Close

Form 8-K Groupon, Inc. For: May 09

FREE Breaking News Alerts from StreetInsider.com!

E-mail Address

StreetInsider.com Top Tickers, 4/25/2024

1. TSLA
2. META
3. ENPH
4. TXN
5. BA
6. SPOT
7. IBM
8. V
9. HCP
10. CMG


May 9, 2018 8:33 AM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): May 9, 2018
 
GROUPON, INC.
(Exact name of registrant as specified in its charter)
 
 
 
 
 
 
 
Delaware
(State or other
jurisdiction
of incorporation)
 
1-35335
(Commission
File Number)
 
27-0903295
(I.R.S. Employer
Identification No.)

 
 
 
 
600 West Chicago Avenue
Suite 400
Chicago, Illinois
 (Address of principal executive offices)
 
60654
(Zip Code)
 
312-334-1579
(Registrant's telephone number, including area code)
 
N/A
(Former name or former address, if changed since last report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))









Item 2.02.    Results of Operations and Financial Condition.
On May 9, 2018, Groupon, Inc. (the “Company”) issued a press release announcing its financial results for its fiscal quarter ended March 31, 2018. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01.    Financial Statements and Exhibits.
(d)
Exhibits:
 
 
Exhibit No.
 
Description
 
 
99.1*
 
 

*The information in Exhibit 99.1 is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.














































SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
GROUPON, INC.
 
 
 
 
 
 
Dated: May 9, 2018
By:
/s/ Michael Randolfi
 
Name:
Michael Randolfi
 
Title:
Chief Financial Officer
















Groupon Announces First Quarter 2018 Results
Strong Growth in International, Voucherless, and Platform Initiatives;
Raises Full Year 2018 Adjusted EBITDA Outlook

•
Gross profit of $324.9 million
•
Net loss from continuing operations of $2.8 million
•
Adjusted EBITDA of $52.6 million
•
GAAP loss per diluted share of $0.01; non-GAAP earnings per diluted share of $0.03
•
Operating cash flow of $148.9 million for the trailing twelve month period; Free cash flow of $83.7 million for the trailing twelve month period
•
2018 Adjusted EBITDA guidance raised to $280 million to $290 million
•
Board of Directors approved $300 million share repurchase authorization
CHICAGO - (BUSINESS WIRE) - May 9, 2018 - Groupon, Inc. (NASDAQ: GRPN) today announced financial results for the quarter ended March 31, 2018.
"We're off to a solid start in 2018, highlighted by strong bottom line growth and continued execution against our strategy and key priorities. More than a million new customers enrolled in our voucherless Groupon+ program during the quarter and are beginning to experience the next generation of Groupon," said CEO Rich Williams. "In addition, we signed a number of new partnerships that connect more high quality local offers with our customer scale and solidify our position as a true platform in local. We're also excited about the strong momentum in our international business, thanks to significant progress on our product, supply and marketing initiatives."

First Quarter 2018 Summary
North America
•
During the quarter we continued to make progress on our customer experience and platform initiatives in North America. We recently announced several partnerships that further strengthen the inventory available on the Groupon platform. Additionally, we launched American Express to bolster our card linked offers platform and offer more choice to customers as we scale our voucherless experiences. We now have over 4.2 million cards linked in Groupon+™, one of our leading voucherless initiatives, and continue to deepen supply in our more than 25 Groupon+ markets.
•
North America gross profit in the first quarter 2018 decreased 1% to $219.7 million. In Local, gross profit decreased 2% to $166.8 million driven by our continued scaling of Groupon+ and the sale of certain OrderUp assets in the second half of 2017. Goods gross profit increased 1% to $36.9 million resulting from our continued focus on optimizing for gross profit. Gross profit in Travel increased 6% to $16.0 million.
•
North America active customers were 32.6 million as of March 31, 2018, and trailing twelve month gross profit per active customer increased 1%.
International
•
We generated positive results in International in the first quarter as we advanced our product, supply, and marketing initiatives. In Local, we ran our largest single International deal ever with Odeon, one of the largest cinema chains in the United Kingdom. In Goods, we made further operational




improvements focused on driving long-term gross profit growth and improving the customer experience.
•
International gross profit increased 19% (5% FX-neutral) in the first quarter 2018 to $105.2 million. Gross profit increased 19% (5% FX-neutral) in Local, 26% (10% FX-neutral) in Goods, and 6% (7% FX-neutral decline) in Travel.
•
International active customers increased to 17.0 million as of March 31, 2018, and trailing twelve month gross profit per active customer increased 9%.
Consolidated
•
Revenue was $626.5 million in the first quarter 2018, down 7% (11% FX-neutral) reflecting our continued focus on revenue generation that maximizes gross profit.
•
Gross profit was $324.9 million in the first quarter 2018, up 5% (1% FX-neutral), led by growth in International.
•
SG&A declined 4% to $222.1 million in the first quarter 2018 as we continue to focus on operational efficiency.
•
Marketing expense was $99.2 million in the first quarter 2018, up 15%.
•
Net loss from continuing operations was $2.8 million in the first quarter 2018 compared to a net loss of $20.9 million in the first quarter 2017.
•
Net loss attributable to common stockholders was $6.9 million, or $0.01 per diluted share, compared to $24.4 million, or $0.04 per diluted share, in the first quarter 2017. Non-GAAP net income attributable to common stockholders was $16.2 million, or $0.03 per diluted share, compared to $5.2 million, or $0.01 per diluted share, in the first quarter 2017.
•
Adjusted EBITDA, a non-GAAP financial measure, was $52.6 million in the first quarter 2018, up 17% from $44.8 million in the first quarter 2017.
•
Global units sold declined 7% to 42.4 million in the first quarter 2018 as we continued to manage our business to maximize gross profit, which in some instances, resulted in fewer units. Units in North America were down 11% with a significant portion of that decline due to our focus on long-term gross profit optimization in Goods as well as our continued scaling of Groupon+ and the sale of certain OrderUp assets that occurred in the second half of 2017.
•
Operating cash flow was $148.9 million for the trailing twelve month period as of the first quarter 2018, and free cash flow, a non-GAAP financial measure, was $83.7 million for the trailing twelve month period.
•
Cash and cash equivalents as of March 31, 2018 were $725.9 million, and we had no outstanding borrowings under our $250 million revolving credit facility.
•
In May 2018, the Board of Directors approved a $300 million share repurchase authorization, which replaces the recently expired authorization. The timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under our Amended and Restated Credit Agreement, share price and other factors, and the program may be terminated at any time.
Definitions and reconciliations of all non-GAAP financial measures and additional information regarding operational measures are included below in the section titled "Terminology Changes, Non-GAAP Financial Measures and Operational Metrics" and in the accompanying tables. All comparisons are year-over-year unless otherwise provided.




Outlook
Groupon is raising its outlook for 2018, which reflects current foreign exchange rates and the Vouchercloud acquisition, which we expect to contribute $5 to $6 million to Adjusted EBITDA in 2018. For the full year 2018, Groupon now expects Adjusted EBITDA to be between $280 million and $290 million, an increase from the previously provided range of $260 million and $270 million.
Conference Call
A conference call will be webcast live today at 9:00 a.m. CDT / 10:00 a.m. EDT and will be available on Groupon’s investor relations website at http://investor.groupon.com. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.
Groupon encourages investors to use its investor relations website as a way of easily finding information about the company. Groupon promptly makes available on this website, free of charge, the reports that the company files or furnishes with the SEC, corporate governance information (including Groupon’s Global Code of Conduct), and select press releases and social media postings. Groupon uses its investor relations site (investor.groupon.com) and the Groupon blog (www.groupon.com/blog) as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
Terminology Changes, Non-GAAP Financial Measures and Operational Metrics
In prior periods, we referred to our product revenue and service revenue as "direct revenue" and "third-party and other revenue," respectively. This terminology change did not impact the amounts presented in the condensed consolidated financial statements accompanying this release.
In addition to financial results reported in accordance with U.S. GAAP, we have provided the following non-GAAP financial measures: Foreign exchange rate neutral operating results, adjusted EBITDA, non-GAAP income (loss) from continuing operations before provision (benefit) for income taxes, non-GAAP net income (loss) attributable to common stockholders, non-GAAP income (loss) per share, non-GAAP provision (benefit) for income taxes and free cash flow. These non-GAAP financial measures, which are presented on a continuing operations basis, are intended to aid investors in better understanding our current financial performance and prospects for the future as seen through the eyes of management. We believe that these non-GAAP financial measures facilitate comparisons with our historical results and with the results of peer companies who present similar measures (although other companies may define non-GAAP measures differently than we define them, even when similar terms are used to identify such measures). However, these non-GAAP financial measures are not intended to be a substitute for those reported in accordance with U.S. GAAP. For reconciliations of these measures to the most applicable financial measures under U.S. GAAP, see "Non-GAAP Reconciliation Schedules" and "Supplemental Financial and Operating Metrics" included in the tables accompanying this release.
We exclude the following items from one or more of our non-GAAP financial measures:
Stock-based compensation. We exclude stock-based compensation because it is primarily non-cash in nature and we believe that non-GAAP financial measures excluding this item provide meaningful supplemental information about our operating performance and liquidity.
Acquisition-related expense (benefit), net. Acquisition-related expense (benefit), net is comprised of the change in the fair value of contingent consideration arrangements and external transaction costs related to business combinations, primarily consisting of legal and advisory fees. The composition of our contingent consideration arrangements and the impact of those arrangements on our operating results vary over time based on a number of factors, including the terms of our business combinations and the timing of those




transactions. We exclude acquisition-related expense (benefit), net because we believe that non-GAAP financial measures excluding this item provide meaningful supplemental information about our operating performance and facilitate comparisons to our historical operating results.
Depreciation and amortization. We exclude depreciation and amortization expenses because they are non-cash in nature and we believe that non-GAAP financial measures excluding these items provide meaningful supplemental information about our operating performance and liquidity.
Interest and Other Non-Operating Items. Interest and other non-operating items include: gains and losses related to minority investments, foreign currency gains and losses, interest income and interest expense, including non-cash interest expense from our convertible senior notes. We exclude interest and other non-operating items from certain of our non-GAAP financial measures because we believe that excluding these items provides meaningful supplemental information about our core operating performance and facilitates comparisons to our historical operating results.
Special Charges and Credits. For the three months ended March 31, 2018 and 2017, special charges and credits included charges related to our restructuring plan. We exclude special charges and credits from Adjusted EBITDA because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons with our historical results.
Descriptions of the non-GAAP financial measures included in this release and the accompanying tables are as follows:
Foreign exchange rate neutral operating results show current period operating results as if foreign currency exchange rates had remained the same as those in effect in the prior year period. These measures are intended to facilitate comparisons to our historical performance.
Adjusted EBITDA is a non-GAAP performance measure that we define as net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, acquisition-related expense (benefit), net and other special charges and credits, including items that are unusual in nature or infrequently occurring. Our definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key measure used by our management and Board of Directors to evaluate operating performance, generate future operating plans and make strategic decisions for the allocation of capital. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors. However, Adjusted EBITDA is not intended to be a substitute for income (loss) from continuing operations.
Non-GAAP income (loss) from continuing operations before provision (benefit) for income taxes, Non-GAAP net income (loss) attributable to common stockholders and non-GAAP income (loss) per diluted share are non-GAAP performance measures that adjust our net income attributable to common stockholders and earnings per share to exclude the impact of:
•
stock-based compensation,
•
amortization of acquired intangible assets,
•
acquisition-related expense (benefit), net,
•
special charges and credits, including restructuring charges,
•
non-cash interest expense on convertible senior notes,




•
non-operating foreign currency gains and losses related to intercompany balances and reclassifications of cumulative translation adjustments to earnings as a result of business dispositions or country exits,
•
non-operating gains and losses from minority investments that we have elected to record at fair value with changes in fair value reported in earnings,
•
non-operating gains and losses from the sale of minority investments, and
•
income (loss) from discontinued operations.
We believe that excluding the above items from our measures of non-GAAP income from continuing operations before provision (benefit) from income taxes, non-GAAP net income attributable to common stockholders and non-GAAP earnings per diluted share provides useful supplemental information for evaluating our operating performance and facilitates comparisons to our historical results by eliminating items that are non-cash in nature, relate to discrete events, or are otherwise not indicative of the core operating performance of our ongoing business.
Non-GAAP Provision (Benefit) for Income Taxes. Non-GAAP provision (benefit) for income taxes reflects our current and deferred tax provision computed based on non-GAAP income from continuing operations before provision (benefit) for income taxes.
Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by operating activities from continuing operations less purchases of property and equipment and capitalized software from continuing operations. We use free cash flow to conduct and evaluate our business because, although it is similar to cash flow from continuing operations, we believe that it typically represents a more useful measure of cash flows because purchases of fixed assets, software developed for internal use and website development costs are necessary components of our ongoing operations. Free cash flow is not intended to represent the total increase or decrease in our cash balance for the applicable period.
Descriptions of the operating metrics included in this release and the accompanying tables are as follows:
Gross Billings. This metric represents the total dollar value of customer purchases of goods and services. For sales of vouchers and similar transactions in which we collect the transaction price from the customer and remit a portion of the transaction price to the third-party merchant who will provide the related goods or services, which comprise a substantial majority of our service revenue transactions, gross billings differs from revenue reported in our condensed consolidated statements of operations, which is presented net of the merchant's share of the transaction price. For product revenue transactions, gross billings are equivalent to product revenue reported in our condensed consolidated statements of operations. We consider this metric to be an important indicator of our growth and business performance as it measures the dollar volume of transactions generated through our marketplaces. Tracking gross billings on service revenue transactions also allows us to monitor the percentage of gross billings that we are able to retain after payments to merchants.
Active customers. We define active customers as unique user accounts that have made a purchase during the trailing twelve months ("TTM") either through one of our online marketplaces or directly with a merchant for which we earned a commission. We consider this metric to be an important indicator of our business performance as it helps us to understand how the number of customers actively purchasing our offerings is trending. Some customers could establish and make purchases from more than one account, so it is possible that our active customer metric may count certain customers more than once in a given period. For entities that we have acquired in a business combination, this metric includes active customers of the acquired entity, including customers who made purchases prior to the acquisition.




Units. This metric represents the number of purchases during the reporting period, before refunds and cancellations, made either through one of our online marketplaces or directly with a merchant for which we earned a commission. We consider unit growth to be an important indicator of the total volume of business conducted through our marketplaces.
Gross profit per active customer. This metric represents the TTM gross profit generated per active customer. We use this metric to evaluate trends in the average contribution to gross profit on a per-customer basis. We updated the calculation of this metric in the current period to reflect active customers as of the end of the period, rather than the average of active customers as of the beginning and end of period, in the denominator of the calculation. Because our active customer metrics are based on purchases over a TTM period, we believe that this change improves the usefulness of this metric. The prior periods presented have been updated to reflect this change.
Note on Forward-Looking Statements
The statements contained in this release that refer to plans and expectations for the next quarter, the full year or the future are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations. The words "may," "will," "should," "could," "expect," "anticipate," "believe," "estimate," "intend," "continue" and other similar expressions are intended to identify forward-looking statements. We have based these forward looking statements largely on current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, but are not limited to, risk related to volatility in our operating results; execution of our business and marketing strategies; retaining existing customers and adding new customers; challenges arising from our international operations, including fluctuations in currency exchange rates, legal and regulatory developments and any potential adverse impact from the United Kingdom's likely exit from the European Union; retaining and adding high quality merchants; our voucherless offerings; cybersecurity breaches; competing successfully in our industry; changes to merchant payment terms; providing a strong mobile experience for our customers; maintaining our information technology infrastructure; delivery and routing of our emails; claims related to product and service offerings; managing inventory and order fulfillment risks; litigation; managing refund risks; retaining and attracting members of our executive team; completing and realizing the anticipated benefits from acquisitions, dispositions, joint ventures and strategic investments; lack of control over minority investments; tax liabilities; tax legislation; compliance with domestic and foreign laws and regulations, including the CARD Act, GDPR and regulation of the Internet and e-commerce; classification of our independent contractors; protecting our intellectual property; maintaining a strong brand; customer and merchant fraud; payment-related risks; our ability to raise capital if necessary and our outstanding indebtedness; global economic uncertainty; our common stock, including volatility in our stock price; our senior convertible notes; our ability to realize the anticipated benefits from the hedge and warrant transactions. For additional information regarding these and other risks and uncertainties, we urge you to refer to the factors included under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's Annual Report on Form 10-K for the year ended December 31, 2017, and our other filings with the Securities and Exchange Commission, copies of which may be obtained by visiting the company's Investor Relations web site at investor.groupon.com or the SEC's web site at www.sec.gov. Groupon's actual results could differ materially from those predicted or implied and reported results should not be considered an indication of future performance.




You should not rely upon forward-looking statements as predictions of future events. Although Groupon believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither the company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. The forward-looking statements reflect Groupon’s expectations as of May 9, 2018. Groupon undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in its expectations.
About Groupon
Groupon (NASDAQ: GRPN) is building the daily habit in local commerce, offering a vast mobile and online marketplace where people discover and save on amazing things to do, eat, see and buy. By enabling real-time commerce across local businesses, travel destinations, consumer products and live events, shoppers can find the best a city has to offer.
Groupon is redefining how small businesses attract and retain customers by providing them with customizable and scalable marketing tools and services to profitably grow their businesses.
To download Groupon's top-rated mobile apps, visit www.groupon.com/mobile. To search for great deals or subscribe to Groupon emails, visit www.groupon.com. To learn more about the company’s merchant solutions and how to work with Groupon, visit www.groupon.com/merchant.
Contacts:
Investor Relations                    Public Relations
Heather Davis                        Bill Roberts
312-662-7370                        312-459-5191





Groupon, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
 
March 31, 2018
 
December 31, 2017
 
(unaudited)
 
 
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
725,909

 
$
880,129

Accounts receivable, net
81,571

 
98,294

Prepaid expenses and other current assets
89,282

 
94,025

Total current assets
896,762

 
1,072,448

Property, equipment and software, net
146,717

 
151,145

Goodwill
289,945

 
286,989

Intangible assets, net
16,925

 
19,196

Investments (including $103,579 and $109,751 at March 31, 2018 and December 31, 2017, respectively, at fair value)
129,373

 
135,189

Other non-current assets
23,206

 
12,538

Total Assets
$
1,502,928

 
$
1,677,505

Liabilities and Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
23,400

 
$
31,968

Accrued merchant and supplier payables
568,570

 
770,335

Accrued expenses and other current liabilities
265,920

 
331,196

Total current liabilities
857,890

 
1,133,499

Convertible senior notes, net
192,619

 
189,753

Other non-current liabilities
102,047

 
102,408

Total Liabilities
1,152,556

 
1,425,660

Commitments and contingencies
 
 
 
Stockholders' Equity
 
 
 
Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized; 752,664,286 shares issued and 564,062,044 shares outstanding at March 31, 2018; 748,541,862 shares issued and 559,939,620 shares outstanding at December 31, 2017
75

 
75

Additional paid-in capital
2,192,469

 
2,174,708

Treasury stock, at cost, 188,602,242 shares at March 31, 2018 and December 31, 2017
(867,450
)
 
(867,450
)
Accumulated deficit
(1,006,308
)
 
(1,088,204
)
Accumulated other comprehensive income (loss)
29,936

 
31,844

Total Groupon, Inc. Stockholders' Equity
348,722

 
250,973

Noncontrolling interests
1,650

 
872

Total Equity
350,372

 
251,845

Total Liabilities and Equity
$
1,502,928

 
$
1,677,505






Groupon, Inc.
Condensed Consolidated Statements of Operations 
(in thousands, except share and per share amounts)
(unaudited)
 
Three Months Ended March 31,
 
2018
 
2017
Revenue:
 
 
 
Service
$
301,797

 
$
301,577

Product
324,743

 
372,049

Total revenue
626,540

 
673,626

Cost of revenue:
 
 
 
Service
31,145

 
42,873

Product
270,510

 
321,302

Total cost of revenue
301,655

 
364,175

Gross profit
324,885

 
309,451

Operating expenses:
 
 
 
Marketing
99,156

 
86,342

Selling, general and administrative
222,061

 
232,058

Restructuring charges
283

 
2,731

  Total operating expenses
321,500

 
321,131

Income (loss) from operations
3,385

 
(11,680
)
Other income (expense), net
(8,515
)
 
(4,602
)
Income (loss) from continuing operations before provision (benefit) for income taxes
(5,130
)
 
(16,282
)
Provision (benefit) for income taxes
(2,335
)
 
4,587

Income (loss) from continuing operations
(2,795
)
 
(20,869
)
Income (loss) from discontinued operations, net of tax
—

 
487

Net income (loss)
(2,795
)
 
(20,382
)
Net income attributable to noncontrolling interests
(4,093
)
 
(4,032
)
Net income (loss) attributable to Groupon, Inc.
$
(6,888
)
 
$
(24,414
)
 
 
 
 
Basic and diluted net income (loss) per share:
 
 
 
Continuing operations
$
(0.01
)
 
$
(0.04
)
Discontinued operations
0.00

 
0.00

Basic and diluted net income (loss) per share
$
(0.01
)
 
$
(0.04
)
 
 
 
 
Weighted average number of shares outstanding
 
 
 
Basic
561,735,937

 
562,195,243

Diluted
561,735,937

 
562,195,243







Groupon, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited) 
 
Three Months Ended March 31,
 
2018
 
2017
Operating activities
 
 
 
Net income (loss)
$
(2,795
)
 
$
(20,382
)
Less: Income (loss) from discontinued operations, net of tax
—

 
487

Income (loss) from continuing operations
(2,795
)
 
(20,869
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Depreciation and amortization of property, equipment and software
26,721

 
28,667

Amortization of acquired intangible assets
2,940

 
5,400

Stock-based compensation
19,326

 
19,701

Deferred income taxes
(6,575
)
 
(74
)
(Gain) loss from changes in fair value of investments
5,033

 
(303
)
Impairment of investment
855

 
—

Amortization of debt discount on convertible senior notes
2,866

 
2,587

Change in assets and liabilities, net of acquisitions and dispositions:
 
 
 
Accounts receivable
17,623

 
10,594

Prepaid expenses and other current assets
9,601

 
5,380

Accounts payable
(8,341
)
 
(13,184
)
Accrued merchant and supplier payables
(143,330
)
 
(138,238
)
Accrued expenses and other current liabilities
(41,564
)
 
(36,040
)
Other, net
(2,107
)
 
(1,707
)
Net cash provided by (used in) operating activities from continuing operations
(119,747
)
 
(138,086
)
Net cash provided by (used in) operating activities from discontinued operations
—

 
(1,098
)
Net cash provided by (used in) operating activities
(119,747
)
 
(139,184
)
Investing activities
 
 
 
Purchases of property and equipment and capitalized software
(20,144
)
 
(14,076
)
Acquisitions of intangible assets and other investing activities
(238
)
 
56

Net cash provided by (used in) investing activities from continuing operations
(20,382
)
 
(14,020
)
Net cash provided by (used in) investing activities from discontinued operations
—

 
(7,547
)
Net cash provided by (used in) investing activities
(20,382
)
 
(21,567
)
Financing activities
 
 
 
Payments for purchases of treasury stock
—

 
(27,234
)
Taxes paid related to net share settlements of stock-based compensation awards
(9,179
)
 
(8,970
)
Proceeds from stock option exercises and employee stock purchase plan
2,434

 
2,468

Distributions to noncontrolling interest holders
(3,315
)
 
(3,450
)
Payments of capital lease obligations
(9,024
)
 
(8,067
)
Payments of contingent consideration related to acquisitions
(1,815
)
 
—

Other financing activities
—

 
(473
)
Net cash provided by (used in) financing activities
(20,899
)
 
(45,726
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash, including cash classified within current assets of discontinued operations
6,191

 
3,973

Net increase (decrease) in cash, cash equivalents and restricted cash, including cash classified within current assets of discontinued operations
(154,837
)
 
(202,504
)
Less: Net increase (decrease) in cash classified within current assets of discontinued operations
—

 
(28,866
)
Net increase (decrease) in cash, cash equivalents and restricted cash
(154,837
)
 
(173,638
)
Cash, cash equivalents and restricted cash, beginning of period
885,481

 
874,906

Cash, cash equivalents and restricted cash, end of period
$
730,644

 
$
701,268








Groupon, Inc.
Supplemental Financial and Operating Metrics
(dollars in thousands; active customers in millions)
(unaudited)
 
 
Q1 2017
 
Q2 2017
 
Q3 2017
 
Q4 2017
 
Q1 2018
 
 
 
 
 
 
 
North America Segment:
 
 
 
 
 
 
 
 
 
 
Q1 2018
 
 
 
 
 
Gross Billings (1):
 
 
 
 
 
 
 
 
 
 
Y/Y Growth
 
 
 
 
 
 
Local
$
587,766

 
$
615,833

 
$
606,184

 
$
605,460

 
$
543,021

 
(7.6)
%
 
 
 
 
 
Travel
114,163

 
112,670

 
93,186

 
84,504

 
102,499

 
(10.2)
 
 
 
 
 
 
Goods
262,588

 
245,924

 
229,479

 
369,973

 
209,476

 
(20.2)
 
 
 
 
 
 
Total Gross Billings
$
964,517

 
$
974,427

 
$
928,849

 
$
1,059,937

 
$
854,996

 
(11.4)
%
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
Local
$
200,545

 
$
207,534

 
$
194,090

 
$
223,410

 
$
187,411

 
(6.5)
%
 
 
 
 
 
Travel
20,462

 
22,320

 
18,300

 
17,413

 
20,084

 
(1.8)
 
 
 
 
 
 
Goods
252,350

 
222,058

 
201,824

 
333,862

 
185,761

 
(26.4)
 
 
 
 
 
 
Total Revenue
$
473,357

 
$
451,912

 
$
414,214

 
$
574,685

 
$
393,256

 
(16.9)
%
 
 
 
 
Gross Profit:
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
Local
$
169,342

 
$
179,609

 
$
162,914

 
$
196,708

 
$
166,756

 
(1.5)
%
 
 
 
 
 
Travel
15,165

 
17,755

 
14,060

 
13,614

 
16,002

 
5.5
 
 
 
 
 
 
Goods
36,430

 
36,496

 
30,934

 
54,651

 
36,922

 
1.4
 
 
 
 
 
 
Total Gross Profit
$
220,937

 
$
233,860

 
$
207,908

 
$
264,973

 
$
219,680

 
(0.6)
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income (loss)
$
(14,783
)
 
$
(12,033
)
 
$
(6,995
)
 
$
33,766

 
$
(1,860
)
 
87.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
International Segment:
 
 
 
 
 
 
 
 
 
 
Q1 2018
 
Gross Billings:
 
 
 
 
 
 
 
 
 
 
Y/Y Growth
 
FX Effect (2)
 
Y/Y Growth excluding FX (2)
 
 
Local
$
191,219

 
$
189,408

 
$
202,991

 
$
229,167

 
$
217,307

 
13.6
%
(12.5)
 
1.1
%
 
Travel
53,161

 
45,981

 
49,837

 
59,666

 
57,522

 
8.2
 
(12.7)
 
(4.5)
 
 
Goods
149,079

 
154,417

 
159,820

 
233,422

 
163,439

 
9.6
 
(14.1)
 
(4.5)
 
 
Total Gross Billings
$
393,459

 
$
389,806

 
$
412,648

 
$
522,255

 
$
438,268

 
11.4
%
(13.2)
 
(1.8)
%
Revenue:
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
Local
$
63,575

 
$
66,108

 
$
71,574

 
$
80,209

 
$
74,578

 
17.3
%
(13.3)
 
4.0
%
 
Travel
11,002

 
10,796

 
9,801

 
12,187

 
11,436

 
3.9
 
(12.4)
 
(8.5)
 
 
Goods
125,692

 
133,803

 
138,877

 
206,085

 
147,270

 
17.2
 
(15.5)
 
1.7
 
 
Total Revenue
$
200,269

 
$
210,707

 
$
220,252

 
$
298,481

 
$
233,284

 
16.5
%
(14.6)
 
1.9
%
Gross Profit:
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
Local
$
59,194

 
$
62,303

 
$
67,860

 
$
75,991

 
$
70,215

 
18.6
%
(13.5)
 
5.1
%
 
Travel
10,036

 
9,996

 
8,922

 
11,334

 
10,651

 
6.1
 
(12.8)
 
(6.7)
 
 
Goods
19,284

 
21,908

 
24,735

 
34,620

 
24,339

 
26.2
 
(16.2)
 
10.0
 
 
Total Gross Profit
$
88,514

 
$
94,207

 
$
101,517

 
$
121,945

 
$
105,205

 
18.9
%
(14.0)
 
4.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income (loss)
$
3,103

 
$
4,635

 
$
5,782

 
$
15,960

 
$
5,245

 
69.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
Consolidated Results of Operations:
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
Gross Billings:
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
Local
$
778,985

 
$
805,241

 
$
809,175

 
$
834,627

 
$
760,328

 
(2.4)
%
(3.1)
 
(5.5)
%
 
Travel
167,324

 
158,651

 
143,023

 
144,170

 
160,021

 
(4.4)
 
(4.0)
 
(8.4)
 
 
Goods
411,667

 
400,341

 
389,299

 
603,395

 
372,915

 
(9.4)
 
(5.1)
 
(14.5)
 
 
Total Gross Billings
$
1,357,976

 
$
1,364,233

 
$
1,341,497

 
$
1,582,192

 
$
1,293,264

 
(4.8)
%
(3.8)
 
(8.6)
%
Revenue:
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
Local
$
264,120

 
$
273,642

 
$
265,664

 
$
303,619

 
$
261,989

 
(0.8)
%
(3.2)
 
(4.0)
%
 
Travel
31,464

 
33,116

 
28,101

 
29,600

 
31,520

 
0.2
 
(4.4)
 
(4.2)
 
 
Goods
378,042

 
355,861

 
340,701

 
539,947

 
333,031

 
(11.9)
 
(5.1)
 
(17.0)
 
  Total Revenue
$
673,626

 
$
662,619

 
$
634,466

 
$
873,166

 
$
626,540

 
(7.0)
%
(4.3)
 
(11.3)
%
Gross Profit:
 
 
 
 
 
 
 
 
 
 

 

 
 
 
 
Local
$
228,536

 
$
241,912

 
$
230,774

 
$
272,699

 
$
236,971

 
3.7
%
(3.5)
 
0.2
%
 
Travel
25,201

 
27,751

 
22,982

 
24,948

 
26,653

 
5.8
 
(5.1)
 
0.7
 
 
Goods
55,714

 
58,404

 
55,669

 
89,271

 
61,261

 
10.0
 
(6.0)
 
4.0
 
 
Total Gross Profit
$
309,451

 
$
328,067

 
$
309,425

 
$
386,918

 
$
324,885

 
5.0
%
(4.0)
 
1.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income (loss)
$
(11,680
)
 
$
(7,398
)
 
$
(1,213
)
 
$
49,726

 
$
3,385

 
129.0
%
 
 
 
 
Net cash provided by (used in) operating activities from continuing operations
$
(138,086
)
 
$
(19,390
)
 
$
21,772

 
$
266,249

 
$
(119,747
)
 
13.3
%
 
 
 
 
Free Cash Flow
$
(152,162
)
 
$
(34,775
)
 
$
7,517

 
$
250,807

 
$
(139,891
)
 
8.1
%
 
 
 
 




 
 
Q1 2017
 
Q2 2017
 
Q3 2017
 
Q4 2017
 
Q1 2018
 
Active Customers (3)
 
 
 
 
 
 
 
 
 
 
 
North America
31.6

 
31.9

 
32.5

 
32.7

 
32.6

 
 
International
16.7

 
16.4

 
16.6

 
16.8

 
17.0

 
 
Total Active Customers
48.3

 
48.3

 
49.1

 
49.5

 
49.6

 
 
 
 
 
 
 
 
 
 
 
 
 
TTM Gross Profit / Active Customer (4)
 
 
 
 
 
 
 
 
 
 
North America
$
28.15

 
$
28.41

 
$
28.09

 
$
28.35

 
$
28.38

 
International
22.72

 
22.88

 
23.19

 
24.16

 
24.83

 
Consolidated
26.27

 
26.53

 
26.43

 
26.93

 
27.16

 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Units
45.7

 
44.5

 
44.1

 
54.6

 
42.4

 
 
Year-over-year unit growth:
 
 
 
 
 
 
 
 
 
 
 
North America
(0.4
)
%
(1.9
)
%
(0.1
)
%
(6.6
)
%
(11.3
)
%
 
International
(8.7
)
 
(7.8
)
 
(1.5
)
 
(3.9
)
 
2.0

 
 
Consolidated
(3.1
)
 
(3.8
)
 
(0.5
)
 
(5.7
)
 
(7.2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Headcount
 
 
 
 
 
 
 
 
 
 
 
Sales (5)
2,624

 
2,485

 
2,457

 
2,407

 
2,404

 
 
Other
4,496

 
4,176

 
4,159

 
4,265

 
4,235

 
 
Total Headcount
7,120

 
6,661

 
6,616

 
6,672

 
6,639

 
(1)
Represents the total dollar value of customer purchases of goods and services.
(2)
Represents the change in financial measures that would have resulted had average exchange rates in the reporting periods been the same as those in effect in the prior year periods.
(3)
Reflects the total number of unique user accounts that have made a purchase during the TTM either through one of our online marketplaces or directly with a merchant for which we earned a commission.
(4)
During the first quarter 2018, we updated the calculation of TTM Gross Profit / Active Customer to reflect active customers as of the end of the period, rather than the average of active customers as of the beginning and end of period, in the denominator of the calculation. Because our active customer metrics are based on purchases over a TTM period, we believe that this change improves the usefulness of this metric. The prior period amounts have been updated to reflect this change.
(5)
Includes merchant sales representatives, as well as sales support personnel.





Groupon, Inc.
Non-GAAP Reconciliation Schedules
(in thousands, except share and per share amounts)
(unaudited)  
Adjusted EBITDA, non-GAAP earnings attributable to common stockholders and non-GAAP earnings per share are non-GAAP performance measures. The Company reconciles Adjusted EBITDA to the most comparable U.S. GAAP performance measure, Net income (loss) from continuing operations for the periods presented and the Company reconciles non-GAAP earnings per share to the most comparable U.S. GAAP performance measure, Diluted net income (loss) per share, for the periods presented.
The following is a quarterly reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP performance measure, Income (loss) from continuing operations.
 
 
Q1 2017
 
Q2 2017
 
Q3 2017
 
Q4 2017
 
Q1 2018
Income (loss) from continuing operations
 
$
(20,869
)
 
$
(5,403
)
 
$
3,802

 
$
51,071

 
$
(2,795
)
Adjustments:
 
 
 
 
 
 
 
 
 
 
  Stock-based compensation (1)
 
19,650

 
21,392

 
18,235

 
21,673

 
19,278

  Depreciation and amortization
 
34,067

 
34,679

 
35,231

 
33,850

 
29,661

  Acquisition-related expense (benefit), net
 
12

 
36

 
—

 
—

 
—

  Restructuring charges
 
2,731

 
4,584

 
11,503

 
10

 
283

  Gain on sale of intangible assets
 
—

 
—

 
(17,149
)
 
—

 
—

  Other (income) expense, net
 
4,602

 
(5,878
)
 
(7,546
)
 
2,112

 
8,515

 Provision (benefit) for income taxes
 
4,587

 
3,883

 
2,531

 
(3,457
)
 
(2,335
)
Total adjustments
 
65,649

 
58,696

 
42,805

 
54,188

 
55,402

Adjusted EBITDA
 
$
44,780

 
$
53,293

 
$
46,607

 
$
105,259

 
$
52,607

(1)
Represents stock-based compensation recorded within Selling, general and administrative, Cost of revenue and Marketing. Other (income) expense, net, includes $0.05 million, $0.05 million, $0.07 million, $0.06 million and $0.05 million of additional stock-based compensation for the three months ended March 31, 2017, June 30, 2017, September 30, 2017, December 31, 2017 and March 31, 2018, respectively. Restructuring charges include $0.8 million of additional stock-based compensation for the three months ended September 30, 2017.
The following is a reconciliation of the Company's annual outlook for Adjusted EBITDA to the Company's outlook for the most comparable U.S. GAAP performance measure, Income (loss) from continuing operations.
 
Year Ending December 31, 2018
Expected income (loss) from continuing operations range
$
45,000 to 55,000

Expected adjustments:
 
 
Stock-based compensation
 
97,000

Depreciation and amortization
 
110,000

Other (income) expense, net
 
21,000

Provision (benefit) for income taxes
 
7,000

Total expected adjustments
 
235,000

Expected Adjusted EBITDA range
$
280,000 to 290,000

The outlook provided above does not reflect the potential impact of any business or asset acquisitions or dispositions, changes in the fair values of investments, foreign currency gains or losses or unusual or infrequently occurring items that may occur during the remainder of 2018.
    




The following is a reconciliation of net income (loss) attributable to common stockholders to non-GAAP net income (loss) attributable to common stockholders and a reconciliation of diluted net income (loss) per share to non-GAAP net income (loss) per share for the three months ended March 31, 2018 and 2017:
 
Three Months Ended March 31,
 
2018
 
2017
Net income (loss) attributable to common stockholders
$
(6,888
)
 
$
(24,414
)
Less: Net income attributable to noncontrolling interest
(4,093
)
 
(4,032
)
Net income (loss)
(2,795
)
 
(20,382
)
Less: Income (loss) from discontinued operations, net of tax
—

 
487

Income (loss) from continuing operations
(2,795
)
 
(20,869
)
Less: Provision (benefit) for income taxes
(2,335
)
 
4,587

Income (loss) from continuing operations before provision (benefit) for income taxes
(5,130
)
 
(16,282
)
Stock-based compensation
19,326

 
19,701

Amortization of acquired intangible assets
2,940

 
5,400

Acquisition-related expense (benefit), net
—

 
12

Restructuring charges
283

 
2,731

Losses (gains), net from changes in fair value of investments
5,033

 
(303
)
Intercompany foreign currency losses (gains) and reclassifications of translation adjustments to earnings
(3,427
)
 
(110
)
Non-cash interest expense on convertible senior notes
2,866

 
2,587

Non-GAAP income (loss) from continuing operations before provision (benefit) for income taxes
21,891

 
13,736

Non-GAAP provision (benefit) for income taxes
1,561

 
4,532

Non-GAAP net income (loss)
20,330

 
9,204

Net income attributable to noncontrolling interest
(4,093
)
 
(4,032
)
Non-GAAP net income (loss) attributable to common stockholders
$
16,237

 
$
5,172

 
 
 
 
Weighted-average shares of common stock - diluted
561,735,937

 
562,195,243

Incremental dilutive securities
9,955,028

 
7,527,970

Weighted-average shares of common stock - non-GAAP
571,690,965

 
569,723,213

 
 
 
 
Diluted net loss per share
$
(0.01
)
 
$
(0.04
)
Impact of non-GAAP adjustments and related tax effects
0.04

 
0.05

Non-GAAP net income per share
$
0.03

 
$
0.01

Free cash flow is a non-GAAP financial measure. The following is a reconciliation of free cash flow to the most comparable U.S. GAAP financial measure, Net cash provided by (used in) operating activities from continuing operations.
 
 
Q1 2017
 
Q2 2017
 
Q3 2017
 
Q4 2017
 
Q1 2018
Net cash provided by (used in) operating activities from continuing operations (1)
$
(138,086
)
 
$
(19,390
)
 
$
21,772

 
$
266,249

 
$
(119,747
)
Purchases of property and equipment and capitalized software from continuing operations
(14,076
)
 
(15,385
)
 
(14,255
)
 
(15,442
)
 
(20,144
)
Free cash flow (1)
$
(152,162
)
 
$
(34,775
)
 
$
7,517

 
$
250,807

 
$
(139,891
)
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) investing activities from continuing operations
$
(14,020
)
 
$
(13,782
)
 
$
18,230

 
$
(15,751
)
 
$
(20,382
)
Net cash provided by (used in) financing activities
$
(45,726
)
 
$
(47,924
)
 
$
(27,972
)
 
$
(16,424
)
 
$
(20,899
)
(1)
Prior period cash flows from operating activities of continuing operations has been updated from negative $136.2 million, negative $20.7 million, $23.9 million and $270.6 million previously reported for the three months ended March 31, 2017, June 30, 2017, September 30, 2017 and December 31, 2017, respectively, and prior period free cash flow has been updated from negative $150.3 million, negative $36.1 million, $9.6 million and $255.1 million previously reported for the three months ended March 31, 2017, June 30, 2017, September 30, 2017 and December 31, 2017, respectively, to reflect the adoption of ASU 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash, on January 1, 2018. For additional information on the adoption of ASU 2016-18, refer to Note 2, Adoption of New Accounting Standards, in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.




Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings