Core Insights - Groupon's shares surged 37% following a better-than-expected earnings report and progress in its turnaround strategy [1] Financial Performance - Groupon reported a fourth-quarter net loss per share of $1.20 on total revenue of $130.4 million, exceeding analyst expectations [2] - Adjusted earnings were $18.7 million, which was $800,000 higher than estimates [2] - North America Local Billings grew by 8% in the fourth quarter, marking a recovery after a challenging third quarter [2] Future Outlook - Management anticipates full-year revenue for 2025 to be flat to 2% higher, surpassing estimates [3] - Expected adjusted earnings for 2025 are projected to be between $70 million and $75 million, with free cash flow of at least $41 million [3] Strategic Transformation - Under CEO Dusan Senkypl, Groupon has streamlined its operations and is focused on returning to growth after recent struggles [4] - The stock is trading at approximately 13 times forward earnings, indicating it is not overly expensive despite recent gains [4]

Financial Data and Key Metrics Changes - In Q4 2024, Groupon reported an 8% growth in North America Local billings, recovering from a 19% decline in 2022 [10][12] - The company generated $69 million in adjusted EBITDA and $41 million in free cash flow for the full year, marking its first positive free cash flow since exiting the pandemic [11][12] - The cash position improved to $229 million compared to the previous year [14] Business Line Data and Key Metrics Changes - North America Local saw a return to 8% billing growth in Q4, while International Local (excluding Italy) grew billings by 2% [13] - Key verticals such as Things to Do, enterprise brands, and gifting experienced double-digit growth [13] Market Data and Key Metrics Changes - The top five metro areas in North America experienced double-digit growth in Q4, attributed to targeted strategies [26][28] - Internationally, positive trends were noted in major markets including Spain, the U.K., France, and Germany, which collectively account for approximately 80% of international local business [83] Company Strategy and Development Direction - Groupon's 2025 strategy focuses on winning in key markets through a city-by-city approach, prioritizing high-impact categories like Things to Do, beauty and wellness, and gifting [14] - The company aims to enhance customer retention through improved personalization and boost merchant success with enhanced tools [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to sustained growth in 2025, with a focus on improving platform stability and customer retention [14][96] - The company acknowledged challenges in Q3 due to technical migrations but noted a strong rebound in Q4 [12][19] Other Important Information - Gifting has gained importance, with double-digit shares of orders during the peak holiday season, although still below the long-term goal of 50% [77][79] - The impact of recent U.S. tariffs is expected to be minimal, as most of Groupon's business is focused on local experiences rather than goods [92] Q&A Session Summary Question: What drove the local growth in the U.S.? - Management attributed the turnaround to improved platform stability and a shift towards a curated marketplace focusing on quality rather than quantity [19][20] Question: Were any lost loyal customers recovered? - Management noted improvements in platform stability contributed to recovering some of the lost cohort, leading to better overall results [22] Question: What drove the strength in the top five metro areas? - The growth was a result of targeted strategies and building market management capabilities [28][30] Question: Does the guidance include continued customer growth? - The plan expects slight improvements in customer acquisition and retention [40] Question: What critical investments are being made to drive purchase frequency? - Management highlighted the introduction of "wow deals" and improved communication with customers post-purchase as key strategies [49][50] Question: How is the company attracting higher quality merchants? - The strategy involves a consultative sales approach and focusing on high-quality deals rather than deep discounts [66][68] Question: Will Groupon see counter-cyclical tailwinds if consumer pressure increases? - Management believes Groupon will be attractive to merchants with excess capacity and to consumers seeking value [72] Question: What metrics are available regarding gifting improvements? - Gifting has shown significant improvement, particularly during the holiday season, although specific numbers were not disclosed [77] Question: What are the drivers of growth in international markets? - Positive trends were noted in Spain, the U.K., France, and Germany, with a focus on optimizing supply and marketing [85] Question: How is employee turnover being managed? - Management acknowledged high turnover in sales but emphasized a strong performance-based compensation structure to retain top salespeople [88] Question: What is the expected impact of U.S. tariffs? - The impact is expected to be minimal, as most revenue comes from local experiences rather than goods [92] Question: What is the relationship between user engagement and growth? - Improved conversion rates and effective marketing strategies have driven growth, with a focus on increasing transaction frequency [96][99]

Core Insights - Groupon reported its financial results for Q4 and the fiscal year 2024, highlighting a flat local revenue in North America for Q4 and a modest growth in local billings by 8% [1][2] - The company achieved a positive operating cash flow of $55.9 million and free cash flow of $40.6 million for the trailing twelve months [1] - Groupon's CEO emphasized the successful execution of the transformation strategy, returning North America Local to growth and generating positive free cash flow for the first time since the pandemic [2] Financial Performance - North America Q4 Local Revenue remained flat, while Local Billings increased by 8% [1] - For the full year 2024, North America Local Revenue grew by 1% and Local Billings by 3% [1] - The company reported a positive operating cash flow of $55.9 million and free cash flow of $40.6 million for the trailing twelve months [1] Strategic Outlook - The CEO noted a rebound in Q4 following a challenging Q3, indicating a stronger foundation for growth entering 2025 [2] - The company aims to accelerate growth based on the momentum gained in the fourth quarter [2]

Revenue Performance - Full year 2024 revenue was $492.6 million, down 4% compared to $514.9 million in 2023[4] - Full year gross billings totaled $1.6 billion, down 5% from $1.65 billion in 2023[3] - Fourth quarter 2024 revenue was $130.4 million, down 5% compared to the prior year period[6] - Revenue for Q4 2024 was $130,379,000, a decrease of 5.4% from $137,716,000 in Q4 2023[36] - Total revenue for Q4 2024 was $137.7 million, reflecting a decline of 5.3% compared to the previous year[41] Customer Metrics - Active customers as of December 31, 2024, were 15.4 million, a decrease of 6% year-over-year[6] - Active customers in North America remained stable at 10.3 million in Q4 2024, while international active customers decreased to 5.1 million[42] Profitability and Loss - Fourth quarter 2024 net loss was $50.1 million, compared to net income of $28.5 million in the prior year period[6] - Net loss attributable to Groupon, Inc. for Q4 2024 was $50,649,000, compared to a net income of $27,702,000 in Q4 2023[36] - Net income for Q4 2024 was a loss of $50,118 thousand, compared to a profit of $28,489 thousand in Q4 2023[38] - The company reported a basic net loss per share of $1.20 for Q4 2024, compared to a net income per share of $0.87 in Q4 2023[36] Operating Performance - Fourth quarter 2024 adjusted EBITDA was $18.7 million, down from $26.9 million in the prior year period[6] - Contribution profit for Q4 2024 was $75.6 million, down 14.0% year-over-year[41] - Adjusted EBITDA for Q4 2023 was $26,938, decreasing to $18,661 in Q4 2024[46] Cash Flow and Liquidity - Operating cash flow for the full year 2024 was $55.9 million, with free cash flow of $40.6 million[4] - The company exited Q4 2024 with $228.8 million in cash and cash equivalents[6] - Cash and cash equivalents increased to $228,843,000 in Q4 2024, compared to $141,563,000 in Q4 2023, a significant increase of 61.5%[34] - Free cash flow for Q4 2024 was $63.2 million, representing a 23.6% increase year-over-year[41] - Total net cash provided by operating activities for Q4 2024 was $66,963 thousand, an increase from $54,500 thousand in Q4 2023[38] Expenses - Operating expenses increased to $115,535,000 in Q4 2024, up from $104,657,000 in Q4 2023, representing a rise of 10.4%[36] - Marketing expenses for Q4 2024 were $42,620,000, an increase of 23.5% from $34,492,000 in Q4 2023[36] - Total depreciation and amortization for the year ended December 31, 2024 was $27,889 thousand, down from $43,401 thousand in 2023[38] - Depreciation and amortization expenses decreased from $10,902 in Q4 2023 to $6,504 in Q4 2024[46] Assets and Liabilities - Total current assets rose to $315,361,000 as of December 31, 2024, compared to $255,583,000 at the end of 2023, an increase of 23.4%[34] - Total liabilities decreased to $571,639,000 as of December 31, 2024, down from $611,268,000 at the end of 2023, a reduction of 6.5%[34] - The company’s total assets increased to $612,690,000 as of December 31, 2024, compared to $570,956,000 at the end of 2023, an increase of 7.1%[34] Segment Performance - North America Local billings grew 8% in Q4 2024, indicating a rebound from previous quarters[2] - The North America segment reported gross billings of $300.3 million in Q4 2024, with a year-over-year growth of 1.8%[41] - International segment gross billings totaled $136.1 million in Q4 2024, reflecting a decline of 8.7% year-over-year[41] - International revenue in Q4 2024 was $33.7 million, down 11% year-over-year, primarily due to exiting the Local business in Italy[13] Other Financial Metrics - Stock-based compensation for Q4 2024 was $9,052 thousand, significantly higher than $710 thousand in Q4 2023[38] - The company recorded a foreign currency gain of $34,837 thousand in Q4 2024, compared to a loss of $14,633 thousand in Q4 2023[38] - Net cash used in investing activities for Q4 2024 was $(3,742) thousand, a decrease from net cash provided of $15,568 thousand in Q4 2023[38] - Net cash provided by financing activities for Q4 2024 was $14,861 thousand, compared to a net cash used of $(4,737) thousand in Q4 2023[38]

Cost Management and Financial Strategy - The company initiated a multi-phase cost savings plan in August 2022, with phases approved in January 2023 and July 2023, aimed at reducing expenses and aligning with financial objectives[79]. - The company may not realize the anticipated benefits of its restructuring plans within the expected timeframe, which could disrupt operations[79]. - The company’s financial condition may be adversely affected by increased refund rates or estimated liabilities related to unredeemed vouchers[73]. - The company estimates future refunds based on historical experiences, and an increase in refund rates could significantly reduce liquidity and profitability[94]. - The company may incur significant costs related to misclassification of workers, which could adversely impact its financial position and results of operations[152]. - The company’s ability to utilize its net operating losses (NOLs) and other tax attributes may be limited by ownership changes as defined by the U.S. Internal Revenue Code[161]. - The company is currently facing a proposed tax assessment of $122.3 million related to transfer pricing for transactions occurring in 2011[158]. - The company has outstanding debt of $53.7 million and $197.3 million in aggregate principal amount for its 2026 Notes and 2027 Notes respectively[163]. - The conditional conversion feature of the 2026 and 2027 Notes may adversely affect the company's liquidity if triggered, requiring cash or shares to settle conversion obligations[170]. - The aggregate principal amount of the 2026 and 2027 Notes is $53.7 million and $197.3 million, respectively, with fixed interest rates, limiting exposure to interest rate changes[298]. - The company does not intend to pay dividends for the foreseeable future, opting to retain earnings for business operations and expansion[174]. Market Strategy and Competition - The company’s strategy focuses on becoming a trusted marketplace for local services and experiences, emphasizing long-term relationships with local merchants to enhance inventory selection and customer experience[77]. - The company faces increased competition from e-commerce sites and traditional media companies, which could adversely impact market share and gross profit[90]. - The company competes against larger companies with more resources, which may allow them to respond more quickly to market changes[92]. - The company must continue to invest significant resources to retain existing customers and acquire new customers to grow profitability[89]. - The company believes that maintaining and enhancing its brand is essential for expanding its customer and merchant base, which may require significant investments[138]. - Unfavorable media coverage could adversely affect the company's reputation, impacting revenue and customer loyalty[139]. Operational Risks and Challenges - The company faces significant risks from macroeconomic challenges, including inflationary pressures, higher labor costs, and supply chain issues, which may hinder the execution of its strategy[78]. - The company’s operating results may vary significantly from quarter to quarter due to the rapidly evolving nature of its business and external factors[80]. - The company is dependent on attracting and retaining high-quality merchants to improve profitability and grow its marketplace, with a focus on enhancing the merchant experience[86]. - The company’s international operations are subject to diverse sociopolitical conditions and regulatory challenges, which may adversely affect its business[82]. - The company’s ability to maintain and improve its technology infrastructure is critical, as disruptions could lead to customer loss[73]. - The company faces challenges in maintaining and improving its technology infrastructure, which is critical for operational success[122]. - Disruptions in service on the company's platforms could result in loss of customers and merchants, adversely affecting financial results[122]. - The company operates in thirteen countries, maintaining significant proprietary and personal data, which poses a constant risk of cyber-attacks[114]. - Cybersecurity breaches could lead to significant reputational harm and customer attrition, impacting financial performance[116]. - The company continues to invest in cybersecurity measures, but there are no assurances that these will be sufficient to prevent breaches[119]. - The company is subject to payments-related risks, including potential increases in interchange fees and holdbacks from payment processors[104]. - The company relies on email and internet search engines for traffic, and a decline in these sources could adversely affect business operations[108]. - The company relies heavily on Internet search engines for traffic generation, with potential negative impacts from algorithm changes affecting search rankings[110]. Legal and Regulatory Risks - The company is currently subject to multiple lawsuits related to intellectual property, which could result in substantial financial and managerial resource expenditure[137]. - The company may face legal liabilities related to content published on its platforms, which could materially affect its business[153]. - The company is exposed to risks associated with compliance to new ESG regulations, which could harm its reputation and financial condition[162]. - The company may face increased compliance costs due to evolving privacy laws, which could impact its operational results[149]. - Noncompliance with privacy regulations could result in significant fines, potentially up to €20 million or 4% of annual global revenue under GDPR[149]. - The company may be subject to additional laws and regulations as it expands into new markets, which could increase operational costs and affect profitability[144]. - The company is subject to regular audits by tax authorities, which could result in significant liabilities and penalties[158]. - The company may face increased costs and operational challenges due to potential changes in tax laws affecting internet commerce[159]. Management and Governance - The company has experienced significant turnover in its senior management team, which could impede the execution of its business and growth strategy[97]. - The material weakness in internal control over financial reporting identified as of December 31, 2022, has not yet been fully remediated, potentially affecting financial accuracy[99]. - The company must provide a competitive compensation package to attract and retain key executives and employees in a competitive marketplace[98]. - Provisions in the company's charter documents may discourage favorable takeovers, limiting stockholder influence over management changes[175]. Financial Performance and Market Conditions - The company’s trading price is highly volatile, influenced by various operational and market risks[76]. - The trading price of the company's Common Stock has been highly volatile, influenced by operating results and external factors specific to technology and Internet commerce[171]. - The company expects continued volatility in its stock price and financial markets due to various factors, including macroeconomic conditions and analyst coverage[172]. - Approximately 23.6% of the company's revenue for the year ended December 31, 2024, was derived from international operations, exposing it to foreign currency exchange risks[295]. - As of December 31, 2024, the company's net working capital surplus from subsidiaries subject to foreign currency translation risk was $8.3 million, compared to a deficit of $21.7 million in 2023[297].

Group 1 - Groupon, Inc. plans to release its fourth quarter and full year 2024 financial results after market close on March 11, 2025 [1] - A conference call will be held on March 12, 2025, at 8:00 AM ET to discuss the results, with investors able to submit questions via email [2] - The conference call will be accessible via a live webcast, with a replay available afterward [2] Group 2 - Groupon is described as a trusted local marketplace for consumers to purchase services and experiences [3]

Company Performance - Groupon's stock closed at $10.26, reflecting a -1.63% change from the previous day, underperforming compared to the S&P 500's daily loss of 1.22% [1] - Over the past month, Groupon's stock performance remained flat at 0%, outperforming the Retail-Wholesale sector's loss of 4.52% and the S&P 500's loss of 2.31% [1] Upcoming Earnings - Groupon is expected to report an EPS of -$0.06, indicating a 120% decline from the same quarter last year [2] - The consensus estimate for revenue is $128.92 million, which represents a 6.39% decrease compared to the same quarter of the previous year [2] Analyst Forecasts - Recent revisions to analyst forecasts for Groupon are important as they reflect changes in near-term business trends [3] - Positive changes in estimates suggest a favorable outlook on the company's business health and profitability [3] Zacks Rank System - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has shown a proven track record of outperformance, with 1 stocks returning an average of +25% annually since 1988 [5] - Groupon currently holds a Zacks Rank of 3 (Hold), with no changes in the Zacks Consensus EPS estimate over the past month [5] Industry Overview - The Internet - Commerce industry, part of the Retail-Wholesale sector, has a Zacks Industry Rank of 35, placing it in the top 14% of over 250 industries [6] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [6]

Groupon (GRPN) closed the latest trading day at $11.80, indicating a -1.09% change from the previous session's end. This move lagged the S&P 500's daily loss of 0.47%. Elsewhere, the Dow gained 0.37%, while the tech-heavy Nasdaq lost 1.35%.Heading into today, shares of the online daily deal service had gained 13.62% over the past month, outpacing the Retail-Wholesale sector's loss of 0.47% and the S&P 500's loss of 1.78% in that time.The investment community will be paying close attention to the earnings pe ...

Company Performance - Groupon's stock closed at $11.76, reflecting a slight increase of +0.09% from the previous trading day, but underperformed compared to the S&P 500, which gained 0.67% [1] - Over the past month, Groupon's shares have decreased by 3.37%, while the Retail-Wholesale sector gained 7.15% and the S&P 500 increased by 2.07% [1] Upcoming Earnings - Groupon is expected to report an EPS of -$0.06, indicating a significant decline of 120% compared to the same quarter last year [2] - The consensus estimate for quarterly revenue is $128.92 million, which represents a decrease of 6.39% from the previous year [2] Analyst Projections - Recent shifts in analyst projections for Groupon should be monitored, as positive estimate revisions indicate optimism regarding the company's business and profitability [3] - The Zacks Rank system, which assesses these estimate changes, provides actionable insights for investors [4] Zacks Rank and Industry Performance - Groupon currently holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate remaining unchanged over the past month [5] - The Internet - Commerce industry, which includes Groupon, has a Zacks Industry Rank of 59, placing it in the top 24% of over 250 industries, indicating strong performance potential [6]

Core Viewpoint - Groupon's recent earnings report shows a mixed performance with a significant earnings beat but declining revenues, raising questions about future growth potential [2][3][12]. Financial Performance - Adjusted earnings for Q3 2024 were 33 cents per share, surpassing the Zacks Consensus Estimate of a loss of 25 cents by 232%, compared to a loss of $1.31 per share in the same quarter last year [2]. - Revenues totaled $114.5 million, missing the consensus estimate by 3.8% and reflecting a 9% year-over-year decline [3]. - North America revenues were $86.9 million, down 9% year-over-year, while international revenues were $27.6 million, decreasing 13% year-over-year [4]. Customer Metrics - Active customers at the end of Q3 were approximately 15.5 million, down from 17 million a year ago, but exceeding the consensus estimate by 3.68% [8]. Operating Details - Gross profit was $102.9 million, down 7% year-over-year, while selling, general, and administrative expenses fell 10.8% to $71.3 million [9]. - Marketing expenses increased by 25.4% to $36.3 million, leading to a GAAP operating loss of $5.6 million compared to a loss of $464K in the previous year [9]. Balance Sheet & Cash Flow - Cash and cash equivalents at the end of the quarter were $159.7 million, down from $178.1 million as of June 30, 2024 [10]. - The company reported an operating cash outflow of $16.3 million, contrasting with an inflow of $15.3 million in the prior quarter [10]. Guidance - For Q4 2024, Groupon expects revenues between $124 million and $131 million, indicating a year-over-year decline of 10% to 5% [12]. - The company anticipates adjusted EBITDA between $14 million and $19 million for Q4 2024 [13]. Industry Context - Groupon is part of the Zacks Internet - Commerce industry, which has seen mixed performance, with competitors like Wayfair gaining 42.8% over the past month [21].