GRPN
Groupon, INC
NASDAQ
10-K: Groupon's 2024 Annual Report: Navigating Challenges and Charting a Course for Growth
Sentiment:
Annual Results
11 March 2025 4:12 PM
Groupon's 2024 10-K filing reveals a company in transition, focusing on local experiences while addressing financial and operational headwinds.
Worse than expected
Gross billings, units, revenue, and gross profit all decreased year-over-year, indicating a decline in overall business activity.
Summary
- Groupon's 2024 Annual Report highlights the company's strategy to become a trusted marketplace for local services and experiences.
- The company operates in two segments: North America and International, and three categories: Local, Goods, and Travel.
- Revenue is generated through commissions on transactions, primarily from selling goods or services on behalf of third-party merchants.
- Gross billings for 2024 were $1.56 billion, a decrease from $1.65 billion in 2023.
- Units sold totaled 36.64 million in 2024, down from 41.37 million in 2023.
- The number of active customers was 15.43 million in 2024, compared to 16.50 million in 2023.
- Revenue for 2024 was $492.56 million, a decrease from $514.91 million in 2023.
- Gross profit was $444.31 million in 2024, compared to $450.66 million in 2023.
- Adjusted EBITDA increased to $69.31 million in 2024 from $55.45 million in 2023.
- Free cash flow was $40.56 million in 2024, a significant improvement from negative $97.27 million in 2023.
- The company is addressing a proposed tax assessment from the Italian tax authority of $122.3 million.
- Groupon completed a Rights Offering in January 2024, generating $80 million in gross proceeds.
- The company issued $197.3 million in 2027 Notes, exchanging $176.3 million of 2026 Notes and raising $20 million in cash.
- A material weakness in internal control over financial reporting related to complex manual calculations remains unremediated.
Sentiment
Score: 6
Explanation: The sentiment is neutral to slightly positive. While revenue and customer metrics are down, the company is showing improved efficiency with increased Adjusted EBITDA and positive free cash flow. The ongoing material weakness and tax assessment are negative factors.
Positives
- Adjusted EBITDA increased to $69.31 million in 2024, showcasing improved operational efficiency.
- Free cash flow turned positive in 2024, reaching $40.56 million, indicating better cash management.
- The company completed a Rights Offering, generating $80 million to strengthen its financial position.
- Groupon successfully exchanged a significant portion of its 2026 Notes for new 2027 Notes, extending its debt maturity profile.
- The company is investing in technology to improve its platform and customer experience.
- The company is focused on diversity, equity, and inclusion initiatives to foster a positive workplace culture.
Negatives
- Gross billings decreased to $1.56 billion in 2024 from $1.65 billion in 2023.
- Units sold decreased to 36.64 million in 2024 from 41.37 million in 2023.
- The number of active customers decreased to 15.43 million in 2024 from 16.50 million in 2023.
- Revenue decreased to $492.56 million in 2024 from $514.91 million in 2023.
- Gross profit decreased to $444.31 million in 2024 from $450.66 million in 2023.
- A material weakness in internal control over financial reporting related to complex manual calculations remains unremediated.
- The company is facing a proposed tax assessment from the Italian tax authority of $122.3 million.
Risks
- The company's strategy may be unsuccessful and may expose it to additional risks.
- Restructuring plans could be disruptive to operations and adversely affect results.
- Operating results may vary significantly from quarter to quarter.
- The company faces challenges arising from international operations and global economic uncertainty.
- Failure to retain existing customers or acquire new customers could harm the business.
- The company operates in a highly competitive industry with relatively low barriers to entry.
- Breaches of information technology systems could harm relationships with customers and merchants.
- The company may not be able to adequately protect its intellectual property rights.
- The application of certain laws and regulations may harm the business and results of operations.
- The company may not have the ability to raise funds necessary to settle conversions of the 2026 Notes and 2027 Notes in cash.
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
- Management is investing significant resources in making the platform more efficient, stable, and agile.
- Management believes that the company has sufficient liquidity to support its overall ongoing operational needs within the next 12 months.
Industry Context
Groupon operates in a highly competitive industry with relatively low barriers to entry, facing competition from e-commerce sites, large businesses offering similar deals, and traditional offline coupon services.
Comparison to Industry Standards
- The document does not provide specific comparisons to industry standards or comparable companies.
- Without more information, it's difficult to assess Groupon's performance against industry benchmarks.
- A more detailed analysis would require comparing Groupon's metrics to those of competitors like LivingSocial (though smaller now), Yelp (in local), or larger e-commerce platforms with deal sections like Amazon or eBay.
Stakeholder Impact
- Shareholders may experience volatility in the stock price due to market conditions and company performance.
- Employees may be affected by restructuring plans and workforce reductions.
- Merchants may benefit from the company's efforts to build long-term relationships and improve the marketplace.
- Customers may benefit from an enhanced customer experience and improved inventory selection.
Next Steps
- The company will continue to focus on building long-term relationships with local merchants.
- The company will continue to invest in technology to improve its platform and customer experience.
- The company will continue to work towards remediating the material weakness in internal control over financial reporting.
- Groupon S.r.l. intends to pursue a prompt appeal to the Italian Supreme Court regarding the tax assessment.
Legal Proceedings
- Groupon S.r.l. is litigating a tax dispute with the Italian tax authorities regarding a $122.3 million assessment.
- The company is involved in various other legal proceedings incident to the operation of its business.
Key Dates
- May 14, 2019: Date of the Second Amended and Restated Credit Agreement.
- March 25, 2021: Date of Indenture for 2026 Notes.
- December 31, 2024: Fiscal year end.
- March 6, 2025: Date shares of common stock outstanding was reported.
- March 11, 2025: Date of filing of the 10-K report.
Keywords
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."
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.
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
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.
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.
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.
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.