GRPN
Groupon, INC
NASDAQ
10-Q: Groupon Reports Q1 2025 Results: Revenue Declines Amid Strategic Shifts
Sentiment:
Quarterly Report
7 May 2025 4:11 PM
Groupon's Q1 2025 results reveal a revenue decrease, influenced by strategic changes and macroeconomic conditions, despite growth in North America's local category.
Worse than expected
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.
Summary
- Groupon's Q1 2025 revenue decreased to $117.19 million from $123.08 million in Q1 2024.
- The company reported a net income attributable to Groupon, Inc. of $7.175 million, compared to a net loss of $12.271 million in the same period last year.
- North America's local category experienced growth in gross billings, active customers, and units, while the Goods category saw a decline.
- International segment revenue decreased due to the exit of the local business in Italy and a decline in site traffic.
- Adjusted EBITDA decreased to $15.33 million from $19.52 million year-over-year.
- The company's free cash flow was negative $3.76 million, compared to negative $13.82 million in the prior year.
- Groupon is focusing on building long-term relationships with local merchants and improving the customer experience.
Sentiment
Score: 6
Explanation: The sentiment is neutral. While the company reported a net profit, revenue declined and there are ongoing challenges related to international operations and internal controls. The company is taking steps to improve its business, but there are still significant risks.
Positives
- Net income attributable to Groupon, Inc. improved significantly, from a loss of $12.271 million to a profit of $7.175 million.
- North America's local category experienced growth in gross billings, active customers, and units.
- Free cash flow improved from negative $13.82 million to negative $3.76 million.
- The company successfully sold Giftcloud Ltd for 15.5 million in cash.
Negatives
- Overall revenue decreased from $123.08 million to $117.19 million.
- International gross billings, units and TTM active customers decreased.
- Adjusted EBITDA decreased from $19.52 million to $15.33 million.
- The company still has 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 inflationary pressures and supply chain challenges, could impact the business.
- The company faces risks related to international operations, including currency exchange rate fluctuations and regulatory challenges.
- The company is subject to a proposed tax assessment for $123.5 million related to Groupon S.r.l. in Italy.
- The company acknowledges a material weakness in internal control over financial reporting.
Future Outlook
Groupon plans to grow revenue by building long-term relationships with local merchants, strengthening online selection, enhancing customer reach through experience curation, and improving convenience to drive customer demand and purchase frequency.
Management Comments
- Groupon is investing significant resources in making its platform more efficient, stable and agile.
- By improving our technology, our customer base can enjoy a modernized experience along with seamless execution of new product innovation, improved customer experience and customer satisfaction.
- Our platform migrations are strategic investments in our ability to innovate faster, serve merchants better, and create more engaging experiences for our customers.
Industry Context
Groupon's performance reflects broader trends in the e-commerce and local experiences market, including the shift towards online marketplaces and the impact of macroeconomic conditions on consumer spending. The company's focus on local experiences aligns with the increasing demand for personalized and curated offerings.
Comparison to Industry Standards
- It is difficult to compare Groupon directly to industry standards as it is a unique business.
- Comparable companies include online marketplaces such as Etsy, eBay, and Amazon, and local service platforms such as Yelp and Thumbtack.
- Groupon's revenue decline is in line with some other e-commerce companies that have experienced slower growth in recent periods due to macroeconomic factors.
- However, Groupon's focus on local experiences differentiates it from larger e-commerce players.
Stakeholder Impact
- Shareholders: The company's performance impacts shareholder value, with the net profit being a positive sign but revenue decline and ongoing risks creating uncertainty.
- Merchants: Groupon's strategy to build long-term relationships with local merchants could benefit merchants by providing them with a platform to reach more customers.
- Customers: The company's focus on improving the customer experience could benefit customers by providing them with more personalized and convenient offerings.
- Employees: Restructuring actions and strategic shifts could impact employees, particularly in the international segment.
Next Steps
- The company will continue to focus on building long-term relationships with local merchants.
- Groupon will continue to invest in improving its technology platform.
- The company will continue to defend against the proposed tax assessment in Italy.
- Groupon will continue to remediate the material weakness in internal control over financial reporting.
Legal Proceedings
- Groupon is currently litigating a tax dispute with the Italian tax authorities relating to a $123.5 million Assessment.
- The company is also subject to consumer claims or lawsuits relating to alleged violations of consumer protection or privacy rights and statutes.
- Groupon is subject to a variety of regulatory inquiries, audits, and investigations across the jurisdictions where it conducts business.
Key Dates
- October 2008: Groupon, Inc. commenced operations
- August 2011: Groupon established the 2011 Incentive Stock Plan
- May 14, 2019: Second amended and restated credit agreement JPMorgan Chase Bank, N.A.
- March 22, 2021: Last reported sale price of Groupon's Common Stock on The Nasdaq Global Select Market
- March 30, 2023: Groupon issued 3,500,000 units of stock options
- November 20, 2023: Board approved $80 million fully backstopped rights offering to the Company's stockholders
- January 17, 2024: Expiration Date for the subscription period for the Rights Offering
- January 22, 2024: Groupon announced the closing of its $80.0 million fully backstopped Rights Offering
- February 12, 2024: Groupon prepaid $43.1 million to terminate all commitments to access further credit under the Credit Agreement
- March 2024: Groupon entered into an agreement with a third party to sell the rights to certain intangible assets
- April 2024: The sale of intangible assets was completed
- July 2024: Groupon S.r.l.'s Board approved the exit of the local business in Italy
- June 12, 2024: Groupon granted 2024 Executive PSUs
- October 14, 2024: Groupon granted 2024 Executive PSUs
- October 18, 2024: Groupon S.r.l. lodged an appeal to the first-tier court
- October 31, 2024: Groupon learned the highest-level court declined to hear its appeal related to a Portugal VAT assessment
- November 12, 2024: Exchange and Subscription Agreements were entered into
- November 19, 2024: Groupon issued $197.3 million aggregate principal amount of 2027 Notes
- December 2024: Groupon S.r.l. received an unfavorable ruling at the second-level tax court
- January 1, 2025: Beginning of the three-year contractual term of the marketing agreement with Major Rocket
- February 2, 2025: Beginning of the period for measuring the achievement of the stock price hurdles for the 2024 Executive PSUs
- March 11, 2025: The Company entered into a marketing agreement with Major Rocket
- March 12, 2025: Groupon S.r.l. filed an appeal to the Italian Supreme Court
- April 10, 2025: The Company entered into a sale and purchase agreement and sold Giftcloud Ltd
- April 18, 2025: Groupon S.r.l. filed a motion for a full stay of the provisional payment obligations
- April 2025: After negative rulings at the first and second tier courts in March 2024 and April 2025 for the majority of the assessed amounts, the Company filed a special appeal to the second-level court requesting the court to revisit certain aspects of its decision.
- May 1, 2025: End of the period for measuring the achievement of the stock price hurdles for the 2024 Executive PSUs
- May 2, 2025: The first stock price hurdle of $14.86 was achieved based on the 90 consecutive calendar day volume-weighted average stock price
- October 17, 2025: Hearing set for Groupon S.r.l.'s appeal to the first-tier court
- November 20, 2025: Groupon may be required to pay additional interest of 2.5% per annum of the 2027 Notes in the event that it fails to pledge certain assets as part of the collateral for the 2027 Notes, unless such assets are sold
- March 15, 2026: Maturity date of the 2026 Notes
- March 15, 2027: Maturity date of the 2027 Notes
- December 15, 2027: The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027 and early adoption is permitted.
Keywords
Groupon, financial results, Q1 2025, revenue, EBITDA, gross billings, active customers, local, goods, travel, restructuring, Italy, Giftcloud, tax assessment, internal control
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.
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.
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
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.
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