period	$ 1,021	$ 1,800	$ 1,021	$ 1,800

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Acquisitions (Summary of Estimated Fair values of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	May. 28, 2015	Dec. 31, 2014	Sep. 04, 2014	Aug. 11, 2014
Purchase Price Allocations
Goodwill	$ 51,288		$ 40,154
Strike Ad [Member]
Purchase Price Allocations
Cash		$ 100
Receivables		3,500
Other current assets		100
Customer relationships		1,100
Developed technology		4,300
Goodwill		11,100
Total assets acquired		20,200
Less liabilities assumed		(9,900)
Net assets acquired		$ 10,300
Pixel [Member]
Purchase Price Allocations
Cash
Receivables
Other current assets
Customer relationships
Developed technology
Goodwill				$ 500
Total assets acquired				$ 500
Less liabilities assumed
Net assets acquired				$ 500
Aerify [Member]
Purchase Price Allocations
Cash
Receivables
Other current assets
Customer relationships					$ 400
Developed technology					2,100
Goodwill					3,800
Total assets acquired					$ 6,300
Less liabilities assumed
Net assets acquired					$ 6,300

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
CURRENT ASSETS:
Cash and cash equivalents	$ 66,932	$ 90,672
Accounts receivable (less allowances of $773 and $813 as of June 30, 2015 and December 31, 2014, respectively)	48,471	51,125
Deferred income taxes	588	636
Restricted cash	1,578	1,538
Other current assets	7,468	5,254
Current assets of TV business	1,270	2,470
Total current assets	126,307	151,695
Property and equipment, net	39,071	34,036
Goodwill	51,288	40,154
Intangible assets, net	68,894	71,306
Deferred income taxes	354	387
Restricted cash	4,590	3,941
Other non-current assets	3,074	3,393
Total assets	293,578	304,912
CURRENT LIABILITIES:
Accounts payable	3,813	3,976
Accrued liabilities	26,101	19,171
Current liabilities of TV business	206	395
Total current liabilities	30,120	23,542
Deferred income taxes	7,645	8,242
Other non-current liabilities	7,797	6,433
Non-current liabilities of TV business	273	260
Total liabilities	$ 45,835	$ 38,477
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value-Authorized 15,000 shares; issued and outstanding-none
Common stock, $0.001 par value-Authorized 200,000 shares; 30,496 issued and 29,550 outstanding at June 30, 2015; 30,399 issued and 30,071 outstanding at December 31, 2014	$ 30	$ 30
Treasury stock, at cost (946 shares and 328 shares at June 30, 2015 and December 31, 2014, respectively)	(6,500)	(2,000)
Additional capital	372,995	371,261
Accumulated deficit	(117,183)	(101,341)
Accumulated other comprehensive loss	(1,599)	(1,515)
Total stockholders' equity	247,743	266,435
Total liabilities and stockholders' equity	$ 293,578	$ 304,912

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Income Taxes (Narrative) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Income Taxes [Abstract]
Effective tax rate (as a percent)	(3.90%)	4.90%
Federal statutory tax rate (as a percent)	35.00%
Maximum interest or penalities related to uncertain tax positions	$ 0.1	$ 0.1

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CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2015 - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock [Member]	Treasury Stock [Member]	Additional Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Loss [Member]
Balance at Dec. 31, 2014	$ 266,435	$ 30	$ (2,000)	$ 371,261	$ (101,341)	$ (1,515)
Balance, shares at Dec. 31, 2014	30,399	30,399	(328)
Increase (Decrease) in Stockholders' Equity
Net loss	$ (15,842)				$ (15,842)
Share-based compensation	1,903			$ 1,903
Common stock issued pursuant to RSU agreements, net of shares tendered to satisfy required tax withholding	(169)			$ (169)
Common stock issued pursuant to RSU agreements, net of shares tendered to satisfy required tax withholding, shares		97
Purchase of treasury stock	(4,500)		$ (4,500)
Purchase of treasury stock, shares			(618)
Other comprehensive loss	(84)					$ (84)
Balance at Jun. 30, 2015	$ 247,743	$ 30	$ (6,500)	$ 372,995	$ (117,183)	$ (1,599)
Balance, shares at Jun. 30, 2015	30,496	30,496	(946)

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General (Israel Operations) (Details)	6 Months Ended
	Jun. 30, 2015
General [Abstract]
Percentage of workforce in Israel	26.00%

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Goodwill (Tables)

6 Months Ended

Jun. 30, 2015

Goodwill [Abstract]

Schedule of changes in carrying value of goodwill

	Goodwill		Accumulated Impairment Losses			Net Carrying Value
Balance at December 31, 2014	$	380,681	$	(340,527	)	$	40,154
Acquisition of StrikeAd		11,134		—			11,134
Balance at June 30, 2015	$	391,815	$	(340,527	)	$	51,288

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Fair Value Measurements (Fair Value Of Assets And Liabilities) (Details) - Recurring basis [Member] - USD ($) $ in Thousands		Jun. 30, 2015	Dec. 31, 2014
Assets:
Money market funds	[1]	$ 28,964	$ 35,953
Currency forward derivatives/options	[2]	319
Revenue sharing arrangement	[3]	160	160
Marketable equity securities	[4]	1,362	1,596
Total		30,805	37,709
Liabilities:
Currency forward derivatives/options	[5]		113
Quoted Prices in Active Markets (Level 1) [Member]
Assets:
Money market funds	[1]	$ 28,964	$ 35,953
Currency forward derivatives/options	[2]
Revenue sharing arrangement	[3]
Marketable equity securities	[4]	$ 1,362	$ 1,596
Total		$ 30,326	$ 37,549
Liabilities:
Currency forward derivatives/options	[5]
Significant Other Observable Inputs (Level 2) [Member]
Assets:
Money market funds	[1]
Currency forward derivatives/options	[2]	$ 319
Revenue sharing arrangement	[3]
Marketable equity securities	[4]
Total		$ 319
Liabilities:
Currency forward derivatives/options	[5]		$ 113
Significant Unobservable Inputs (Level 3) [Member]
Assets:
Money market funds	[1]
Currency forward derivatives/options	[2]
Revenue sharing arrangement	[3]	$ 160	$ 160
Marketable equity securities	[4]
Total		$ 160	$ 160
Liabilities:
Currency forward derivatives/options	[5]

[1] Included in cash and cash equivalents.

[2] Included in other current assets.

[3] Included in current assets of TV business.

[4] Included in other non-current assets.

[5] Included in accrued liabilities.

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2015

Income Taxes [Abstract]

Schedule of changes in uncertain tax positions

	Six Months Ended June 30,
	2015		2014
Balance at beginning of year	$	1,507	$	1,701
Additions for tax positions related to prior years		39		—
Balance at end of period	$	1,546	$	1,701

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CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net loss	$ (15,842)	$ (16,060)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation of property and equipment	7,335	4,959
Amortization of intangibles	7,875	8,018
Share-based compensation	1,903	7,533
Deferred income taxes	(590)	(702)
Benefit for accounts receivable recoveries	(40)	$ (157)
Gain from recovery of TV business net assets	(50)
Other	(2)	$ (349)
Changes in operating assets and liabilities:
Accounts receivable	6,252	1,814
Other assets	(1,574)	(1,568)
Accounts payable and other liabilities	(5,598)	(1,322)
Net cash (used in) provided by operating activities	(331)	2,166
Cash flows from investing activities:
Purchases of property and equipment	(3,131)	(2,310)
Capitalized costs of developing software	(8,370)	$ (5,639)
Acquisition, net of cash acquired	(7,541)
Purchase of long term investment		$ (975)
Other	(433)	(776)
Net cash used in investing activities	(19,475)	$ (9,700)
Cash flows from financing activities:
Purchases of treasury stock	(4,500)
Payments of TV business liabilities	(126)	$ (9,346)
Proceeds from TV business assets	1,200	$ 43,013
Payment of tax withholding obligation for shares tendered	$ (169)
Net contributions from Parent		$ 44,833
Net cash (used in) provided by financing activities	$ (3,595)	78,500
Effect of exchange rate changes on cash and cash equivalents	(339)	32
Net (decrease) increase in cash and cash equivalents	(23,740)	70,998
Cash and cash equivalents at beginning of year	90,672	22,648
Cash and cash equivalents at end of period	66,932	93,646
Supplemental disclosures of cash flow information:
Cash paid for income taxes	445	$ 1,396
Cash received for interest	(47)
Extended payment obligations incurred to purchase software	$ 960

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
CONSOLIDATED BALANCE SHEETS [Abstract]
Accounts receivable, allowances	$ 773	$ 813
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, Authorized shares	15,000	15,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, Authorized shares	200,000	200,000
Common stock, issued shares	30,496	30,399
Common stock, outstanding shares	29,550	30,071
Treasury stock, shares	946	328

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Related Party Transactions

6 Months Ended

Jun. 30, 2015

Related Party Transactions [Abstract]

Related Party Transactions

10.  Related Party Transactions

Prior to the Spin-Off, DG provided certain management and administrative services to us. These services included, among others, accounting, treasury, audit, tax, legal, executive oversight, human resources, real estate, information technology and risk management. These expenses have been allocated to us on a basis of direct usage when identifiable, with the remainder allocated on the basis of revenue, headcount, or other measures.  DG also allocated to us (i) merger, integration and other expenses and (ii) share-based compensation, largely based on revenues. DG's allocation of these expenses to us was as follows (in thousands):

DG's Expense Allocation to Sizmek	Six Months Ended June 30, 2014
Management and administrative services	$	637
Merger, integration and other	4,038
Share-based compensation	3,817
Total	$	8,492

Included in the above allocations are costs of DG's employee benefit plans and other employee incentives. Employee benefits and incentives include 401(k) matching contributions, participation in DG's long-term incentive compensation award plans and healthcare plans. The employee benefit and incentive costs are reflected in the statements of operations and are classified consistently with how the underlying employee's salary and other compensation costs have been recorded.

We consider the allocated cost for corporate services, employee benefits and incentives to be reasonable based on our utilization of such services. However, we believe the allocated cost for these services are different from the cost we would have incurred if we had been an independent publicly-traded company during those periods.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 11, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	Sizmek Inc.
Entity Central Index Key	0001591877
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		29,550,310
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2

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General (Policies)

6 Months Ended

Jun. 30, 2015

General [Abstract]

Principles of Consolidation and Combination

Principles of Consolidation and Combination

The consolidated and combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the accounts of our wholly-owned, and majority-owned and controlled subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation or combination.  For the period prior to the Spin-Off, the carve-out financial statements have been prepared on a basis that management believes to be reasonable to reflect the results of operations and cash flows of the Company's operations, including portions of DG's corporate costs and administrative shared services. These unaudited financial statements should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2014.

These financial statements have been prepared by us without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.  However, we believe the disclosures are adequate to make the information presented not misleading.  The unaudited consolidated and combined financial statements reflect all adjustments, which are, in the opinion of management, of a normal and recurring nature and necessary for a fair presentation of our financial position as of the balance sheet dates, and the results of operations and cash flows for the periods presented.

Seasonality

Seasonality

Our business is seasonal. Revenues tend to be the highest in the fourth quarter as a large portion of our revenues follow the advertising spend or budgets of our customers which tend to be at their highest during the holiday season.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to the recoverability and useful lives of our long-lived assets, the adequacy of our allowance for doubtful accounts and credit memo reserves, contingent consideration and income taxes. We base our estimates on historical experience, future expectations and on other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

Effective November 1, 2014, we shortened the estimated remaining useful life of our Sizmek MDX platform assets from an average of 46 months to 20 months in anticipation of our new platform, which is currently in development.  We anticipate the new platform will be operational by the end of 2015 and we expect to retire our existing platform by mid-2016.  For the first six months of 2015, this change increased our net loss and loss per share by $1.6 million and $0.05, respectively.

Risk of Goodwill Impairment

Risk of Goodwill Impairment

See Note 5 for a discussion of the risk of a future impairment of our goodwill.

Assets and Liabilities of DG's TV Business

Assets and Liabilities of DG's TV Business

Pursuant to the Separation and Redemption Agreement, DG contributed to us substantially all of its television business current assets and certain other assets existing on February 7, 2014, and we agreed to assume substantially all of DG's television business liabilities that existed on February 7, 2014 or were attributable to periods up to and including February 7, 2014.  These net assets contributed were recorded at $78.5 million.  The details of these assets and liabilities outstanding as of June 30, 2015 and December 31, 2014 were as follows (in thousands):

Description	June 30, 2015		December 31, 2014
Current assets of television business:
Income tax receivables	$	1,110	$	1,943
Trade accounts receivable	—		367
Springbox revenue sharing	160		160
Total	$	1,270	$	2,470
Current liabilities of television business:
Trade accounts payable	$	206	$	165
Accrued liabilities	—		230
Total	$	206	$	395
Non-current liabilities of television business:
Uncertain tax positions	$	273	$	260

Derivative Instruments

Derivative Instruments

We enter into foreign currency forward contracts and options to hedge a portion of the exposure to the variability in expected future cash flows resulting from changes in related foreign currency exchange rates between the New Israeli Shekel (“NIS”) and the U.S. Dollar. These transactions were designated as cash flow hedges, as defined by Accounting Standards Codification (“ASC”) Topic 815, “Derivatives and Hedging.”  ASC Topic 815 requires that we recognize derivative instruments as either assets or liabilities in our balance sheet at fair value. These contracts are Level 2 fair value measurements in accordance with ASC Topic 820, “Fair Value Measurements and Disclosures.” For derivative instruments that are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (loss), net of taxes, and reclassified into earnings (various operating expenses) in the same period or periods during which the hedged transaction affects earnings.

Our cash flow hedging strategy is to hedge against the risk of overall changes in cash flows resulting from certain forecasted foreign currency rent and salary payments during the next twelve months. We hedge portions of our forecasted expenses denominated in the NIS with a single counterparty using foreign currency forward contracts and options.  At June 30, 2015, we had $12.6 million notional amount of foreign currency forward contracts and options outstanding that had a net fair value asset balance of $0.3 million ($0.4 million asset, net of a $0.1 million liability).  At December 31, 2014, we had $14.3 million notional amount of foreign currency forward contracts and options outstanding that had a net fair value liability balance of $0.1 million ($0.2 million liability, net of a $0.1 million asset). The net asset at June 30, 2015 is included in "other current assets" and is expected to be recognized in our results of operations in the next twelve months. The net liability at December 31, 2014 was included in “accrued liabilities.”  The vast majority of any gain or loss from hedging activities is included in our various operating expenses. As a result of our hedging activities, we incurred the following gains and losses in our results of operations (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015			2014
Hedging gain (loss) recognized in operations	$	24	$	29	$	(47	)	$	115

It is our policy to offset fair value amounts recognized for derivative instruments executed with the same counterparty. In connection with our foreign currency forward contracts and options and other banking arrangements, we have agreed to maintain $1.6 million of cash in bank accounts with our counterparty, which we classify as restricted cash on our balance sheet.

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

Components of accumulated other comprehensive income (loss) (“AOCI” or “AOCL”), net of tax, for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands):

	Three Months Ended June 30, 2015
	Foreign Currency Translation			Unrealized Gains (Losses) on Foreign Currency Derivatives			Unrealized Gains (Losses) on Available for Sale Securities			Total Accumulated Other Comprehensive Income (Loss)
Balance at March 31, 2015	$	(3,476	)	$	(193	)	$	1,027		$	(2,642	)
Other comprehensive income (loss) before reclassifications		580			491			(6	)		1,065
Amounts reclassified out of AOCL		—			(22	)		—			(22	)
Net current period activity		580			469			(6	)		1,043
Balance at June 30, 2015	$	(2,896	)	$	276		$	1,021		$	(1,599	)

	Six Months Ended June 30, 2015
	Foreign Currency Translation			Unrealized Gains (Losses) on Foreign Currency Derivatives			Unrealized Gains (Losses) on Available for Sale Securities			Total Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2014	$	(2,672	)	$	(98	)	$	1,255		$	(1,515	)
Other comprehensive income (loss) before reclassifications		(224	)		332			(234	)		(126	)
Amounts reclassified out of AOCL		—			42			—			42
Net current period activity		(224	)		374			(234	)		(84	)
Balance at June 30, 2015	$	(2,896	)	$	276		$	1,021		$	(1,599	)

	Three Months Ended June 30, 2014
	Foreign Currency Translation			Unrealized Gains (Losses) on Foreign Currency Derivatives			Unrealized Gains (Losses) on Available for Sale Securities		Total Accumulated Other Comprehensive Income (Loss)
Balance at March 31, 2014	$	(1,101	)	$	39		$	1,030	$	(32	)
Other comprehensive income (loss) before reclassifications		375			10			770		1,155
Amounts reclassified out of AOCL		—			(25	)		—		(25	)
Net current period activity		375			(15	)		770		1,130
Balance at June 30, 2014	$	(726	)	$	24		$	1,800	$	1,098

	Six Months Ended June 30, 2014
	Foreign Currency Translation			Unrealized Gains (Losses) on Foreign Currency Derivatives			Unrealized Gains (Losses) on Available for Sale Securities		Total Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2013	$	(1,198	)	$	116		$	1,764	$	682
Other comprehensive income (loss) before reclassifications		472			8			36		516
Amounts reclassified out of AOCI		—			(100	)		—		(100	)
Net current period activity		472			(92	)		36		416
Balance at June 30, 2014	$	(726	)	$	24		$	1,800	$	1,098

The following table summarizes the reclassifications from AOCI or AOCL to the consolidated and combined statements of operations for the three and six months ended June 30, 2015 and 2014 (in thousands):

	Amounts Reclassified out of AOCI or AOCL
	Three Months Ended June 30, 2015			Three Months Ended June 30, 2014			Affected Line Items in the Consolidated and Combined Statements of Operations
Gains (losses) on cash flow hedges:
Foreign currency derivatives	$	3		$	4		Cost of revenues
Foreign currency derivatives		1			2		Selling and marketing
Foreign currency derivatives		14			19		Research and development
Foreign currency derivatives		3			5		General and administrative
Foreign currency derivatives		3			(1	)	Other, net
Total before taxes		24			29
Tax amounts		(2	)		(4	)
Income after tax	$	22		$	25

	Amounts Reclassified out of AOCI or AOCL
	Six Months Ended June 30, 2015			Six Months Ended June 30, 2014			Affected Line Items in the Consolidated and Combined Statements of Operations
Gains (losses) on cash flow hedges:
Foreign currency derivatives	$	(5	)	$	11		Cost of revenues
Foreign currency derivatives		(2	)		5		Selling and marketing
Foreign currency derivatives		(34	)		54		Research and development
Foreign currency derivatives		(8	)		15		General and administrative
Foreign currency derivatives		2			30		Other, net
Total before taxes		(47	)		115
Tax amounts		5			(15	)
Income (loss) after tax	$	(42	)	$	100

Merger, Integration and Other Expenses

Merger, Integration and Other Expenses

Merger, integration and other expenses reflect the expenses incurred in (i) DG's Merger with Extreme Reach and our Spin-Off from DG, (ii) acquiring or disposing of a business, (iii) integrating an acquired operation (e.g., office closure costs) into the Company and (iv) certain other items of income or expense not deemed to be part of our core operations. A summary of our merger, integration and other expenses is as follows (in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
Description	2015			2014		2015			2014
Merger and Spin-Off (1)	$	—		$	581	$	—		$	4,738
Severance		142			357		466			558
Integration and restructuring costs		565			374		1,070			955
Acquisition, legal and due diligence fees		611			32		730			38
Recovery of TV business net assets (2)		(148	)		—		(262	)		—
Total	$	1,170		$	1,344	$	2,004		$	6,289

(1) - See discussion of Merger and Spin-Off under “Separation from Digital Generation, Inc.” in Note 1.

(2) - Represents a reduction in expense due to realizing more TV business net assets than originally estimated at the time of the Spin-Off.

Israel Operations

Israel Operations

The majority of our research and development activities and a large portion of our accounting functions are performed in Herzliya, Israel. In total, about 26% of our workforce is located in Israel.  As a result, we are subject to risks associated with operating in the Middle East.

Recently Issued Accounting Guidance

Recently Issued Accounting Guidance

In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 modifies revenue recognition guidance for GAAP. Previous revenue recognition guidance in GAAP comprised broad revenue recognition concepts together with numerous revenue requirements for particular industries or transactions, which sometimes resulted in different accounting for economically similar transactions. In contrast, International Accounting Standards Board ("IASB") provided limited guidance on revenue recognition. Accordingly, the FASB and IASB initiated a joint project to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and International Financial Reporting Standards ("IFRS"). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:  

        Step 1: Identify the contract(s) with a customer.

        Step 2: Identify the performance obligations in the contract.

        Step 3: Determine the transaction price.

        Step 4: Allocate the transaction price to the performance obligations in the contract.

        Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

For Sizmek, the amendments in ASU 2014-09 are presently effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and early adoption is not permitted.  An entity shall adopt the amendments in ASU 2014-09 by either (i) retrospectively adjusting each prior reporting period presented or (ii) retrospectively adjusting for the cumulative effect of initially applying ASU 2014-09 at the date of initial adoption. We have not as yet determined (i) the extent to which we expect ASU 2014-09 will impact our reported revenues or (ii) the manner in which it will be adopted.

In July 2015, the FASB affirmed its proposal to defer the effective date of the guidance in ASU 2014-09 for all entities by one year. As a result, if the proposal is formally adopted by the issuance of a new ASU, the new revenue standard (currently discussed in ASU 2014-09) would be effective for Sizmek for annual reporting periods beginning after December 15, 2017.  The FASB also affirmed its proposal to permit all entities to early adopt the guidance in the new revenue standard, but not before annual periods beginning after December 15, 2016.

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CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenues:
Platform related	$ 35,645	$ 39,440	$ 68,537	$ 74,266
Programmatic managed services	4,571	4,561	8,438	8,114
Total	40,216	44,001	76,975	82,380
Cost of revenues (excluding depreciation and amortization):
Platform related	11,175	12,126	22,010	24,031
Programmatic managed services	3,317	3,142	6,142	5,723
Total	14,492	15,268	28,152	29,754
Selling and marketing	15,433	14,514	29,636	30,102
Research and development	3,674	3,193	6,577	6,741
General and administrative	4,739	5,083	9,293	13,188
Merger, integration and other	1,170	1,344	2,004	6,289
Depreciation and amortization	7,771	6,449	15,210	12,977
Loss from operations	(7,063)	(1,850)	(13,897)	(16,671)
Other expense, net	366	205	1,345	208
Loss before income taxes	(7,429)	(2,055)	(15,242)	(16,879)
Provision (benefit) for income taxes	468	(413)	600	(819)
Net loss	$ (7,897)	$ (1,642)	$ (15,842)	$ (16,060)
Basic and diluted loss per common share	$ (0.27)	$ (0.05)	$ (0.53)	$ (0.53)
Weighted average common shares outstanding:
Basic and diluted	29,549	30,399	29,666	30,399

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Goodwill

6 Months Ended

Jun. 30, 2015

Goodwill [Abstract]

Goodwill

5. Goodwill

We operate as a single reporting unit. Changes in the carrying value of our goodwill for the six months ended June 30, 2015 were as follows (in thousands):

	Goodwill		Accumulated Impairment Losses			Net Carrying Value
Balance at December 31, 2014	$	380,681	$	(340,527	)	$	40,154
Acquisition of StrikeAd		11,134		—			11,134
Balance at June 30, 2015	$	391,815	$	(340,527	)	$	51,288

We evaluate goodwill for possible impairment each year on December 31st and whenever events or changes in circumstances indicate the carrying value of our goodwill may not be recoverable. Generally, the goodwill impairment test involves a two-step process.  In the first step, we compare the fair value of the Company to its carrying value. If the fair value of the Company exceeds its carrying value, goodwill is not impaired and no further testing is required. If the fair value of the Company is less than its carrying value, we must perform the second step of the impairment test to measure the amount of the impairment loss. In the second step, the Company's fair value is allocated to its assets and liabilities, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill in the same manner as if the Company was being acquired in a business combination. If the implied fair value of the Company's goodwill is less than the carrying value, the difference is recorded as an impairment loss.

During the third quarter of 2014, we determined that indicators of potential impairment existed requiring us to perform an interim goodwill impairment test.  As a result, we performed an extensive analysis to estimate the fair value of the Company using a discounted cash flow methodology.  The analysis concluded that the implied fair value of the Company's goodwill was $98.2 million less than its carrying value, which we recorded as a goodwill impairment loss during the third quarter of 2014.

ASC 350-20-35 allows an entity to assess qualitatively whether it is necessary to perform step one of the prescribed two-step annual goodwill impairment test. If an entity believes, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, the two-step goodwill impairment test is not required.  Since we had performed an extensive analysis of the fair value of the Company as of September 30, 2014, at December 31, 2014, we performed a qualitative assessment of our goodwill and determined that the two-step process was not necessary.  Further, at June 30, 2015, we are not aware of any events or changes in circumstances that would indicate the carrying value of our goodwill may not be recoverable.

Risk of Future Impairment

At December 31, 2014, based on our discounted cash flow model that uses our internal forecast, we determined the fair value of the Company was only slightly in excess of its carrying value. In preparing our discounted cash flow model, we made assumptions about future revenues and expenses for several periods to determine the cash flows that would result.

As with any forecast, there is substantial risk our forecasted cash flows may fall short of our current expectations. If actual or expected future cash flows should fall sufficiently below our current forecast, it is likely we would be required to record another goodwill impairment charge. Future net cash flows are impacted by a variety of factors including revenues, operating margins, capital expenditures, income tax rates, and a discount rate.

Further, the market value of our common stock plus a reasonable control premium is an indicator of the fair value of our Company. If the market value of our common stock should fall sufficiently below the current level for an extended period of time, it would likely cause us to conclude that our goodwill is impaired and we would be required to record another goodwill impairment charge.

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Acquisitions

6 Months Ended

Jun. 30, 2015

Acquisitions [Abstract]

Acquisitions

4. Acquisitions

StrikeAd

On May 28, 2015, we acquired substantially all the assets and operations, and assumed certain liabilities, of privately-held StrikeAd, Inc. and its affiliates (collectively, “StrikeAd”) for $10.3 million. The purchase price includes $7.7 million in cash paid at closing and deferred payment obligations totaling $2.6 million.  StrikeAd operates a mobile demand side platform (“DSP”) based in the United Kingdom.  We intend to combine the StrikeAd assets with our existing programmatic assets to build an end-to-end DSP for use by our customers.

The objective of the transaction was to accelerate the development of our mobile technology in order to better serve the advertising community. We expect to realize operating synergies from this transaction.  StrikeAd has been included in our results of operations since the date of closing.

The $10.3 million purchase price was preliminarily allocated to the assets acquired and liabilities assumed based upon their estimated fair values. For estimation purposes, we preliminarily allocated $4.3 million to developed technology, $1.1 million to customer relationships and $11.1 million to goodwill.  The developed technology and customer relationships acquired in the transaction are presently being amortized on a straight-line basis over 3.2 years and 5.7 years, respectively.  The weighted average amortization period is 3.7 years. The goodwill and other intangible assets created in the acquisition are deductible for tax purposes.  The acquired assets include $3.7 million of gross receivables, which we recognized at their estimated fair value of $3.5 million.  For 2014, StrikeAd reported revenues of $11.0 million and a loss before income taxes of $6.2 million.  For the period from the acquisition date through June 30, 2015, StrikeAd reported $0.8 million of revenues.  The purchase price allocation is preliminary pending the completion of the valuation analysis.

Pixel

On September 4, 2014, we acquired all of the outstanding shares of Zestraco Investments Limited including its wholly-owned subsidiary PixelCo. D.O.O. (“Pixel”) for $0.45 million in cash and a deferred payment obligation of $0.05 million which was paid in December 2014.  Pixel performed advertising service operations principally for us prior to our purchase and had no appreciable assets.

The objective of the transaction was to bring in-house the group of technology service personnel that had been providing advertising operations service to us through a contract.  We expect to realize operating synergies from this transaction.  Pixel has been included in our results of operations since the date of closing. The $0.5 million purchase price was allocated to goodwill and is not deductible for income tax purposes.  The purchase price allocation is final.

Aerify Media

On August 11, 2014, we acquired substantially all the assets and operations of privately-held Aerify Media LLC (“Aerify”), a firm specializing in mobile tracking and retargeting, for $5.625 million in cash and a $0.625 million deferred payment obligation due in one-year.  Aerify's mobile in-app and web tracking technology expands our capabilities in the fast-growing mobile segment, adding both talent and technology to the platform. 

The objective of the transaction was to accelerate the development of our mobile technology in order to better serve the advertising community. We expect to realize operating synergies from this transaction.  Aerify has been included in our results of operations since the date of closing.

The $6.25 million purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values. We allocated $2.05 million to developed technology, $0.4 million to customer relationships and $3.8 million to goodwill.  The developed technology and customer relationships acquired in the transaction are being amortized on a straight-line basis over 4 years and 5 years, respectively. The weighted average amortization period is 4.2 years. The goodwill and other intangible assets created in the acquisition are deductible for tax purposes.  For 2013, Aerify reported revenues of $3.1 million and a loss before income taxes of $0.6 million.  The purchase price allocation is final.

Purchase Price Allocations

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the respective dates of acquisition for the above referenced transactions (in millions).

Category	StrikeAd (preliminary)			Pixel		Aerify
Cash	$	0.1		$	—	$	—
Receivables		3.5			—		—
Other current assets		0.1			—		—
Customer relationships		1.1			—		0.4
Developed technology		4.3			—		2.1
Goodwill		11.1			0.5		3.8
Total assets acquired		20.2			0.5		6.3
Less liabilities assumed		(9.9	)		—		—
Net assets acquired	$	10.3		$	0.5	$	6.3

Pro Forma Information

The following pro forma information presents our results of operations for the six months ended June 30, 2015 and 2014 as if the acquisitions of StrikeAd, Pixel and Aerify had occurred on January 1, 2014 (in thousands). A table of actual amounts is provided for reference.

	As Reported Six Months Ended June 30,						Unaudited Pro Forma Six Months Ended June 30,
	2015			2014			2015			2014
Revenue	$	76,975		$	82,380		$	80,528		$	88,792
Net loss		(15,842	)		(16,060	)		(18,161	)		(19,009	)

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Share-based Compensation (Tables)

6 Months Ended

Jun. 30, 2015

Share-based Compensation [Abstract]

Summary of share-based compensation expense

	Six Months Ended June 30,
Description	2015		2014
DG stock options and RSUs awarded to our employees	$	—	$	2,650
DG share-based awards allocated to us as part of corporate services		—		3,817
Sizmek share-based awards granted		1,903		1,066
Total	$	1,903	$	7,533

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General (Tables)

6 Months Ended

Jun. 30, 2015

General [Abstract]

Schedule of DG's assets and liabilities outstanding

Description	June 30, 2015		December 31, 2014
Current assets of television business:
Income tax receivables	$	1,110	$	1,943
Trade accounts receivable	—		367
Springbox revenue sharing	160		160
Total	$	1,270	$	2,470
Current liabilities of television business:
Trade accounts payable	$	206	$	165
Accrued liabilities	—		230
Total	$	206	$	395
Non-current liabilities of television business:
Uncertain tax positions	$	273	$	260

Schedule of gains and losses recognized in consolidated results of operations due to hedging activities

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015			2014
Hedging gain (loss) recognized in operations	$	24	$	29	$	(47	)	$	115

Schedule of components of accumulated other comprehensive income (loss) ("AOCI" or "AOCL"), net of tax

	Three Months Ended June 30, 2015
	Foreign Currency Translation			Unrealized Gains (Losses) on Foreign Currency Derivatives			Unrealized Gains (Losses) on Available for Sale Securities			Total Accumulated Other Comprehensive Income (Loss)
Balance at March 31, 2015	$	(3,476	)	$	(193	)	$	1,027		$	(2,642	)
Other comprehensive income (loss) before reclassifications		580			491			(6	)		1,065
Amounts reclassified out of AOCL		—			(22	)		—			(22	)
Net current period activity		580			469			(6	)		1,043
Balance at June 30, 2015	$	(2,896	)	$	276		$	1,021		$	(1,599	)

	Six Months Ended June 30, 2015
	Foreign Currency Translation			Unrealized Gains (Losses) on Foreign Currency Derivatives			Unrealized Gains (Losses) on Available for Sale Securities			Total Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2014	$	(2,672	)	$	(98	)	$	1,255		$	(1,515	)
Other comprehensive income (loss) before reclassifications		(224	)		332			(234	)		(126	)
Amounts reclassified out of AOCL		—			42			—			42
Net current period activity		(224	)		374			(234	)		(84	)
Balance at June 30, 2015	$	(2,896	)	$	276		$	1,021		$	(1,599	)

	Three Months Ended June 30, 2014
	Foreign Currency Translation			Unrealized Gains (Losses) on Foreign Currency Derivatives			Unrealized Gains (Losses) on Available for Sale Securities		Total Accumulated Other Comprehensive Income (Loss)
Balance at March 31, 2014	$	(1,101	)	$	39		$	1,030	$	(32	)
Other comprehensive income (loss) before reclassifications		375			10			770		1,155
Amounts reclassified out of AOCL		—			(25	)		—		(25	)
Net current period activity		375			(15	)		770		1,130
Balance at June 30, 2014	$	(726	)	$	24		$	1,800	$	1,098

	Six Months Ended June 30, 2014
	Foreign Currency Translation			Unrealized Gains (Losses) on Foreign Currency Derivatives			Unrealized Gains (Losses) on Available for Sale Securities		Total Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2013	$	(1,198	)	$	116		$	1,764	$	682
Other comprehensive income (loss) before reclassifications		472			8			36		516
Amounts reclassified out of AOCI		—			(100	)		—		(100	)
Net current period activity		472			(92	)		36		416
Balance at June 30, 2014	$	(726	)	$	24		$	1,800	$	1,098

Summary of reclassifications from accumulated other comprehensive income (loss) to the consolidated and combined statements of operations

	Amounts Reclassified out of AOCI or AOCL
	Three Months Ended June 30, 2015			Three Months Ended June 30, 2014			Affected Line Items in the Consolidated and Combined Statements of Operations
Gains (losses) on cash flow hedges:
Foreign currency derivatives	$	3		$	4		Cost of revenues
Foreign currency derivatives		1			2		Selling and marketing
Foreign currency derivatives		14			19		Research and development
Foreign currency derivatives		3			5		General and administrative
Foreign currency derivatives		3			(1	)	Other, net
Total before taxes		24			29
Tax amounts		(2	)		(4	)
Income after tax	$	22		$	25

	Amounts Reclassified out of AOCI or AOCL
	Six Months Ended June 30, 2015			Six Months Ended June 30, 2014			Affected Line Items in the Consolidated and Combined Statements of Operations
Gains (losses) on cash flow hedges:
Foreign currency derivatives	$	(5	)	$	11		Cost of revenues
Foreign currency derivatives		(2	)		5		Selling and marketing
Foreign currency derivatives		(34	)		54		Research and development
Foreign currency derivatives		(8	)		15		General and administrative
Foreign currency derivatives		2			30		Other, net
Total before taxes		(47	)		115
Tax amounts		5			(15	)
Income (loss) after tax	$	(42	)	$	100

Summary of merger, integration and other expenses

	Three Months Ended June 30,					Six Months Ended June 30,
Description	2015			2014		2015			2014
Merger and Spin-Off (1)	$	—		$	581	$	—		$	4,738
Severance		142			357		466			558
Integration and restructuring costs		565			374		1,070			955
Acquisition, legal and due diligence fees		611			32		730			38
Recovery of TV business net assets (2)		(148	)		—		(262	)		—
Total	$	1,170		$	1,344	$	2,004		$	6,289

(1) - See discussion of Merger and Spin-Off under “Separation from Digital Generation, Inc.” in Note 1.

(2) - Represents a reduction in expense due to realizing more TV business net assets than originally estimated at the time of the Spin-Off.

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Loss per Share

6 Months Ended

Jun. 30, 2015

Loss per Share [Abstract]

Loss per Share

8.  Loss per Share

Basic earnings (loss) per common share excludes dilution and is calculated by dividing net earnings (loss) by the weighted-average number of common shares outstanding during the period.  Diluted earnings (loss) per common share is calculated by dividing net earnings (loss) by the weighted-average number of common shares outstanding during the period, as adjusted for the potential dilutive effect of non-participating share-based awards such as stock options and RSUs.

On February 7, 2014, 30.4 million shares of our common stock were distributed to DG stockholders in conjunction with the Spin-Off.  For comparative purposes, and to provide a more meaningful calculation of the weighted-average shares outstanding, we have assumed this amount to be outstanding for any period presented prior to the Spin-Off in the calculation of weighted-average shares outstanding.

The following table presents our loss per common share for the three and six months ended June 30, 2015 and 2014 (in thousands, except per share data):

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Net loss	$	(7,897	)	$	(1,642	)	$	(15,842	)	$	(16,060	)
Weighted average common shares outstanding — basic		29,549			30,399			29,666			30,399
Dilutive securities		—			—			—			—
Weighted average common shares outstanding - diluted		29,549			30,399			29,666			30,399
Basic and diluted loss per common share	$	(0.27	)	$	(0.05	)	$	(0.53	)	$	(0.53	)
Antidilutive securities not included:
Stock options and RSUs		1,268			864			1,266			503

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Share-based Compensation

6 Months Ended

Jun. 30, 2015

Share-based Compensation [Abstract]

Share-based Compensation

6.  Share-based Compensation

Prior to our Spin-Off from DG on February 7, 2014, certain of our employees participated in DG's equity based incentive programs.  Share-based compensation expense reflected in the accompanying financial statements up until February 7, 2014 relates to DG's stock plan awards and not to our stock awards.  Immediately prior to completing the Spin-Off transaction, all outstanding equity awards became fully vested and were converted into shares of DG Common Stock to the extent the award had an intrinsic value. Equity awards with no intrinsic value were cancelled.  DG's equity incentive plans were terminated in connection with the Merger Agreement (see Note 1).  Below is a summary of our share-based compensation expense related to the stock awards (in thousands):

	Six Months Ended June 30,
Description	2015		2014
DG stock options and RSUs awarded to our employees	$	—	$	2,650
DG share-based awards allocated to us as part of corporate services		—		3,817
Sizmek share-based awards granted		1,903		1,066
Total	$	1,903	$	7,533

In the first quarter of 2015, Sizmek's Compensation Committee granted (i) 159,245 performance-based restricted stock units (“RSUs”), (ii) 192,867 time-based RSUs and (iii) 133,600 time-based stock options, to certain of our employees and directors.  The RSUs and stock options expected to vest were valued at $2.8 million and $0.6 million, respectively.  The awards (i) vest over periods ranging from one to three years, (ii) are subject to the employees' continued employment with us or the director's continued service on our Board of Directors, and (iii) with respect to the performance-based RSUs, are subject to reaching certain (a) revenue, (b) adjusted EBITDA and (c) free cash flow growth targets (i.e., performance conditions).

In the second quarter of 2015, Sizmek's Compensation Committee granted (i) 87,251 performance-based RSUs, (ii) 361,112 time-based RSUs and (iii) 86,175 time-based stock options to certain of our employees.  The RSUs and stock options expected to vest were valued at $3.4 million and $0.4 million, respectively.  The awards (i) vest over periods ranging from one to three years, (ii) are subject to the employees' continued employment with us, and (iii) with respect to the performance-based RSUs, are subject to reaching certain (a) revenue, (b) adjusted EBITDA and (c) free cash flow growth targets (i.e., performance conditions).

Generally, the awards granted in 2015 vest on an accelerated basis upon the occurrence of the holder's (a) death, (b) termination by reason of disability, (c) termination without Cause (as defined) following a Change of Control (as defined) or (d) resignation for Good Reason (as defined) following a Change in Control.  Unrecognized compensation costs related to unvested RSUs and stock options were $7.7 million at June 30, 2015.

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Income Taxes

6 Months Ended

Jun. 30, 2015

Income Taxes [Abstract]

Income Taxes

7.  Income Taxes

For the six months ended June 30, 2015, our effective tax rate was (3.9)% compared to 4.9% for the six months ended June 30, 2014.  The effective tax rates for each period differ from the expected federal statutory rate of 35.0% as a result of state and foreign income taxes; certain non-deductible expenses; and changes in our valuation allowances in the U.S. and state jurisdictions within the U.S.  In the U.S. and state jurisdictions within the U.S., we have historically experienced tax losses.  As a result, we do not recognize a tax benefit in the U.S. or state jurisdictions within the U.S. when we incur taxable losses as realization of those tax benefits is not likely.  Conversely, in certain foreign jurisdictions we report taxable income and pay tax on that income in accordance with the tax statutes of those jurisdictions.

We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than not sustain the position following an audit.  For tax positions meeting the more-likely-than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.  During the six months ended June 30, 2015, there were no additional uncertain tax positions. Interest and penalties related to uncertain tax positions are recognized in income tax expense.  For each of the six month periods ended June 30, 2015 and 2014, we recognized less than $0.1 million of interest or penalties related to uncertain tax positions in our financial statements. The changes in uncertain tax positions for the six months ended June 30, 2015 and 2014 were as follows (in thousands):

	Six Months Ended June 30,
	2015		2014
Balance at beginning of year	$	1,507	$	1,701
Additions for tax positions related to prior years		39		—
Balance at end of period	$	1,546	$	1,701

If we reduced our reserve for uncertain tax positions, it would result in our recognition of a tax benefit.

As of June 30, 2015, we provided a valuation allowance against substantially all of our U.S. and state NOL carryforwards as ultimate realization of these NOLs was not determined to be more-likely-than not.  Accordingly, we have NOL carryforwards available to us (should we have sufficient future taxable income to utilize them) that are not reflected in our consolidated balance sheets at June 30, 2015 and December 31, 2014.

We are subject to U.S. federal income tax, income tax from multiple foreign jurisdictions including Israel and the United Kingdom, and income taxes of multiple state jurisdictions. U.S. federal, state and local income tax returns for 2011 through February 7, 2014 remain open to examination. Israeli and United Kingdom income tax returns remain open to examination for 2010 through 2014 and 2009 through 2014, respectively. Prior to our Spin-Off, our operating results had been included in DG's U.S. federal and state tax returns or tax returns of non-U.S. jurisdictions. Subsequent to our Spin-Off, we file stand-alone income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various foreign jurisdictions. Prior to our Spin-Off, we entered into a tax matters agreement with DG that governs the parties' respective rights, responsibilities and obligations with respect to taxes. The tax matters agreement generally provides that the filing of tax returns, the control of audit proceedings, and the payment of any additional tax liability relative to DG and its consolidated subsidiaries for periods prior to February 8, 2014 is our responsibility.

We do not provide deferred taxes on the undistributed earnings of our non-U.S. subsidiaries in situations where our intention is to reinvest such earnings indefinitely. Furthermore, we believe both our U.S. and non-U.S. subsidiaries have significant net assets, liquidity, and other financial resources available to meet their operational and capital investment requirements.

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Geographical Information and Product Categories

6 Months Ended

Jun. 30, 2015

Geographical Information and Product Categories [Abstract]

Geographical Information and Product Categories

9.  Geographical Information and Product Categories

We have one operating segment. Our chief operating decision maker is considered to be our Chief Executive Officer. The chief operating decision maker allocates resources and assesses performance of the business and other activities at the operating segment level.

The following table summarizes our revenues by geographic area (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Revenues:
United States	$	20,975	$	19,779	$	40,575	$	38,541
Europe, Middle East and Africa		11,821		14,647		21,171		25,627
Asia Pacific		5,177		6,339		11,071		12,412
Latin America		1,398		2,203		2,749		3,716
North America (excluding U.S.)		845		1,033		1,409		2,084
Total	$	40,216	$	44,001	$	76,975	$	82,380

For the six months ended June 30, 2015, about 47% of our revenues were attributable to foreign jurisdictions. However, no one country other than the United States represented more than 10% of our consolidated revenues.

The following table summarizes our revenues by product category (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Revenues:
Core products	$	28,160	$	27,685	$	53,424	$	51,089
Rich media		7,485		11,755		15,113		23,177
Programmatic managed services		4,571		4,561		8,438		8,114
Total	$	40,216	$	44,001	$	76,975	$	82,380

The following table summarizes our long-lived assets by country (in thousands):

	June 30, 2015		December 31, 2014
Long-Lived Assets:
Israel	$	29,403	$	24,818
United States		7,717		7,181
Other countries		1,951		2,037
Total	$	39,071	$	34,036

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General (Merger, Integration And Other Expenses) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
General [Abstract]
Merger and Spin-Off	[1]		$ 581		$ 4,738
Severance		$ 142	357	$ 466	558
Integration and restructuring costs		565	374	1,070	955
Acquisition, legal and due diligence fees		611	$ 32	730	$ 38
Recovery of TV business net assets	[2]	(148)		(262)
Total		$ 1,170	$ 1,344	$ 2,004	$ 6,289

[1] See discussion of Merger and Spin-Off under “Separation from Digital Generation, Inc.” in Note 1.

[2] Represents a reduction in expense due to realizing more TV business net assets than originally estimated at the time of the Spin-Off.

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Related Party Transactions (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
DG's Expense Allocation to Sizmek
Management and administrative services		$ 637
Merger, integration and other		4,038
Share-based compensation		3,817
Total		$ 8,492

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2015

Acquisitions [Abstract]

Summary of the estimated fair values of the assets acquired and liabilities assumed

Category	StrikeAd (preliminary)			Pixel		Aerify
Cash	$	0.1		$	—	$	—
Receivables		3.5			—		—
Other current assets		0.1			—		—
Customer relationships		1.1			—		0.4
Developed technology		4.3			—		2.1
Goodwill		11.1			0.5		3.8
Total assets acquired		20.2			0.5		6.3
Less liabilities assumed		(9.9	)		—		—
Net assets acquired	$	10.3		$	0.5	$	6.3

Schedule of as reported and pro forma results of operations relating to acquisitions

	As Reported Six Months Ended June 30,						Unaudited Pro Forma Six Months Ended June 30,
	2015			2014			2015			2014
Revenue	$	76,975		$	82,380		$	80,528		$	88,792
Net loss		(15,842	)		(16,060	)		(18,161	)		(19,009	)

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Geographical Information and Product Categories (Tables)

6 Months Ended

Jun. 30, 2015

Geographical Information and Product Categories [Abstract]

Schedule of revenues by geographic area

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Revenues:
United States	$	20,975	$	19,779	$	40,575	$	38,541
Europe, Middle East and Africa		11,821		14,647		21,171		25,627
Asia Pacific		5,177		6,339		11,071		12,412
Latin America		1,398		2,203		2,749		3,716
North America (excluding U.S.)		845		1,033		1,409		2,084
Total	$	40,216	$	44,001	$	76,975	$	82,380

Schedule of revenues by product category

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Revenues:
Core products	$	28,160	$	27,685	$	53,424	$	51,089
Rich media		7,485		11,755		15,113		23,177
Programmatic managed services		4,571		4,561		8,438		8,114
Total	$	40,216	$	44,001	$	76,975	$	82,380

Schedule of long-lived assets by country

	June 30, 2015		December 31, 2014
Long-Lived Assets:
Israel	$	29,403	$	24,818
United States		7,717		7,181
Other countries		1,951		2,037
Total	$	39,071	$	34,036

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Geographical Information and Product Categories (Revenues By Product Category) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Geographical information [Line Items]
Revenues	$ 40,216	$ 44,001	$ 76,975	$ 82,380
Core products [Member]
Geographical information [Line Items]
Revenues	28,160	27,685	53,424	51,089
Rich media [Member]
Geographical information [Line Items]
Revenues	7,485	11,755	15,113	23,177
Programmatic managed services [Member]
Geographical information [Line Items]
Revenues	$ 4,571	$ 4,561	$ 8,438	$ 8,114

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Acquisitions (Schedule of as Reported and Pro forma Results of Operations Relating to Acquisitions) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
As Reported
Revenues	$ 40,216	$ 44,001	$ 76,975	$ 82,380
Net loss	$ (7,897)	$ (1,642)	(15,842)	(16,060)
Unaudited Pro Forma, as if the acquisitions had occurred on January 1, 2014
Revenue			80,528	88,792
Net loss			$ (18,161)	$ (19,009)

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CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE LOSS [Abstract]
Net loss	$ (7,897)	$ (1,642)	$ (15,842)	$ (16,060)
Other comprehensive income (loss):
Unrealized gain (loss) on derivatives, net of tax	469	(15)	374	(92)
Unrealized gain (loss) on available for sale securities, net of tax	(6)	770	(234)	36
Foreign currency translation adjustment	580	375	(224)	472
Total other comprehensive income (loss)	1,043	1,130	(84)	416
Total comprehensive loss	$ (6,854)	$ (512)	$ (15,926)	$ (15,644)

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Fair Value Measurements

6 Months Ended

Jun. 30, 2015

Fair Value Measurements [Abstract]

Fair Value Measurements

3. Fair Value Measurements

ASC 820, Fair Value Measurement, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.

ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

• Level 1—Quoted prices in active markets for identical assets or liabilities.

• Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

• Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

We have classified our assets and liabilities that are measured at fair value on a recurring basis (at least annually) into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date.

The tables below set forth by level, assets and liabilities that were accounted for at fair value as of June 30, 2015 and December 31, 2014. The carrying values of our accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these financial instruments. The tables do not include cash on hand or assets and liabilities that are measured at historical cost or any basis other than fair value (in thousands).

		Fair Value Measurements at June 30, 2015
	Balance Sheet Location	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
Assets:
Money market funds	(a)	$	28,964	$	—	$	—	$	28,964
Currency forward derivatives / options	(b)		—		319		—		319
Revenue sharing arrangement	(c)		—		—		160		160
Marketable equity securities	(d)		1,362		—		—		1,362
Total		$	30,326	$	319	$	160	$	30,805

		Fair Value Measurements at December 31, 2014
	Balance Sheet Location	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
Assets:
Money market funds	(a)	$	35,953	$	—	$	—	$	35,953
Revenue sharing arrangement	(c)		—		—		160		160
Marketable equity securities	(d)		1,596		—		—		1,596
Total		$	37,549	$	—	$	160	$	37,709
Liabilities:
Currency forward derivatives / options	(e)	$	—	$	113	$	—	$	113

(a) Included in cash and cash equivalents.

(b) Included in other current assets.

(c) Included in current assets of TV business.

(d) Included in other non-current assets.

(e) Included in accrued liabilities.

The fair value of our money market funds was determined based upon quoted market prices. The currency forward derivatives/options are derivative instruments whose value is based upon quoted market prices from various market participants. We have a zero cost basis in these derivative instruments. Our marketable equity securities relate to a single issuer and have a cost basis of $0.3 million.

In connection with our Spin-Off from DG, DG contributed a revenue sharing asset to us that resulted from DG's sale of its Springbox unit. We are entitled to a percentage of the revenues collected by the business for three years after the closing date (June 1, 2012). Revenue sharing payments are generally made once a year. We have estimated the future revenues of Springbox based on the historical revenues and certain other factors, discounted to their present value. The following table provides a reconciliation of changes in the fair values of our Level 3 assets (in thousands):

	Revenue Sharing Arrangement
	Six Months Ended June 30, 2015
Balance at beginning of year	$	160
Additions	—
Balance at end of period	$	160

In connection with an acquisition of a business, we sometimes include a contingent consideration component of the purchase price based on (i) future revenues or (ii) future revenues and operating results (e.g., adjusted EBITDA), that require minimum thresholds be met before any earnout payment becomes due. Accordingly, there can be significant volatility in the earnout liability. Each reporting period, we review our estimates of the performance indicators (e.g., revenue, adjusted EBITDA) and the corresponding earnout levels achieved, discounted to their present values. The change in fair value is recorded in cost of revenues in the accompanying statements of operations.

In connection with our acquisition of Republic Project, we agreed to make additional payments to the sellers if Republic's 2014 or 2015 revenues and adjusted EBITDA exceeded certain levels. As of June 30, 2015, we do not expect to make any payments with respect to the Republic Project contingent consideration arrangement.

Abakus Convertible Notes

In May 2014, we purchased $1.0 million of Abakus convertible promissory notes ("Convertible Notes") for $1.0 million. The Convertible Notes are due 90 days after written notice after the earlier of (i) May 30, 2016 or (ii) an occurrence of an Event of Default (as defined in the Convertible Notes). Abakus is a small private company that has developed a digital attribution software solution. The Convertible Notes bear interest at 5% per annum payable at maturity. The Convertible Notes are convertible into Abakus Series A Preferred Stock ("Series A Preferred") as follows:

a) Automatic conversion if Abakus sells $2.0 million of Series A Preferred ("Qualified Financing"), whereupon the Convertible Notes shall be converted, at Sizmek's option, at either (i) 75% of the share price in the Qualified Financing, or (ii) the quotient of $7.0 million divided by the number of shares outstanding upon exercise of all dilutive securities, or

b) Optional conversion at Sizmek's election if Abakus completes an Equity Financing (as defined in the Convertible Notes) that is not a Qualified Financing, whereupon the Convertible Notes shall be converted at 75% of the share price in the Equity Financing.

In addition, upon a Change in Control, as defined in the Convertible Notes, the Convertible Notes shall be paid off at the greater of (i) the outstanding balance, or (ii) the amount the holder would have received upon conversion of the Convertible Notes. The Convertible Notes are considered held-to-maturity securities and are carried at amortized cost. The fair value of the Convertible Notes is not readily determinable. We are not aware of a market for the Convertible Notes. The Convertible Notes are included in other non-current assets.

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Related Party Transactions(Tables)

6 Months Ended

Jun. 30, 2015

Related Party Transactions [Abstract]

Schedule of allocation of related party expenses

DG's Expense Allocation to Sizmek	Six Months Ended June 30, 2014
Management and administrative services	$	637
Merger, integration and other	4,038
Share-based compensation	3,817
Total	$	8,492

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Fair Value Measurements (Abakus Convertible Notes) (Details) - Convertible Notes [Member] - Abakus [Member] - USD ($) $ in Millions	1 Months Ended	14 Months Ended
	May. 31, 2014	Jun. 30, 2015
Fair Value Measurements [Line Items]
Amount of convertible notes purchased	$ 1.0
Payment for convertible notes	$ 1.0
Period of time convertible notes are due after written notice		90 days
Interest rate		5.00%
Amount of Abakus Series A preferred shares to be sold by Abakus for triggering automatic conversion		$ 2.0
Conversion price as a percentage of the share price in Qualified Financing		75.00%
Amount divided by the number of shares outstanding upon exercise of all dilutive securities to derive quotient for determining conversion price upon automatic conversion		$ 7.0
Conversion price as a percentage of the share price in the Equity Financing		75.00%

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value Measurements [Abstract]

Schedule of assets and liabilities accounted for at fair value

		Fair Value Measurements at June 30, 2015
	Balance Sheet Location	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
Assets:
Money market funds	(a)	$	28,964	$	—	$	—	$	28,964
Currency forward derivatives / options	(b)		—		319		—		319
Revenue sharing arrangement	(c)		—		—		160		160
Marketable equity securities	(d)		1,362		—		—		1,362
Total		$	30,326	$	319	$	160	$	30,805

		Fair Value Measurements at December 31, 2014
	Balance Sheet Location	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements
Assets:
Money market funds	(a)	$	35,953	$	—	$	—	$	35,953
Revenue sharing arrangement	(c)		—		—		160		160
Marketable equity securities	(d)		1,596		—		—		1,596
Total		$	37,549	$	—	$	160	$	37,709
Liabilities:
Currency forward derivatives / options	(e)	$	—	$	113	$	—	$	113

(a) Included in cash and cash equivalents.

(b) Included in other current assets.

(c) Included in current assets of TV business.

(d) Included in other non-current assets.

(e) Included in accrued liabilities.

Schedule of reconciliation of changes in the fair values of Level 3 assets

	Revenue Sharing Arrangement
	Six Months Ended June 30, 2015
Balance at beginning of year	$	160
Additions	—
Balance at end of period	$	160