Groupon(GRPN)2024-07-30 20:18North America Performance - Gross billings for North America increased by $3.1 million to $278.969 million for the three months ended June 30, 2024, compared to the same period in 2023, primarily driven by favorable refund rates and increased demand for the Local category [174]. - Total units sold in North America decreased by 0.1 million to 5.882 million for the three months ended June 30, 2024, while trailing twelve months (TTM) active customers decreased by 0.4 million to 10.235 million [174][173]. - For the six months ended June 30, 2024, gross billings increased by $9.9 million to $551.901 million, attributed to favorable refund rates in the Local category and increased demand for the Travel category [175]. - Revenue for North America for the three months ended June 30, 2024, was $124.615 million, a decrease from $129.109 million in the same period in 2023 [165]. - Gross profit for North America for the three months ended June 30, 2024, was $112.667 million, slightly down from $112.965 million in the prior year [165]. - Adjusted EBITDA for North America increased to $16.479 million for the three months ended June 30, 2024, compared to $15.197 million in the same period in 2023 [165]. - Active customers in North America for the trailing twelve months ended June 30, 2024, decreased by 3.5% to 10.235 million from 10.604 million in the prior year [173]. - North America revenue increased by $2.5 million (2.6%) and gross profit increased by $5.8 million (7.0%) for the three months ended June 30, 2024 compared to the prior year, primarily due to favorable refund rates and increased demand for the Local category [178]. - Total revenue for the six months ended June 30, 2024 was $192.491 million, a 4.0% increase from $185.093 million in the prior year [178]. - Contribution profit for North America decreased by $9.2 million (13.5%) for the three months ended June 30, 2024, primarily due to increased marketing expenses [182]. - Marketing expenses for North America increased by $15.03 million (104.0%) for the three months ended June 30, 2024, reflecting increased investment in performance marketing campaigns [182]. - Total cost of revenue for North America decreased by $3.3 million (25.6%) for the three months ended June 30, 2024, primarily due to a decrease in payroll costs [178]. - Gross margin for North America improved to 35.3% for the three months ended June 30, 2024, compared to 34.7% in the prior year [182]. International Performance - International gross billings decreased by $23.0 million (19.5%) for the three months ended June 30, 2024, attributed to an overall decline in demand across all categories [187]. - TTM active customers in the international segment decreased by 1.3 million (18.8%) for the trailing twelve months ended June 30, 2024 compared to the prior year [186]. - International segment revenue decreased by $45.0 million for the six months ended June 30, 2024, reflecting a decline in demand across all categories [188]. - The Local category in the international segment saw a decrease in gross billings of $14.756 million (16.8%) for the three months ended June 30, 2024 [185]. - International revenue for the three months ended June 30, 2024, decreased by $7.0 million, primarily due to an overall decline in demand across all categories [191]. Financial Metrics - Total revenue for the three months ended June 30, 2024, decreased by 21.1% to $26,258 million compared to $33,275 million in the same period of 2023 [190]. - Gross profit for the three months ended June 30, 2024, decreased by 20.4% to $23,788 million compared to $29,872 million in the same period of 2023 [190]. - Marketing expenses for the three months ended June 30, 2024, decreased by 9.9% to $7,043 million compared to $7,820 million in the same period of 2023 [193]. - Total operating expenses for the three months ended June 30, 2024, decreased by 8.1% to $108,309 million compared to $117,841 million in the same period of 2023 [195]. - Other income (expense), net for the three months ended June 30, 2024, was $(4,483) million compared to $(4,805) million in the same period of 2023 [200]. - Provision for income taxes for the three months ended June 30, 2024, was $9,287 million, compared to $2,323 million in the same period of 2023 [203]. - Contribution profit for the three months ended June 30, 2024, decreased by 24.1% to $16,745 million compared to $22,052 million in the same period of 2023 [193]. - The effective tax rate for the three months ended June 30, 2024, was (7,429.6)% compared to (24.0)% in the same period of 2023 [203]. - The gross margin for the three months ended June 30, 2024, was 27.7%, compared to 28.3% in the same period of 2023 [190]. - For the three months ended June 30, 2024, the company reported a net loss of $9.4 million compared to a net loss of $12.0 million in the same period of 2023, representing a 21.7% improvement [210]. - Adjusted EBITDA for the three months ended June 30, 2024, was $16.5 million, up from $15.2 million in the same period of 2023, indicating an 8.6% increase [210]. - The company generated free cash flow of $10.8 million for the three months ended June 30, 2024, compared to a negative free cash flow of $44.6 million in the same period of 2023, showing a significant turnaround [220]. - Cash provided by operating activities for the six months ended June 30, 2024, was $5.2 million, a substantial improvement from cash used in operating activities of $118.6 million in the prior period [222]. - The company’s cash balance totaled $178.1 million as of June 30, 2024, providing sufficient liquidity to support ongoing operational needs [216]. - Gross billings for the six months ended June 30, 2024, were reported at $754.8 million, reflecting a slight increase from $752.9 million in the same period of 2023 [215]. Capital and Tax Management - The company received $80.0 million in gross proceeds from a fully backstopped Rights Offering, which involved the purchase of 7,079,646 shares at $11.30 per share [225]. - The company prepaid $43.1 million to terminate all commitments under its Credit Agreement, utilizing a portion of the proceeds from the Rights Offering [226]. - The effective tax rates for the three and six months ended June 30, 2024, were influenced by pretax losses in jurisdictions with valuation allowances against deferred tax assets [204]. - The company expects its consolidated effective tax rate to continue to differ significantly from the U.S. federal income tax rate due to its tax obligations in profitable jurisdictions and valuation allowances in loss jurisdictions [204]. - As of June 30, 2024, the company had $53.0 million in cash held by international subsidiaries, primarily in various foreign currencies [228]. - For the three and six months ended June 30, 2024, approximately 21.1% and 22.3% of the company's revenue was derived from the International segment [235]. - The net working capital deficit from subsidiaries subject to foreign currency translation risk was $7.2 million as of June 30, 2024, with a potential increase of $0.7 million from a hypothetical 10% adverse change in foreign currency exchange rates [237]. - The company issued the 2026 Notes with a principal amount of $230.0 million, maturing on March 15, 2026, and is exploring options for refinancing [227]. - The company has $5.4 million in lease obligations as of June 30, 2024, with limited exposure to interest rate risk due to fixed-rate debt [238]. - The company anticipates that inflationary pressures may adversely impact its operating costs and overall financial condition [239]. - There were no off-balance sheet arrangements as of June 30, 2024 [231]. - Contractual obligations and commitments as of June 30, 2024, did not materially change from the previous year [230]. - The company intends to reinvest earnings from non-U.S. subsidiaries in those operations or remit them in a tax-efficient manner [228]. - Management's estimates and assumptions in financial reporting are based on historical experience and reasonable assumptions, which may differ from actual results [231].