GRPN
Groupon, INC
NASDAQ
10-Q: Groupon Reports Mixed Q1 2024 Results Amidst Restructuring Efforts
Sentiment:
Quarterly Report
9 May 2024 4:06 PM
Groupon's Q1 2024 results show a slight revenue increase but a net loss, alongside ongoing restructuring and a recent capital raise.
Worse than expected
While the net loss improved, the company still reported a loss and gross billings decreased, indicating worse than expected performance.
Capital raise
The company completed an $80 million fully backstopped rights offering in January 2024.
The rights offering was fully backstopped by Pale Fire Capital SICAV a.s.
Summary
- Groupon's revenue for the first quarter of 2024 was $123.1 million, a slight increase from $121.6 million in the same period last year.
- The company reported a net loss of $11.5 million for the quarter, compared to a net loss of $28.6 million in Q1 2023.
- Gross billings were $381.1 million, down from $396.4 million year-over-year.
- The company completed an $80 million fully backstopped rights offering in January 2024.
- Groupon prepaid $43.1 million to terminate its credit agreement in February 2024.
- The company continues to implement its 2022 cost savings plan, which includes a reduction of approximately 1,150 positions globally.
- A tax dispute in Italy involving a $119.3 million assessment is ongoing, with a hearing scheduled for July 9, 2024.
Sentiment
Score: 5
Explanation: The document presents a mixed picture with some improvements in profitability but ongoing challenges in revenue growth and a material weakness in internal controls. The sentiment is neutral to slightly negative.
Positives
- Revenue saw a slight increase year-over-year.
- Net loss improved significantly compared to the same quarter last year.
- The company successfully completed an $80 million rights offering.
- The termination of the credit agreement simplifies the company's financial structure.
- Adjusted EBITDA showed a positive result of $19.5 million, a significant improvement from the prior year.
Negatives
- Gross billings decreased year-over-year.
- The company continues to operate at a net loss.
- Active customers have decreased year-over-year.
- The company is facing a significant tax assessment in Italy.
- Disclosure controls and procedures were deemed not effective as of March 31, 2024 due to a material weakness in internal control over financial reporting.
Risks
- The company's ability to attract and retain local merchants is crucial for its local experiences marketplace.
- Macroeconomic conditions, including inflation, could impact consumer and merchant behavior.
- The ongoing tax dispute in Italy could result in significant financial liabilities.
- The company's disclosure controls and procedures were not effective as of March 31, 2024 due to a material weakness in internal control over financial reporting.
- The company is exposed to foreign currency exchange rate fluctuations.
Future Outlook
The company plans to grow revenue by building long-term relationships with local merchants and enhancing the customer experience. They will continue to monitor the impact of macroeconomic conditions on their business.
Management Comments
- Management is focused on improving the marketplace offering and merchant value proposition.
- The company is focused on strengthening its product offering and rebuilding performance marketing campaigns.
- Management believes the company has sufficient liquidity to support its ongoing operational needs within the next 12 months.
Industry Context
Groupon operates in a competitive e-commerce marketplace, facing challenges from other online platforms and changing consumer behavior. The company's focus on local experiences aligns with a trend towards personalized and localized services.
Comparison to Industry Standards
- Groupon's revenue growth is modest compared to some other e-commerce platforms, which have seen more rapid expansion.
- The company's continued net losses contrast with more profitable peers in the online marketplace sector.
- The successful rights offering and debt reduction are positive steps, but the company's overall financial health remains a concern compared to industry leaders.
- The ongoing restructuring efforts are similar to actions taken by other companies in the tech sector to improve efficiency and profitability.
Stakeholder Impact
- Shareholders experienced dilution from the rights offering.
- Employees are affected by the ongoing restructuring and workforce reductions.
- Merchants are impacted by changes in the marketplace and the company's strategy.
- Customers may see changes in the availability and types of deals offered.
Next Steps
- The company will continue to implement its 2022 cost savings plan.
- Groupon will continue to defend itself in the ongoing tax dispute in Italy.
- The company will continue to monitor and evaluate the effectiveness of its internal control over financial reporting.
Legal Proceedings
- A Groupon subsidiary in Italy is litigating a tax dispute with the Italian tax authorities relating to a $119.3 million assessment.
- The subsidiary has lodged a second-level appeal and also has the ability to challenge the assessment in an international Mutual Agreement Proceeding.
- A hearing on the second-level appeal is scheduled for July 9, 2024.
- In February 2024, Groupon S.r.l. received a proposed assessment of approximately $31.6 million related to a 2017 distribution made to its parent entity.
Related Party Transactions
- The Rights Offering was fully backstopped by Pale Fire Capital SICAV a.s., an entity affiliated with the company's Interim Chief Executive Officer and a member of the Board.
Key Dates
- November 20, 2023: Rights offering commenced.
- January 17, 2024: Expiration date for the subscription period for the Rights Offering.
- January 22, 2024: Closing of the $80 million fully backstopped Rights Offering.
- February 2024: Prepayment of $43.1 million to terminate the Credit Agreement.
- March 31, 2024: End of the reporting period for the quarterly results.
- April 9, 2024: Groupon S.r.l.'s payment suspension request was denied.
- July 9, 2024: Hearing date for the second-level appeal of the Italian tax assessment.
- October 22, 2024: Additional payment of $52.2 million will be required to be posted for the Italian tax assessment if the appeal has not been resolved.
Keywords
Groupon, e-commerce, marketplace, local experiences, discounts, restructuring, rights offering, financial results, Q1 2024, tax assessment
GRPN
Groupon, INC
NASDAQ
Sector: Communication Services
Filings with Classifications
Capital raise
18 June 2025 7:29 AM
Financing Transaction Announcement
- The company is issuing $244,071,000 aggregate principal amount of new 4.875% Convertible Senior Notes due 2030 in exchange for existing notes. While it's an exchange and not a cash raise, it is a form of capital restructuring that impacts the company's debt capital.
Delay expected
17 June 2025 3:40 PM
Insider Transaction Report
- The Form 4 was filed late due to an inadvertent administrative oversight.
Delay expected
17 June 2025 3:39 PM
Insider Transaction Report
- The Form 4 filing was submitted late due to an inadvertent administrative oversight.
Delay expected
17 June 2025 3:39 PM
Insider Transaction Report
- The Form 4 was filed late due to an inadvertent administrative oversight.
Delay expected
16 June 2025 3:48 PM
Insider Transaction Report
- The Form 4 filing was submitted late due to an "inadvertent administrative oversight."
Worse than expected
5 June 2025 1:29 PM
Insider Transaction Report
- The Form 4 was filed late, indicating a lapse in regulatory compliance due to an inadvertent administrative oversight.
Delay expected
5 June 2025 1:29 PM
Insider Transaction Report
- The Form 4 filing itself was delayed, submitted late due to an inadvertent administrative oversight.
Delay expected
4 June 2025 5:36 PM
Insider Transaction Report
- The Form 4 filing was submitted late due to an inadvertent administrative oversight, as stated in the filing.
Better than expected
27 May 2025 1:31 PM
Insider Transaction Report Amendment
- The vesting of 109,250 Performance Share Units indicates that Groupon successfully met a pre-established stock price hurdle, which is a positive performance indicator for the company's stock.
Worse than expected
7 May 2025 4:11 PM
Earnings Press Release
- Global revenue decreased by 5% year-over-year, indicating a decline in overall sales performance.
- Adjusted EBITDA decreased from $19.5 million to $15.3 million, suggesting a decrease in profitability.
Worse than expected
7 May 2025 4:11 PM
Quarterly Report
- Revenue decreased from $123.08 million to $117.19 million, indicating a worse than expected performance.
- Adjusted EBITDA decreased from $19.52 million to $15.33 million, indicating a worse than expected performance.
Worse than expected
28 April 2025 4:07 PM
Proxy Statement
- The company reported a net loss of $57 million in 2024.
- The adjusted EBITDA goal for the 2024 Annual Bonus Plan remained below threshold.
Worse than expected
11 March 2025 4:13 PM
Earnings Release
- While North America Local billings showed positive growth, overall revenue, gross billings, and unit sales decreased year-over-year, and the company reported a net loss for both the quarter and the full year.
Worse than expected
11 March 2025 4:12 PM
Annual Results
- Gross billings, units, revenue, and gross profit all decreased year-over-year, indicating a decline in overall business activity.
Capital raise
19 November 2024 4:10 PM
Debt Issuance Announcement
- The document details a capital raise of $20 million through the issuance of convertible senior secured notes.
- The total issuance was $197.26 million, with the majority being an exchange of existing debt.
Capital raise
12 November 2024 4:51 PM
Quarterly Report
- The company completed an $80 million fully backstopped rights offering in January 2024.
- The company entered into exchange and subscription agreements for $197.3 million of new convertible senior secured notes due 2027.
Worse than expected
12 November 2024 4:51 PM
Quarterly Report
- The company's revenue, gross profit, and adjusted EBITDA all decreased compared to the same period last year, indicating worse than expected results.
Delay expected
12 November 2024 4:51 PM
SEC Form 4 Filing
- The Form 4 filing was submitted late due to an inadvertent administrative oversight.
Capital raise
12 November 2024 4:50 PM
Financing Announcement
- Groupon is raising $20 million in gross cash proceeds through the issuance of new 2027 convertible secured notes.
- The company is also exchanging $176.26 million of existing 2026 notes for new 2027 notes, which is a form of capital restructuring.
Better than expected
30 July 2024 4:19 PM
Quarterly Report
- The company reported a smaller net loss compared to the same quarter last year.
- The company achieved positive operating and free cash flow.
- North America local revenue grew by 7% year-over-year.
Worse than expected
30 July 2024 4:18 PM
Quarterly Report
- The company's revenue decreased slightly year-over-year, indicating a worse performance than expected in terms of top-line growth.
Better than expected
9 May 2024 4:09 PM
Quarterly Report
- The company's results were better than expected as they exceeded the high end of guidance.
- The company achieved its first consolidated revenue growth since 2016.
- Adjusted EBITDA turned positive, a significant improvement from the previous year.
Worse than expected
9 May 2024 4:06 PM
Quarterly Report
- While the net loss improved, the company still reported a loss and gross billings decreased, indicating worse than expected performance.
Capital raise
9 May 2024 4:06 PM
Quarterly Report
- The company completed an $80 million fully backstopped rights offering in January 2024.
- The rights offering was fully backstopped by Pale Fire Capital SICAV a.s.
Capital raise
7 May 2024 9:26 AM
Executive Appointment and Compensation Announcement
- The company is seeking stockholder approval to increase the number of shares available under the 2011 Incentive Plan by 7,000,000 shares.
- This increase is necessary to cover the PSU awards granted to the CEO and CFO, as well as future awards to other employees.
Capital raise
29 April 2024 5:25 PM
Proxy Statement
- The Pale Fire Parties amended and restated the Standstill Agreement to (a) modify the termination date from the earlier to occur of forty-five days following the date on which Mr.
- Senkypl shall cease to serve for any reason as Interim Chief Executive Officer or Chief Executive Officer of the Company to December 31, 2024; and (b) exclude any and all shares of common stock purchased by the Pale Fire Parties in connection with (i) their exercise of basic subscription rights prior to the expiration of the Rights Offering, (ii) fully purchasing any and all unsubscribed shares in the Rights Offering following its expiration, and (iii) the exercise of their over-subscription privileges, if applicable, from the Pale Fire Parties existing 25% beneficial ownership limitation.
Capital raise
15 March 2024 7:05 AM
Quarterly Report
- In January 2024, Groupon closed a fully backstopped Rights Offering that was oversubscribed and raised $80.0 million.
Better than expected
15 March 2024 7:05 AM
Quarterly Report
- The company's Q4 results were better than expected, with positive net income and adjusted EBITDA, which is a significant improvement from previous quarters.
- The company also resolved its going concern issue, which was a major concern in previous periods.
Worse than expected
15 March 2024 6:58 AM
Annual Results
- The document outlines numerous risks and challenges, suggesting that the company's future performance may be worse than expected.
Capital raise
14 February 2024 7:29 PM
Debt Repayment Announcement
- Groupon conducted an $80 million fully backstopped rights offering.
- The rights offering was made available to all holders of record of the company's common stock.
- The proceeds from the rights offering were used to repay debt and for general corporate purposes.
Capital raise
22 January 2024 8:30 AM
Capital Raise Announcement
- Groupon completed an $80 million rights offering.
- The offering was fully backstopped and significantly oversubscribed.
- The company issued 7,079,646 shares at $11.30 per share.
Better than expected
12 January 2024 8:41 AM
Business Update
- The company expects Q4 2023 results to be at or above the high end of guidance, indicating better than expected performance.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.