Form 8-K Groupon, Inc. For: Feb 12
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): February 12, 2015
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 February 12, 2015, the Company issued a press release announcing its financial results for its fiscal year ended December 31, 2014. A copy of the press release is attached hereto as Exhibit 99.1.
Item 9.01. | Financial Statements and Exhibits. | |
(d) Exhibits | ||
Exhibit No. | Description | |
99.1* | Earnings Press Release dated February 12, 2015 | |
*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 (the "Exchange Act"), 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: February 12, 2015 | By: | /s/ Jason E. Child |
Name: | Jason E. Child | |
Title: | Chief Financial Officer | |
Exhibit Index
Exhibit No. | Description | |
99.1* | Earnings Press Release dated February 12, 2015 | |
*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 (the "Exchange Act"), 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.
Exhibit 99.1
Groupon Announces Fourth Quarter and Fiscal Year 2014 Results
• | Fourth quarter gross billings of $2.1 billion, $7.6 billion for the full year |
• | Fourth quarter revenue of $925.4 million, $3.2 billion for the full year |
• | Fourth quarter Adjusted EBITDA of $87.0 million, $253.4 million for the full year |
• | Fourth quarter GAAP earnings per share of $0.01; non-GAAP earnings per share of $0.06 |
CHICAGO - (BUSINESS WIRE) - February 12, 2015 - Groupon, Inc. (NASDAQ: GRPN) today announced financial results for the quarter and fiscal year ended December 31, 2014.
“2014 was a transformational year for Groupon, as we made significant progress in our strategy to become the world’s leading local commerce destination,” said Eric Lefkofsky, CEO of Groupon. “Global billings hit their highest level ever in the quarter, growing more than 30%, driven in part by our reignited North America Local business. We now turn our attention to further building out our marketplace to ensure that our more than 260 million subscribers have an amazing experience every time they use Groupon.”
Fourth Quarter 2014 Summary
• | Gross billings, which reflect the total dollar value of customer purchases of goods and services, increased 31% globally to $2.1 billion in the fourth quarter 2014, compared with $1.6 billion in the fourth quarter 2013. Excluding the $82.2 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, billings increased 36% compared with fourth quarter 2013. On this F/X neutral basis, North America billings increased 20%, EMEA increased 8% and Rest of World increased 154%, driven by the first-quarter acquisition of Ticket Monster. |
• | Revenue increased 20%, to $925.4 million in the fourth quarter 2014, compared with $768.4 million in the fourth quarter 2013. Excluding the $32.5 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, revenue increased 25% compared with fourth quarter 2013. On this F/X neutral basis, North America revenue increased 24%, EMEA increased 18% and Rest of World increased 50%. |
• | Gross profit was $393.5 million in the fourth quarter 2014, compared with $378.2 million in the fourth quarter 2013. |
• | Adjusted EBITDA, a non-GAAP financial measure, was $87.0 million in the fourth quarter 2014, compared with $72.0 million in the fourth quarter 2013, as higher gross profit was partially offset by increased investment related to the Ticket Monster and ideel acquisitions, as well as an unfavorable impact from year-over-year changes in foreign exchange rates. |
• | Net income attributable to common stockholders was $8.8 million, or $0.01 per share. Non-GAAP earnings per share was $0.06. |
• | Fourth quarter 2014 results included $11.4 million of pre-tax non-operating foreign currency losses and a $16.7 million decrease to income tax expense from a reduction in liabilities for uncertain tax positions. |
• | Operating cash flow for the trailing twelve months ended December 31, 2014 was $288.8 million. Free cash flow, a non-GAAP financial measure, was $266.0 million in the fourth quarter 2014, bringing free cash flow for the trailing twelve months ended December 31, 2014 to $200.5 million. |
• | At the end of the quarter, Groupon had $1.1 billion in cash and cash equivalents. |
Full Year 2014 Summary
• | Gross billings increased 32% globally to $7.6 billion in 2014, compared with $5.8 billion in 2013. Excluding the $39.9 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, billings increased 32% compared with 2013. On this F/X neutral basis, North America billings increased 16%, EMEA increased 4% and Rest of World increased 144%, driven by the first-quarter acquisition of Ticket Monster. |
• | Revenue increased 24%, to $3.2 billion in 2014, compared with $2.6 billion in 2013. Excluding the $26.1 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, revenue increased 25% compared with 2013. On this F/X neutral basis, North America revenue increased 20%, EMEA increased 30% and Rest of World increased 38%. |
• | Gross profit was $1.55 billion in 2014, compared with $1.50 billion in 2013. |
• | Adjusted EBITDA was $253.4 million in 2014, compared with $286.7 million in 2013, reflecting SG&A expense related to the Ticket Monster and ideel acquisitions, as well as an increase in overall marketing expense. |
• | Net loss attributable to common stockholders was $73.1 million, or $0.11 per share. Non-GAAP earnings per share was $0.08. |
• | 2014 results included $31.5 million of pre-tax non-operating foreign currency losses and $24.4 million of decreases to income tax expense from reductions in liabilities for uncertain tax positions. |
Definitions and reconciliations of all non-GAAP financial measures are included below in the section titled “Non-GAAP Financial Measures” and in the accompanying tables.
Highlights
• | Units: Global units, defined as vouchers and products sold before cancellations and refunds, exceeded 100 million for the first quarter ever, increasing 81% year-over-year to 101 million |
in the fourth quarter 2014. North America units increased 11%, EMEA units increased 20% and Rest of World units increased 340%, driven by the first-quarter acquisition of Ticket Monster.
• | Active deals: At the end of the fourth quarter 2014, on average, active deals were approximately 370,000 globally, compared with approximately 300,000 at the end of the third quarter 2014. North American active deals increased to over 135,000. |
• | Active customers: Active customers, or customers that have purchased a voucher or product within the last twelve months, grew 23% year-over-year, to 53.9 million as of December 31, 2014, comprising 24.1 million in North America, 15.2 million in EMEA, and 14.6 million in Rest of World. |
• | Customer spend: Fourth quarter 2014 trailing twelve month billings per average active customer was $155, compared with $149 in the third quarter 2014. |
• | Traffic: Almost 110 million people have now downloaded Groupon mobile apps worldwide. In addition, monthly unique visitors, or the count of users accessing Groupon on both web and mobile devices, was over 160 million globally at the end of the fourth quarter 2014. |
• | Search: In the fourth quarter 2014, approximately 26% of total transactions in North America were related to search, compared with 19% in the fourth quarter 2013. |
• | Rest of World: Rest of World generated billings growth of 141% and a segment operating loss of $16.2 million in the fourth quarter 2014, $13.1 million of which was related to Ticket Monster, reflecting continued investment in that business. The company announced last quarter that it is exploring a range of financing and strategic alternatives for its Asian businesses, including Ticket Monster. As part of that process, multiple parties have expressed preliminary interest in Ticket Monster, although it is too early to comment on structure, pricing or the likelihood of a transaction, as the process is still underway. Excluding Ticket Monster, Rest of World was near break even in the quarter, compared with a $14.7 million segment operating loss in the fourth quarter 2013. |
Share Repurchase Program
During the fourth quarter 2014, Groupon repurchased 1,152,100 shares of its Class A common stock at an average price of $7.04 per share, for an aggregate purchase price of $8.1 million. Under the existing authorization, Groupon has repurchased a total of 27,239,104 shares at an average price of $7.29 per share, for an aggregate purchase price of $198.5 million. Groupon is authorized to repurchase up to an additional $101.5 million of Class A common stock under the August 2013 share repurchase authorization. The program, which is intended to partially offset dilution from employee stock grants, terminates in August 2015.
Outlook
For the first quarter 2015, reflecting current foreign exchange rates, Groupon expects revenue of between $790 million and $840 million. This guidance anticipates approximately 500 basis points of unfavorable impact on the year-over-year growth rate from changes in foreign exchange rates.
In addition, based on current foreign exchange rates, and $15 million of continued investment in Tmon, Groupon expects Adjusted EBITDA for the first quarter 2015 of between $45 million and $65 million, and non-GAAP earnings per share of between $0.00 and $0.02.
For the full year 2015, Groupon is reiterating the target shared at its November 2014 Investor Day of at least 25% year-over-year growth in Adjusted EBITDA, or slightly higher on an F/X neutral basis. As such, Groupon expects Adjusted EBITDA for the full year of greater than $315 million.
Conference Call
A conference call will be webcast live today at 4:00 p.m. CT / 5:00 p.m. ET, 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.
Non-GAAP Financial Measures
In addition to financial results reported in accordance with U.S. generally accepted accounting principles (U.S. GAAP), we have provided the following non-GAAP financial measures in this release and the accompanying tables: foreign exchange rate neutral operating results, adjusted EBITDA, free cash flow and non-GAAP earnings (loss) per share. These non-GAAP financial measures are presented to aid investors in better understanding Groupon's performance and to facilitate comparisons to many of our peers who present similar measures. However, these measures are not intended to be a substitute for those reported in accordance with U.S. GAAP. These measures may be different from non-GAAP financial measures used by other companies, even when similar terms are used to identify such measures. For reconciliations of these measures to the most applicable financial measures under U.S. GAAP, see "Non-GAAP Reconciliation Schedules" and "Supplemental Financial Information and Business 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.
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 our current period operating results as if foreign currency exchange rates had remained the same as those in effect in the comparable prior-year period.
Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, and acquisition-related expense (benefit), net. 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 plans and make strategic decisions regarding 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.
Non-GAAP earnings (loss) per share adjusts our earnings (loss) per share to exclude the impact of stock-based compensation expense, amortization of acquired intangible assets, and acquisition-related expense (benefit), net, and the income tax effect of those items. We believe that this non-GAAP financial measure provides useful supplemental information for evaluating our operating performance.
We previously updated our non-GAAP earnings (loss) per share measure, effective beginning with the first quarter 2014, to exclude amortization of acquired intangible assets, net of tax, in addition to stock compensation and acquisition-related expenses, which we excluded historically. Due to our significant acquisition activity in January 2014 and potential acquisition activity in the future, we believe that excluding the impact of this item from our non-GAAP earnings (loss) per share measure enables more meaningful comparisons with our historical results. Beginning in the first quarter 2015, we will be updating our non-GAAP earnings per share measure to also exclude non-operating foreign currency gains and losses on intercompany balances. We believe that excluding this item will enable more meaningful comparisons with our historical results.
Free cash flow is a non-GAAP financial measure that comprises net cash provided by (used in) operating activities less purchases of property and equipment and capitalized software. We use free cash flow, and ratios based on it, to conduct and evaluate our business because, although it is similar to cash flow from 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 Groupon's cash balance for the applicable period.
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 that involve a number of risks and uncertainties, and actual results could differ materially from those discussed. The risks and uncertainties that could cause our results to differ materially from those included in the forward-looking statements include, but are not limited to, volatility in our revenue and operating results; risks related to our business strategy including our marketing strategy and spend; effectively dealing with challenges arising from our international operations; retaining existing customers and adding new customers; retaining and adding new and high quality merchants; cyber security breaches; incurring expenses as we expand our business; competing successfully in our industry; maintaining favorable payment terms with our business partners; providing a strong mobile experience for our customers; delivery and routing of our emails; maintaining a strong brand; managing inventory and order fulfillment risks; integrating our technology platforms; managing refund risks; retaining our executive team; litigation; compliance with domestic and foreign laws and regulations, including the CARD Act and regulation of the Internet and e-commerce; tax liabilities; tax legislation; maintaining our information technology infrastructure; protecting our intellectual property; handling acquisitions, joint ventures and strategic investments effectively; seasonality; payment-related risks; customer and merchant fraud; global economic uncertainty; and our ability to raise capital if necessary. 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 and subsequent Quarterly Reports on Form 10-Q, copies of which may be obtained by visiting the company's Investor Relations web site at http://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 February 12, 2015. 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 a global leader of local commerce and the place you start when you want to buy just about anything, anytime, anywhere. By leveraging the company’s global relationships and scale, Groupon offers consumers a vast marketplace of unbeatable deals all over the world. Shoppers discover the best a city has to offer on the web or on mobile with Groupon Local, enjoy vacations with Groupon Getaways, and find a curated selection of electronics, fashion, home furnishings and more with Groupon Goods.
Groupon is redefining how traditional small businesses attract, retain and interact with customers by providing merchants with a suite of products and services, including customizable deal campaigns, credit card payment processing capabilities, and point-of-sale solutions that help businesses grow and operate more effectively. To search for great deals or subscribe to Groupon emails, visit www.Groupon.com. To download Groupon's top-rated mobile apps, visit www.groupon.com/mobile. To learn more about the company’s merchant solutions and how to work with Groupon, visit www.GrouponWorks.com
Contacts: | |
Investor Relations | Public Relations |
Genny Konz | Bill Roberts |
312-999-3098 | 312-459-5191 |
Groupon, Inc.
Summary Consolidated and Segment Results
(in thousands, except share and per share amounts)
(unaudited)
Three Months Ended December 31, | Y/Y % Growth | Y/Y % Growth excluding FX(2) | Year Ended December 31, | Y/Y % Growth | Y/Y % Growth excluding FX(2) | |||||||||||||||||||||||||||||||||||
2014 | 2013 | FX Effect(2) | 2014 | 2013 | FX Effect(2) | |||||||||||||||||||||||||||||||||||
Gross Billings(1): | ||||||||||||||||||||||||||||||||||||||||
North America | $ | 948,579 | $ | 788,721 | 20.3 | % | $ | (939 | ) | 20.4 | % | $ | 3,303,479 | $ | 2,847,244 | 16.0 | % | $ | (2,971 | ) | 16.1 | % | ||||||||||||||||||
EMEA | 560,541 | 565,713 | (0.9 | ) | (49,057 | ) | 7.8 | 2,046,807 | 1,983,599 | 3.2 | (7,462 | ) | 3.6 | |||||||||||||||||||||||||||
Rest of World | 574,848 | 238,673 | 140.9 | (32,203 | ) | 154.3 | 2,230,674 | 926,487 | 140.8 | (29,467 | ) | 143.9 | ||||||||||||||||||||||||||||
Consolidated gross billings | $ | 2,083,968 | $ | 1,593,107 | 30.8 | % | $ | (82,199 | ) | 36.0 | % | $ | 7,580,960 | $ | 5,757,330 | 31.7 | % | $ | (39,900 | ) | 32.4 | % | ||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||||
North America | $ | 550,974 | $ | 443,784 | 24.2 | % | $ | (257 | ) | 24.2 | % | $ | 1,824,461 | $ | 1,521,358 | 19.9 | % | $ | (862 | ) | 20.0 | % | ||||||||||||||||||
EMEA | 272,475 | 251,205 | 8.5 | (24,066 | ) | 18.0 | 961,130 | 742,915 | 29.4 | (4,374 | ) | 30.0 | ||||||||||||||||||||||||||||
Rest of World | 101,972 | 73,458 | 38.8 | (8,209 | ) | 50.0 | 406,097 | 309,382 | 31.3 | (20,838 | ) | 38.0 | ||||||||||||||||||||||||||||
Consolidated revenue | $ | 925,421 | $ | 768,447 | 20.4 | % | $ | (32,532 | ) | 24.7 | % | $ | 3,191,688 | $ | 2,573,655 | 24.0 | % | $ | (26,074 | ) | 25.0 | % | ||||||||||||||||||
Income (loss) from operations | $ | 18,394 | $ | 13,352 | 37.8 | % | $ | (828 | ) | 44.0 | % | $ | (14,842 | ) | $ | 75,754 | (119.6 | ) | % | $ | 1,389 | (121.4 | ) | % | ||||||||||||||||
Net income (loss) attributable to Groupon, Inc. | $ | 8,788 | $ | (81,247 | ) | $ | (73,090 | ) | $ | (95,393 | ) | |||||||||||||||||||||||||||||
Net income (loss) per share | ||||||||||||||||||||||||||||||||||||||||
Basic | $ | 0.01 | $ | (0.12 | ) | $ | (0.11 | ) | $ | (0.14 | ) | |||||||||||||||||||||||||||||
Diluted | $ | 0.01 | $ | (0.12 | ) | $ | (0.11 | ) | $ | (0.14 | ) | |||||||||||||||||||||||||||||
Weighted average number of shares outstanding | ||||||||||||||||||||||||||||||||||||||||
Basic | 671,885,967 | 668,046,073 | 674,832,393 | 663,910,194 | ||||||||||||||||||||||||||||||||||||
Diluted | 681,543,847 | 668,046,073 | 674,832,393 | 663,910,194 | ||||||||||||||||||||||||||||||||||||
(1) | Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds. |
(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 during the three months and year ended December 31, 2013. |
Groupon, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Operating activities | |||||||||||||||
Net income (loss) | $ | 11,384 | $ | (78,861 | ) | $ | (63,919 | ) | $ | (88,946 | ) | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization of property, equipment and software | 26,323 | 18,637 | 97,799 | 67,823 | |||||||||||
Amortization of acquired intangible assets | 11,054 | 5,495 | 47,122 | 21,626 | |||||||||||
Stock-based compensation | 32,061 | 32,239 | 122,019 | 121,462 | |||||||||||
Deferred income taxes | (9,150 | ) | (16,830 | ) | (11,106 | ) | (18,055 | ) | |||||||
Excess tax benefits on stock-based compensation | (3,407 | ) | (8,338 | ) | (15,980 | ) | (20,454 | ) | |||||||
(Income) loss on equity method investments | — | (14 | ) | 459 | 44 | ||||||||||
Net gain from changes in fair value of contingent consideration | (1,385 | ) | (895 | ) | (2,444 | ) | (3,171 | ) | |||||||
Impairments of investments | — | 85,925 | 2,036 | 85,925 | |||||||||||
Change in assets and liabilities, net of acquisitions: | |||||||||||||||
Restricted cash | (951 | ) | 2,264 | 6,010 | 2,183 | ||||||||||
Accounts receivable | 15,607 | 1,990 | (13,660 | ) | 10,989 | ||||||||||
Prepaid expenses and other current assets | 32,475 | (76,052 | ) | 78 | (62,906 | ) | |||||||||
Accounts payable | (2,947 | ) | (5,421 | ) | (11,911 | ) | (31,288 | ) | |||||||
Accrued merchant and supplier payables | 176,325 | 160,758 | 115,106 | 88,468 | |||||||||||
Accrued expenses and other current liabilities | 10,909 | 31,843 | (16,182 | ) | 4,053 | ||||||||||
Other, net | (11,476 | ) | 25,535 | 33,397 | 40,679 | ||||||||||
Net cash provided by operating activities | 286,822 | 178,275 | 288,824 | 218,432 | |||||||||||
Net cash used in investing activities | (35,889 | ) | (23,330 | ) | (229,456 | ) | (96,315 | ) | |||||||
Net cash used in financing activities | (21,088 | ) | (55,444 | ) | (194,156 | ) | (81,697 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | (13,100 | ) | 1,114 | (33,771 | ) | (9,237 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents | 216,745 | 100,615 | (168,559 | ) | 31,183 | ||||||||||
Cash and cash equivalents, beginning of period | 855,168 | 1,139,857 | 1,240,472 | 1,209,289 | |||||||||||
Cash and cash equivalents, end of period | $ | 1,071,913 | $ | 1,240,472 | $ | 1,071,913 | $ | 1,240,472 | |||||||
Groupon, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenue: | ||||||||||||||||
Third party and other | $ | 395,366 | $ | 401,688 | $ | 1,627,539 | $ | 1,654,654 | ||||||||
Direct | 530,055 | 366,759 | 1,564,149 | 919,001 | ||||||||||||
Total revenue | 925,421 | 768,447 | 3,191,688 | 2,573,655 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Third party and other | 59,659 | 52,538 | 241,885 | 232,062 | ||||||||||||
Direct | 472,303 | 337,701 | 1,400,617 | 840,060 | ||||||||||||
Total cost of revenue | 531,962 | 390,239 | 1,642,502 | 1,072,122 | ||||||||||||
Gross profit | 393,459 | 378,208 | 1,549,186 | 1,501,533 | ||||||||||||
Operating expenses: | ||||||||||||||||
Marketing | 65,909 | 56,505 | 269,043 | 214,824 | ||||||||||||
Selling, general and administrative | 309,965 | 306,086 | 1,293,716 | 1,210,966 | ||||||||||||
Acquisition-related (benefit) expense, net | (809 | ) | 2,265 | 1,269 | (11 | ) | ||||||||||
Total operating expenses | 375,065 | 364,856 | 1,564,028 | 1,425,779 | ||||||||||||
Income (loss) from operations | 18,394 | 13,352 | (14,842 | ) | 75,754 | |||||||||||
Other expense, net(1) | (11,467 | ) | (84,833 | ) | (33,353 | ) | (94,663 | ) | ||||||||
Income (loss) before provision for income taxes | 6,927 | (71,481 | ) | (48,195 | ) | (18,909 | ) | |||||||||
(Benefit) provision for income taxes | (4,457 | ) | 7,380 | 15,724 | 70,037 | |||||||||||
Net income (loss) | 11,384 | (78,861 | ) | (63,919 | ) | (88,946 | ) | |||||||||
Net income attributable to noncontrolling interests | (2,596 | ) | (2,386 | ) | (9,171 | ) | (6,447 | ) | ||||||||
Net income (loss) attributable to Groupon, Inc. | $ | 8,788 | $ | (81,247 | ) | $ | (73,090 | ) | $ | (95,393 | ) | |||||
Net income (loss) per share | ||||||||||||||||
Basic | $ | 0.01 | $ | (0.12 | ) | $ | (0.11 | ) | $ | (0.14 | ) | |||||
Diluted | $ | 0.01 | $ | (0.12 | ) | $ | (0.11 | ) | $ | (0.14 | ) | |||||
Weighted average number of shares outstanding | ||||||||||||||||
Basic | 671,885,967 | 668,046,073 | 674,832,393 | 663,910,194 | ||||||||||||
Diluted | 681,543,847 | 668,046,073 | 674,832,393 | 663,910,194 | ||||||||||||
(1) | Other expense, net includes foreign currency (losses) gains of $(11.4) million and $0.9 million for the three months ended December 31, 2014 and 2013, respectively, and $(31.5) million and $(10.3) million for the year ended December 31, 2014 and 2013, respectively. For the three months and year ended December 31, 2013, Other expense, net includes an $85.5 million impairment of the Company's minority investment in Life Media Limited ("F-tuan"), an entity with operations in China. |
Groupon, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
December 31, 2014 | December 31, 2013 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,071,913 | $ | 1,240,472 | ||||
Accounts receivable, net | 105,154 | 83,673 | ||||||
Deferred income taxes | 16,271 | 27,938 | ||||||
Prepaid expenses and other current assets | 207,991 | 210,415 | ||||||
Total current assets | 1,401,329 | 1,562,498 | ||||||
Property, equipment and software, net | 182,475 | 134,423 | ||||||
Goodwill | 447,810 | 220,827 | ||||||
Intangible assets, net | 110,557 | 28,443 | ||||||
Investments | 24,298 | 20,652 | ||||||
Deferred income taxes, non-current | 41,835 | 35,941 | ||||||
Other non-current assets | 19,293 | 39,226 | ||||||
Total Assets | $ | 2,227,597 | $ | 2,042,010 | ||||
Liabilities and Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 21,855 | $ | 27,573 | ||||
Accrued merchant and supplier payables | 910,567 | 752,943 | ||||||
Accrued expenses | 230,352 | 226,986 | ||||||
Deferred income taxes | 32,510 | 47,558 | ||||||
Other current liabilities | 130,312 | 132,718 | ||||||
Total current liabilities | 1,325,596 | 1,187,778 | ||||||
Deferred income taxes, non-current | 773 | 10,853 | ||||||
Other non-current liabilities | 136,284 | 131,697 | ||||||
Total Liabilities | 1,462,653 | 1,330,328 | ||||||
Commitments and contingencies | ||||||||
Stockholders' Equity | ||||||||
Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized, 699,008,084 shares issued and 671,768,980 shares outstanding at December 31, 2014 and 670,149,976 shares issued and 665,717,176 shares outstanding at December 31, 2013 | 70 | 67 | ||||||
Class B common stock, par value $0.0001 per share, 10,000,000 shares authorized, 2,399,976 shares issued and outstanding at December 31, 2014 and December 31, 2013 | — | — | ||||||
Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized, no shares issued and outstanding at December 31, 2014 and December 31, 2013 | — | — | ||||||
Additional paid-in capital | 1,847,420 | 1,584,211 | ||||||
Treasury stock, at cost, 27,239,104 shares at December 31, 2014 and 4,432,800 shares at December 31, 2013 | (198,467 | ) | (46,587 | ) | ||||
Accumulated deficit | (921,960 | ) | (848,870 | ) | ||||
Accumulated other comprehensive income | 35,763 | 24,830 | ||||||
Total Groupon, Inc. Stockholders' Equity | 762,826 | 713,651 | ||||||
Noncontrolling interests | 2,118 | (1,969 | ) | |||||
Total Equity | 764,944 | 711,682 | ||||||
Total Liabilities and Equity | $ | 2,227,597 | $ | 2,042,010 | ||||
Groupon, Inc.
Segment Information
(in thousands)
(unaudited)
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
North America | |||||||||||||||||
Gross billings (1) | $ | 948,579 | $ | 788,721 | $ | 3,303,479 | $ | 2,847,244 | |||||||||
Revenue | 550,974 | 443,784 | 1,824,461 | 1,521,358 | |||||||||||||
Segment cost of revenue and operating expenses (2) | 520,140 | 418,214 | 1,755,113 | 1,380,746 | |||||||||||||
Segment operating income (2) | $ | 30,834 | $ | 25,570 | $ | 69,348 | $ | 140,612 | |||||||||
Segment operating income as a percent of segment gross billings | 3.3 | % | 3.2 | % | 2.1 | % | 4.9 | % | |||||||||
Segment operating income as a percent of segment revenue | 5.6 | % | 5.8 | % | 3.8 | % | 9.2 | % | |||||||||
EMEA | |||||||||||||||||
Gross billings (1) | $ | 560,541 | $ | 565,713 | $ | 2,046,807 | $ | 1,983,599 | |||||||||
Revenue | 272,475 | 251,205 | 961,130 | 742,915 | |||||||||||||
Segment cost of revenue and operating expenses (2) | 237,468 | 214,187 | 857,062 | 631,409 | |||||||||||||
Segment operating income (2) | $ | 35,007 | $ | 37,018 | $ | 104,068 | $ | 111,506 | |||||||||
Segment operating income as a percent of segment gross billings | 6.2 | % | 6.5 | % | 5.1 | % | 5.6 | % | |||||||||
Segment operating income as a percent of segment revenue | 12.8 | % | 14.7 | % | 10.8 | % | 15.0 | % | |||||||||
Rest of World | |||||||||||||||||
Gross billings (1) | $ | 574,848 | $ | 238,673 | $ | 2,230,674 | $ | 926,487 | |||||||||
Revenue | 101,972 | 73,458 | 406,097 | 309,382 | |||||||||||||
Segment cost of revenue and operating expenses (2) | 118,167 | 88,190 | 471,067 | 364,295 | |||||||||||||
Segment operating loss (2) | $ | (16,195 | ) | $ | (14,732 | ) | $ | (64,970 | ) | $ | (54,913 | ) | |||||
Segment operating loss as a percent of segment gross billings | (2.8 | ) | % | (6.2 | ) | % | (2.9 | ) | % | (5.9 | ) | % | |||||
Segment operating loss as a percent of segment revenue | (15.9 | ) | % | (20.1 | ) | % | (16.0 | ) | % | (17.7 | ) | % | |||||
(1) | Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds. |
(2) | Segment cost of revenue and operating expenses and segment operating income (loss) exclude stock-based compensation and acquisition-related (benefit) expense, net. |
Groupon, Inc.
Non-GAAP Reconciliation Schedules
(in thousands, except share and per share amounts)
(unaudited)
Adjusted EBITDA and non-GAAP earnings per share are non-GAAP financial measures. The Company reconciles Adjusted EBITDA to the most comparable U.S. GAAP financial measure, "Net (loss) income," for the periods presented and the Company reconciles non-GAAP earnings per share to the most comparable U.S. GAAP financial 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 financial measure, "Net (loss) income."
Q4 2013 | Q1 2014 | Q2 2014 | Q3 2014 | Q4 2014 | ||||||||||||||||
Net (loss) income | $ | (78,861 | ) | $ | (35,363 | ) | $ | (20,922 | ) | $ | (19,018 | ) | $ | 11,384 | ||||||
Adjustments: | ||||||||||||||||||||
Stock-based compensation | 32,239 | 23,729 | 31,655 | 34,574 | 32,061 | |||||||||||||||
Acquisition-related expense (benefit), net | 2,265 | 1,785 | 597 | (304 | ) | (809 | ) | |||||||||||||
Depreciation and amortization | 24,132 | 34,740 | 34,658 | 38,146 | 37,377 | |||||||||||||||
Other expense, net | 84,833 | 840 | 1,023 | 20,023 | 11,467 | |||||||||||||||
Provision (benefit) for income taxes | 7,380 | 14,570 | 12,045 | (6,434 | ) | (4,457 | ) | |||||||||||||
Total adjustments | 150,849 | 75,664 | 79,978 | 86,005 | 75,639 | |||||||||||||||
Adjusted EBITDA | $ | 71,988 | $ | 40,301 | $ | 59,056 | $ | 66,987 | $ | 87,023 | ||||||||||
The following is a reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, "Net loss" for the years ended December 31, 2014 and 2013:
Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Net loss | $ | (63,919 | ) | $ | (88,946 | ) | ||
Adjustments: | ||||||||
Stock-based compensation | 122,019 | 121,462 | ||||||
Acquisition-related expense (benefit), net | 1,269 | (11 | ) | |||||
Depreciation and amortization | 144,921 | 89,449 | ||||||
Other expense, net | 33,353 | 94,663 | ||||||
Provision for income taxes | 15,724 | 70,037 | ||||||
Total adjustments | 317,286 | 375,600 | ||||||
Adjusted EBITDA | $ | 253,367 | $ | 286,654 | ||||
The following is a reconciliation of diluted net income (loss) per share to diluted non-GAAP earnings per share for the three months and year ended December 31, 2014:
Three Months Ended December 31, 2014 | Year Ended December 31, 2014 | |||||||
Net income (loss) attributable to common stockholders | $ | 8,788 | $ | (73,090 | ) | |||
Stock-based compensation | 32,061 | 122,019 | ||||||
Amortization of acquired intangible assets | 11,054 | 47,122 | ||||||
Acquisition-related (benefit) expense, net | (809 | ) | 1,269 | |||||
Income tax effect of adjustments | (13,503 | ) | (44,593 | ) | ||||
Net earnings attributable to common stockholders excluding stock-based compensation, amortization of acquired intangible assets and acquisition-related (benefit) expense, net | $ | 37,591 | $ | 52,727 | ||||
Diluted shares | 681,543,847 | 674,832,393 | ||||||
Incremental diluted shares | — | 10,152,694 | ||||||
Adjusted diluted shares | 681,543,847 | 684,985,087 | ||||||
Diluted net income (loss) per share | $ | 0.01 | $ | (0.11 | ) | |||
Impact of stock-based compensation, amortization of acquired intangible assets and acquisition-related (benefit) expense, net(1) | 0.05 | 0.19 | ||||||
Non-GAAP earnings per share(1) | $ | 0.06 | $ | 0.08 | ||||
(1) | The sum of per share amounts for quarterly periods may not equal year-to-date amounts due to rounding. |
Groupon, Inc.
Non-GAAP Reconciliation Schedules
(in thousands, except share and per share amounts)
(unaudited)
Foreign exchange rate neutral operating results are non-GAAP financial measures. The Company reconciles foreign exchange rate neutral operating results to the most comparable U.S. GAAP financial measures, "Gross billings," "Revenue" and "Income (loss) from operations," respectively, for the periods presented. The Company reconciles "foreign exchange rate neutral Gross billings growth" and "foreign exchange rate neutral Revenue growth" to year-over-year growth rates for the most comparable U.S. GAAP financial measures, "Gross billings growth" and "Revenue growth," respectively, for the periods presented. The Company reconciles foreign exchange rate neutral Gross billings growth excluding our Korean operations to year-over-year growth rates for the most comparable U.S. GAAP financial measure "Gross billings growth" for our Rest of World segment.
The effect on the Company's gross billings, revenue and income (loss) from operations from changes in exchange rates versus the U.S. Dollar for the three months ended December 31, 2014 was as follows:
Three Months Ended December 31, 2014 | Three Months Ended December 31, 2014 | |||||||||||||||||||||||
At Avg. Q4 2013 Rates(1) | Exchange Rate Effect(2) | As Reported | At Avg. Q3 2014 Rates(3) | Exchange Rate Effect(2) | As Reported | |||||||||||||||||||
Gross billings | $ | 2,166,167 | $ | (82,199 | ) | $ | 2,083,968 | $ | 2,157,789 | $ | (73,821 | ) | $ | 2,083,968 | ||||||||||
Revenue | 957,953 | (32,532 | ) | 925,421 | 949,475 | (24,054 | ) | 925,421 | ||||||||||||||||
Income (loss) from operations | $ | 19,222 | $ | (828 | ) | $ | 18,394 | $ | 18,696 | $ | (302 | ) | $ | 18,394 | ||||||||||
The effect on the Company's gross billings, revenue and (loss) income from operations from changes in exchange rates versus the U.S. Dollar for the year ended December 31, 2014 was as follows:
Year Ended December 31, 2014 | Year Ended December 31, 2014 | |||||||||||||||||||||||
At Avg. 2013 YTD Rates(1) | Exchange Rate Effect(2) | As Reported | At Avg. Q4'13 - Q3'14 Rates(3) | Exchange Rate Effect(2) | As Reported | |||||||||||||||||||
Gross billings | $ | 7,620,860 | $ | (39,900 | ) | $ | 7,580,960 | $ | 7,662,774 | $ | (81,814 | ) | $ | 7,580,960 | ||||||||||
Revenue | 3,217,762 | (26,074 | ) | 3,191,688 | 3,224,026 | (32,338 | ) | 3,191,688 | ||||||||||||||||
(Loss) income from operations | $ | (16,231 | ) | $ | 1,389 | $ | (14,842 | ) | $ | (14,358 | ) | $ | (484 | ) | $ | (14,842 | ) | |||||||
(1) | Represents the financial statement balances that would have resulted had average exchange rates in the reporting period been the same as those in effect during the three months and year ended December 31, 2013. |
(2) | Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable period. |
(3) | Represents the financial statement balances that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three and twelve months ended September 30, 2014. |
The following is a quarterly reconciliation of foreign exchange rate neutral Gross billings growth from the comparable quarterly periods of the prior year to reported Gross billings growth from the comparable quarterly periods of the prior year.
Q4 2013 | Q1 2014 | Q2 2014 | Q3 2014 | Q4 2014 | ||||||||||||
EMEA Gross billings growth, excluding FX | 3 | % | 1 | % | (4 | ) | % | 10 | % | 8 | % | |||||
FX Effect | 3 | 3 | 4 | — | (9 | ) | ||||||||||
EMEA Gross billings growth | 6 | % | 4 | % | — | % | 10 | % | (1 | ) | % | |||||
Rest of World Gross billings growth, excluding FX | (2 | ) | % | 133 | % | 141 | % | 147 | % | 154 | % | |||||
FX Effect | (9 | ) | (10 | ) | 4 | 8 | (13 | ) | ||||||||
Rest of World Gross billings growth | (11 | ) | % | 123 | % | 145 | % | 155 | % | 141 | % | |||||
Consolidated Gross billings growth, excluding FX | 5 | % | 30 | % | 27 | % | 37 | % | 36 | % | ||||||
FX Effect | — | (1 | ) | 2 | 2 | (5 | ) | |||||||||
Consolidated Gross billings growth | 5 | % | 29 | % | 29 | % | 39 | % | 31 | % | ||||||
The following is a reconciliation of Rest of World foreign exchange rate neutral Gross billings growth, excluding the impact of Ticket Monster and Groupon's legacy Korean operations, from the comparable quarterly period of the prior year to reported Rest of World Gross billings growth from the comparable quarterly period of the prior year.
Q4 2014 | ||||
Rest of World Gross billings growth, excluding Korean operations and FX | 6 | % | ||
Korean operations impact on Gross billings growth | 148 | |||
Rest of World Gross billings growth, excluding FX | 154 | % | ||
FX Effect | (13 | ) | ||
Rest of World Gross billings growth | 141 | % | ||
The following is a reconciliation of Ticket Monster foreign exchange rate neutral Gross billings growth from the comparable period of the prior year to Gross billings growth from the comparable period of the prior year.
Three Months Ended December 31, 2014(1) | Year Ended December 31, 2014(1) | ||||||
Ticket Monster Gross billings growth, excluding FX | 38 | % | 47 | % | |||
FX Effect | (4 | ) | 5 | ||||
Ticket Monster Gross billings growth | 34 | % | 52 | % | |||
(1) | The 2013 results of Ticket Monster used to measure Gross billings growth reflect the quarterly and full year periods prior to Groupon's acquisition of that business on January 2, 2014. |
The following is a quarterly reconciliation of foreign exchange rate neutral Revenue growth from the comparable quarterly periods of the prior year to reported Revenue growth from the comparable quarterly periods of the prior year.
Q4 2013 | Q1 2014 | Q2 2014 | Q3 2014 | Q4 2014 | ||||||||||||
EMEA Revenue growth, excluding FX | 38 | % | 22 | % | 36 | % | 55 | % | 18 | % | ||||||
FX Effect | 5 | 4 | 6 | 1 | (10 | ) | ||||||||||
EMEA Revenue growth | 43 | % | 26 | % | 42 | % | 56 | % | 8 | % | ||||||
Rest of World Revenue growth, excluding FX | (6 | ) | % | 35 | % | 44 | % | 26 | % | 50 | % | |||||
FX Effect | (9 | ) | (12 | ) | (4 | ) | — | (11 | ) | |||||||
Rest of World Revenue growth | (15 | ) | % | 23 | % | 40 | % | 26 | % | 39 | % | |||||
Consolidated Revenue growth, excluding FX | 20 | % | 26 | % | 22 | % | 27 | % | 25 | % | ||||||
FX Effect | — | — | 2 | — | (5 | ) | ||||||||||
Consolidated Revenue growth | 20 | % | 26 | % | 24 | % | 27 | % | 20 | % | ||||||
Groupon, Inc.
Supplemental Financial Information and Business Metrics (11)
(financial data in thousands; active customers in millions)
(unaudited)
Q4 2013 | Q1 2014 | Q2 2014 | Q3 2014 | Q4 2014 | |||||||||||||||||
Segments | |||||||||||||||||||||
North America Segment: | |||||||||||||||||||||
Gross Billings (1): | |||||||||||||||||||||
Local(2) Gross Billings | $ | 439,131 | $ | 456,952 | $ | 461,366 | $ | 446,573 | $ | 499,250 | |||||||||||
Goods Gross Billings | 286,039 | 242,896 | 247,618 | 242,893 | 369,033 | ||||||||||||||||
Travel(2) Gross Billings | 63,551 | 81,921 | 89,861 | 84,820 | 80,296 | ||||||||||||||||
Total Gross Billings | $ | 788,721 | $ | 781,769 | $ | 798,845 | $ | 774,286 | $ | 948,579 | |||||||||||
Year-over-year growth | 10 | % | 15 | % | 12 | % | 16 | % | 20 | % | |||||||||||
% Third Party and Other | 67 | % | 70 | % | 70 | % | 69 | % | 62 | % | |||||||||||
% Direct | 33 | % | 30 | % | 30 | % | 31 | % | 38 | % | |||||||||||
Gross Billings Trailing Twelve Months (TTM) | $ | 2,847,244 | $ | 2,947,694 | $ | 3,034,334 | $ | 3,143,621 | $ | 3,303,479 | |||||||||||
Revenue (3): | |||||||||||||||||||||
Local Revenue | $ | 161,601 | $ | 177,247 | $ | 164,500 | $ | 161,912 | $ | 170,946 | |||||||||||
Goods Revenue | 268,281 | 237,435 | 241,626 | 238,955 | 362,863 | ||||||||||||||||
Travel Revenue | 13,902 | 16,380 | 17,805 | 17,627 | 17,165 | ||||||||||||||||
Total Revenue | $ | 443,784 | $ | 431,062 | $ | 423,931 | $ | 418,494 | $ | 550,974 | |||||||||||
Year-over-year growth | 18 | % | 27 | % | 12 | % | 16 | % | 24 | % | |||||||||||
% Third Party and Other | 41 | % | 45 | % | 43 | % | 43 | % | 35 | % | |||||||||||
% Direct | 59 | % | 55 | % | 57 | % | 57 | % | 65 | % | |||||||||||
Revenue TTM | $ | 1,521,358 | $ | 1,612,866 | $ | 1,659,615 | $ | 1,717,271 | $ | 1,824,461 | |||||||||||
Gross Profit (4): | |||||||||||||||||||||
Local Gross Profit | $ | 140,944 | $ | 152,622 | $ | 142,674 | $ | 138,189 | $ | 147,582 | |||||||||||
% of North America Local Gross Billings | 32.1 | % | 33.4 | % | 30.9 | % | 30.9 | % | 29.6 | % | |||||||||||
Goods Gross Profit | 21,030 | 12,604 | 22,961 | 23,953 | 34,404 | ||||||||||||||||
% of North America Goods Gross Billings | 7.4 | % | 5.2 | % | 9.3 | % | 9.9 | % | 9.3 | % | |||||||||||
Travel Gross Profit | 12,352 | 14,442 | 14,365 | 14,000 | 14,187 | ||||||||||||||||
% of North America Travel Gross Billings | 19.4 | % | 17.6 | % | 16.0 | % | 16.5 | % | 17.7 | % | |||||||||||
Total Gross Profit | $ | 174,326 | $ | 179,668 | $ | 180,000 | $ | 176,142 | $ | 196,173 | |||||||||||
Year-over-year growth | 15 | % | 4 | % | (7 | ) | % | 3 | % | 13 | % | ||||||||||
% Third Party and Other | 91 | % | 94 | % | 88 | % | 87 | % | 83 | % | |||||||||||
% Direct | 9 | % | 6 | % | 12 | % | 13 | % | 17 | % | |||||||||||
% of North America Total Gross Billings | 22.1 | % | 23.0 | % | 22.5 | % | 22.7 | % | 20.7 | % | |||||||||||
EMEA Segment: | |||||||||||||||||||||
Gross Billings: | |||||||||||||||||||||
Local Gross Billings | $ | 277,472 | $ | 262,141 | $ | 227,266 | $ | 218,615 | $ | 242,119 | |||||||||||
Goods Gross Billings | 219,880 | 183,013 | 190,957 | 191,006 | 245,712 | ||||||||||||||||
Travel Gross Billings | 68,361 | 68,434 | 65,032 | 79,802 | 72,710 | ||||||||||||||||
Total Gross Billings | $ | 565,713 | $ | 513,588 | $ | 483,255 | $ | 489,423 | $ | 560,541 | |||||||||||
Year-over-year growth | 6 | % | 4 | % | — | % | 10 | % | (1 | ) | % | ||||||||||
Year-over-year growth, excluding FX (5) | 3 | % | 1 | % | (4 | ) | % | 10 | % | 8 | % | ||||||||||
% Third Party and Other | 83 | % | 83 | % | 80 | % | 78 | % | 74 | % | |||||||||||
% Direct | 17 | % | 17 | % | 20 | % | 22 | % | 26 | % | |||||||||||
Gross Billings TTM | $ | 1,983,599 | $ | 2,004,869 | $ | 2,005,874 | $ | 2,051,979 | $ | 2,046,807 | |||||||||||
Revenue: | |||||||||||||||||||||
Local Revenue | $ | 116,061 | $ | 109,120 | $ | 96,485 | $ | 90,002 | $ | 95,572 | |||||||||||
Goods Revenue | 119,274 | 106,889 | 115,413 | 123,110 | 160,582 | ||||||||||||||||
Travel Revenue | 15,870 | 14,884 | 15,792 | 16,960 | 16,321 | ||||||||||||||||
Total Revenue | $ | 251,205 | $ | 230,893 | $ | 227,690 | $ | 230,072 | $ | 272,475 | |||||||||||
Year-over-year growth | 43 | % | 26 | % | 42 | % | 56 | % | 8 | % | |||||||||||
Year-over-year growth, excluding FX | 38 | % | 22 | % | 36 | % | 55 | % | 18 | % | |||||||||||
% Third Party and Other | 61 | % | 61 | % | 57 | % | 53 | % | 46 | % | |||||||||||
% Direct | 39 | % | 39 | % | 43 | % | 47 | % | 54 | % | |||||||||||
Revenue TTM | $ | 742,915 | $ | 790,010 | $ | 857,738 | $ | 939,860 | $ | 961,130 | |||||||||||
Q4 2013 | Q1 2014 | Q2 2014 | Q3 2014 | Q4 2014 | |||||||||||||||||
Gross Profit: | |||||||||||||||||||||
Local Gross Profit | $ | 105,210 | $ | 100,066 | $ | 90,373 | $ | 83,956 | $ | 90,150 | |||||||||||
% of EMEA Local Gross Billings | 37.9 | % | 38.2 | % | 39.8 | % | 38.4 | % | 37.2 | % | |||||||||||
Goods Gross Profit | 33,526 | 27,302 | 35,432 | 32,252 | 38,154 | ||||||||||||||||
% of EMEA Goods Gross Billings | 15.2 | % | 14.9 | % | 18.6 | % | 16.9 | % | 15.5 | % | |||||||||||
Travel Gross Profit | 14,457 | 13,669 | 14,894 | 15,440 | 15,226 | ||||||||||||||||
% of EMEA Travel Gross Billings | 21.1 | % | 20.0 | % | 22.9 | % | 19.3 | % | 20.9 | % | |||||||||||
Total Gross Profit | $ | 153,193 | $ | 141,037 | $ | 140,699 | $ | 131,648 | $ | 143,530 | |||||||||||
Year-over-year growth | 7 | % | (8 | ) | % | 1 | % | 6 | % | (6 | ) | % | |||||||||
% Third Party and Other | 91 | % | 92 | % | 85 | % | 85 | % | 82 | % | |||||||||||
% Direct | 9 | % | 8 | % | 15 | % | 15 | % | 18 | % | |||||||||||
% of EMEA Total Gross Billings | 27.1 | % | 27.5 | % | 29.1 | % | 26.9 | % | 25.6 | % | |||||||||||
Rest of World Segment: | |||||||||||||||||||||
Gross Billings: | |||||||||||||||||||||
Local Gross Billings | $ | 116,824 | $ | 167,833 | $ | 170,237 | $ | 190,254 | $ | 161,236 | |||||||||||
Goods Gross Billings | 89,451 | 283,091 | 281,300 | 289,210 | 336,355 | ||||||||||||||||
Travel Gross Billings | 32,398 | 70,930 | 85,409 | 117,562 | 77,257 | ||||||||||||||||
Total Gross Billings | $ | 238,673 | $ | 521,854 | $ | 536,946 | $ | 597,026 | $ | 574,848 | |||||||||||
Year-over-year growth | (11 | ) | % | 123 | % | 145 | % | 155 | % | 141 | % | ||||||||||
Year-over-year growth, excluding FX | (2 | ) | % | 133 | % | 141 | % | 147 | % | 154 | % | ||||||||||
% Third Party and Other | 97 | % | 99 | % | 99 | % | 98 | % | 96 | % | |||||||||||
% Direct | 3 | % | 1 | % | 1 | % | 2 | % | 4 | % | |||||||||||
Gross Billings TTM | $ | 926,487 | $ | 1,214,209 | $ | 1,531,804 | $ | 1,894,499 | $ | 2,230,674 | |||||||||||
Revenue: | |||||||||||||||||||||
Local Revenue | $ | 40,847 | $ | 43,814 | $ | 42,711 | $ | 45,085 | $ | 35,942 | |||||||||||
Goods Revenue | 26,158 | 41,855 | 45,537 | 48,889 | 57,595 | ||||||||||||||||
Travel Revenue | 6,453 | 10,013 | 11,707 | 14,514 | 8,435 | ||||||||||||||||
Total Revenue | $ | 73,458 | $ | 95,682 | $ | 99,955 | $ | 108,488 | $ | 101,972 | |||||||||||
Year-over-year growth | (15 | ) | % | 23 | % | 40 | % | 26 | % | 39 | % | ||||||||||
Year-over-year growth, excluding FX | (6 | ) | % | 35 | % | 44 | % | 26 | % | 50 | % | ||||||||||
% Third Party and Other | 90 | % | 94 | % | 93 | % | 90 | % | 77 | % | |||||||||||
% Direct | 10 | % | 6 | % | 7 | % | 10 | % | 23 | % | |||||||||||
Revenue TTM | $ | 309,382 | $ | 327,014 | $ | 355,366 | $ | 377,583 | $ | 406,097 | |||||||||||
Gross Profit: | |||||||||||||||||||||
Local Gross Profit | $ | 33,596 | $ | 34,748 | $ | 35,618 | $ | 38,592 | $ | 29,569 | |||||||||||
% of Rest of World Local Gross Billings | 28.8 | % | 20.7 | % | 20.9 | % | 20.3 | % | 18.3 | % | |||||||||||
Goods Gross Profit | 11,781 | 22,135 | 24,623 | 22,877 | 18,867 | ||||||||||||||||
% of Rest of World Goods Gross Billings | 13.2 | % | 7.8 | % | 8.8 | % | 7.9 | % | 5.6 | % | |||||||||||
Travel Gross Profit | 5,312 | 8,133 | 8,922 | 10,885 | 5,320 | ||||||||||||||||
% of Rest of World Travel Gross Billings | 16.4 | % | 11.5 | % | 10.4 | % | 9.3 | % | 6.9 | % | |||||||||||
Total Gross Profit | $ | 50,689 | $ | 65,016 | $ | 69,163 | $ | 72,354 | $ | 53,756 | |||||||||||
Year-over-year growth | (16 | ) | % | 23 | % | 37 | % | 12 | % | 6 | % | ||||||||||
% Third Party and Other | 101 | % | 102 | % | 100 | % | 102 | % | 101 | % | |||||||||||
% Direct | (1 | ) | % | (2 | ) | % | — | % | (2 | ) | % | (1 | ) | % | |||||||
% of Rest of World Total Gross Billings | 21.2 | % | 12.5 | % | 12.9 | % | 12.1 | % | 9.4 | % | |||||||||||
Consolidated Results of Operations: | |||||||||||||||||||||
Gross Billings: | |||||||||||||||||||||
Local Gross Billings | $ | 833,427 | $ | 886,926 | $ | 858,869 | $ | 855,442 | $ | 902,605 | |||||||||||
Goods Gross Billings | 595,370 | 709,000 | 719,875 | 723,109 | 951,100 | ||||||||||||||||
Travel Gross Billings | 164,310 | 221,285 | 240,302 | 282,184 | 230,263 | ||||||||||||||||
Total Gross Billings | $ | 1,593,107 | $ | 1,817,211 | $ | 1,819,046 | $ | 1,860,735 | $ | 2,083,968 | |||||||||||
Year-over-year growth | 5 | % | 29 | % | 29 | % | 39 | % | 31 | % | |||||||||||
Year-over-year growth, excluding FX | 5 | % | 30 | % | 27 | % | 37 | % | 36 | % | |||||||||||
% Third Party and Other | 77 | % | 82 | % | 81 | % | 81 | % | 75 | % | |||||||||||
% Direct | 23 | % | 18 | % | 19 | % | 19 | % | 25 | % | |||||||||||
Gross Billings TTM | $ | 5,757,330 | $ | 6,166,772 | $ | 6,572,012 | $ | 7,090,099 | $ | 7,580,960 | |||||||||||
Year-over-year growth | 7 | % | 14 | % | 18 | % | 25 | % | 32 | % | |||||||||||
Q4 2013 | Q1 2014 | Q2 2014 | Q3 2014 | Q4 2014 | |||||||||||||||||
Revenue: | |||||||||||||||||||||
Local Revenue | $ | 318,509 | $ | 330,181 | $ | 303,696 | $ | 296,999 | $ | 302,460 | |||||||||||
Goods Revenue | 413,713 | 386,179 | 402,576 | 410,954 | 581,040 | ||||||||||||||||
Travel Revenue | 36,225 | 41,277 | 45,304 | 49,101 | 41,921 | ||||||||||||||||
Total Revenue | $ | 768,447 | $ | 757,637 | $ | 751,576 | $ | 757,054 | $ | 925,421 | |||||||||||
Year-over-year growth | 20 | % | 26 | % | 23 | % | 27 | % | 20 | % | |||||||||||
Year-over-year growth, excluding FX | 20 | % | 26 | % | 22 | % | 27 | % | 25 | % | |||||||||||
% Third Party and Other | 52 | % | 56 | % | 54 | % | 53 | % | 43 | % | |||||||||||
% Direct | 48 | % | 44 | % | 46 | % | 47 | % | 57 | % | |||||||||||
Revenue TTM | $ | 2,573,655 | $ | 2,729,890 | $ | 2,872,719 | $ | 3,034,714 | $ | 3,191,688 | |||||||||||
Year-over-year growth | 10 | % | 15 | % | 19 | % | 24 | % | 24 | % | |||||||||||
Gross Profit: | |||||||||||||||||||||
Local Gross Profit | $ | 279,750 | $ | 287,436 | $ | 268,665 | $ | 260,737 | $ | 267,301 | |||||||||||
% of Consolidated Local Gross Billings | 33.6 | % | 32.4 | % | 31.3 | % | 30.5 | % | 29.6 | % | |||||||||||
Goods Gross Profit | 66,337 | 62,041 | 83,016 | 79,082 | 91,425 | ||||||||||||||||
% of Consolidated Goods Gross Billings | 11.1 | % | 8.8 | % | 11.5 | % | 10.9 | % | 9.6 | % | |||||||||||
Travel Gross Profit | 32,121 | 36,244 | 38,181 | 40,325 | 34,733 | ||||||||||||||||
% of Consolidated Travel Gross Billings | 19.5 | % | 16.4 | % | 15.9 | % | 14.3 | % | 15.1 | % | |||||||||||
Total Gross Profit | $ | 378,208 | $ | 385,721 | $ | 389,862 | $ | 380,144 | $ | 393,459 | |||||||||||
Year-over-year growth | 6 | % | 2 | % | 1 | % | 6 | % | 4 | % | |||||||||||
% Third Party and Other | 92 | % | 94 | % | 89 | % | 89 | % | 85 | % | |||||||||||
% Direct | 8 | % | 6 | % | 11 | % | 11 | % | 15 | % | |||||||||||
% of Total Consolidated Gross Billings | 23.7 | % | 21.2 | % | 21.4 | % | 20.4 | % | 18.9 | % | |||||||||||
Adjusted EBITDA | $ | 71,988 | $ | 40,301 | $ | 59,056 | $ | 66,987 | $ | 87,023 | |||||||||||
% of Total Consolidated Gross Billings | 4.5 | % | 2.2 | % | 3.2 | % | 3.6 | % | 4.2 | % | |||||||||||
% of Total Consolidated Revenue | 9.4 | % | 5.3 | % | 7.9 | % | 8.8 | % | 9.4 | % | |||||||||||
Groupon, Inc.
Supplemental Financial Information and Business Metrics (11)
(financial data in thousands; active customers in millions)
(unaudited)
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."
Q4 2013 | Q1 2014 | Q2 2014 | Q3 2014 | Q4 2014 | ||||||||||||||||
Net cash provided by (used in) operating activities | $ | 178,275 | $ | (20,717 | ) | $ | (22,747 | ) | $ | 45,466 | $ | 286,822 | ||||||||
Purchases of property and equipment and capitalized software | (19,931 | ) | (16,355 | ) | (31,053 | ) | (20,053 | ) | (20,831 | ) | ||||||||||
Free cash flow | $ | 158,344 | $ | (37,072 | ) | $ | (53,800 | ) | $ | 25,413 | $ | 265,991 | ||||||||
Net cash provided by operating activities (TTM) | $ | 218,432 | $ | 188,955 | $ | 122,906 | $ | 180,277 | $ | 288,824 | ||||||||||
Purchases of property and equipment and capitalized software (TTM) | (63,505 | ) | (65,392 | ) | (82,403 | ) | (87,392 | ) | (88,292 | ) | ||||||||||
Free cash flow (TTM) | $ | 154,927 | $ | 123,563 | $ | 40,503 | $ | 92,885 | $ | 200,532 | ||||||||||
Net cash used in investing activities | $ | (23,330 | ) | $ | (138,608 | ) | $ | (34,498 | ) | $ | (20,461 | ) | $ | (35,889 | ) | |||||
Net cash used in financing activities | $ | (55,444 | ) | $ | (41,492 | ) | $ | (114,753 | ) | $ | (16,823 | ) | $ | (21,088 | ) | |||||
Net cash used in investing activities (TTM) | $ | (96,315 | ) | $ | (204,244 | ) | $ | (222,880 | ) | $ | (216,897 | ) | $ | (229,456 | ) | |||||
Net cash used in financing activities (TTM) | $ | (81,697 | ) | $ | (113,847 | ) | $ | (220,659 | ) | $ | (228,512 | ) | $ | (194,156 | ) | |||||
Other Metrics: | ||||||||||||||||||||
Active Customers (6) | ||||||||||||||||||||
North America | 20.8 | 21.8 | 22.6 | 23.5 | 24.1 | |||||||||||||||
EMEA | 14.2 | 14.5 | 14.5 | 14.9 | 15.2 | |||||||||||||||
Rest of World(7) | 8.7 | 14.1 | 14.5 | 14.3 | 14.6 | |||||||||||||||
Total Active Customers(8) | 43.7 | 50.4 | 51.6 | 52.7 | 53.9 | |||||||||||||||
TTM Gross Billings / Average Active Customer (9) | ||||||||||||||||||||
North America | $ | 150 | $ | 147 | $ | 145 | $ | 145 | $ | 147 | ||||||||||
EMEA | $ | 139 | $ | 141 | $ | 141 | $ | 142 | $ | 139 | ||||||||||
Rest of World(7) | $ | 104 | $ | 106 | $ | 132 | $ | 165 | $ | 191 | ||||||||||
Consolidated(8) | $ | 137 | $ | 135 | $ | 141 | $ | 149 | $ | 155 | ||||||||||
Global headcount as of December 31, 2014 was as follows:
Q4 2014 | |
Sales (10) | 4,984 |
% North America | 27% |
% EMEA | 38% |
% Rest of World | 35% |
Other | 6,859 |
Total Headcount | 11,843 |
(1) | Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds. |
(2) | Local represents deals from local merchants, deals with national merchants, and deals through local events. Other revenue transactions, which include advertising, payment processing, point of sale and commission revenue, were previously aggregated with our Travel category. During the three months ended March 31, 2014, the Company updated its presentation of category information to include gross billings, revenue and gross profit from those other revenue sources within the Local category, and prior period category information has been retrospectively adjusted to conform to the current period presentation. |
(3) | Includes third party revenue, direct revenue and other revenue. Third party revenue is related to sales for which the Company acts as a marketing agent for the merchant. This revenue is recorded on a net basis. Direct revenue is primarily related to the sale of products for which the Company is the merchant of record. These revenues are accounted for on a gross basis, with the cost of inventory included in cost of revenue. Other revenue primarily consists of advertising revenue, payment processing revenue, point of sale revenue and commission revenue. |
(4) | Represents third party revenue, direct revenue and other revenue reduced by cost of revenue. Cost of revenue is comprised of direct and certain indirect costs incurred to generate revenue. Third party cost of revenue includes estimated refunds for which the merchant's share is not recoverable. Direct cost of revenue includes the cost of inventory, shipping and fulfillment costs and inventory markdowns. Other costs incurred to generate revenue are allocated to cost of third party and other revenue and direct revenue for each of our categories (Local, Goods, and Travel) in proportion to gross billings during the period. |
(5) | 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 period. |
(6) | Reflects the total number of unique user accounts who have purchased a voucher or product from us during the trailing twelve months. |
(7) | Active customers in our Rest of World segment as of December 31, 2013, March 31, 2014 and June 30, 2014 have been reduced by 1.2 million, 1.4 million and 1.6 million, respectively, from the amounts previously reported to correct that operational information. Those adjustments increased TTM gross billings |
per average active customer in our Rest of World segment for the 12-month periods ended December 31, 2013, March 31, 2014 and June 30, 2014 by $9, $9 and $13, respectively, from the amounts previously reported.
(8) | The adjustments of active customers in our Rest of World segment as of December 31, 2013, March 31, 2014 and June 30, 2014, described in footnote (7) above, reduced consolidated active customers by the same amounts. Those adjustments increased consolidated TTM gross billings per average active customer for the 12-month periods ended December 31, 2013, March 31, 2014 and June 30, 2014 by $3, $3 and $4, respectively, from the amounts previously reported. |
(9) | Reflects the total gross billings generated in the trailing twelve months per average active customer over that period. |
(10) | Includes merchant sales representatives, as well as sales support. |
(11) | The definition, methodology and appropriateness of each of our supplemental metrics is reviewed periodically. As a result, metrics are subject to removal and/or change. |