0001490281-14-000036.txt : 20140506 0001490281-14-000036.hdr.sgml : 20140506 20140506160102 ACCESSION NUMBER: 0001490281-14-000036 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20140506 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20140506 DATE AS OF CHANGE: 20140506 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Groupon, Inc. CENTRAL INDEX KEY: 0001490281 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ADVERTISING AGENCIES [7311] IRS NUMBER: 270903295 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-35335 FILM NUMBER: 14816966 BUSINESS ADDRESS: STREET 1: 600 WEST CHICAGO AVENUE, SUITE 830 CITY: CHICAGO STATE: IL ZIP: 60610 BUSINESS PHONE: (312) 604-5515 MAIL ADDRESS: STREET 1: 600 WEST CHICAGO AVENUE, SUITE 830 CITY: CHICAGO STATE: IL ZIP: 60610 8-K 1 a2014q18-k.htm 8-K 2014 Q1 8-K


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 6, 2014
 
GROUPON, INC.
(Exact name of registrant as specified in its charter)
 
 
 
 
 
 
 
Delaware
(State or other
jurisdiction
of incorporation)
 
001-35335
(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 6, 2014, the Company issued a press release announcing its financial results for its fiscal quarter ended March 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 May 6, 2014.

*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: May 6, 2014
By:
/s/ Jason E. Child
 
Name:
Jason E. Child
 
Title:
Chief Financial Officer







Exhibit Index

Exhibit No.
 
Description
 
 
 
99.1*
 
Earnings Press Release dated May 6, 2014.

*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.



 EX-99.1 2 exhibit991-q12014.htm EXHIBIT 99.1 Exhibit 99.1 - Q1 2014



Exhibit 99.1

Groupon Announces First Quarter 2014 Results
 
•
Gross billings of $1.82 billion
•
Revenue of $757.6 million
•
Adjusted EBITDA of $40.3 million
•
GAAP loss per share of $0.06; non-GAAP loss per share of $0.01
 
Groupon, Inc. (NASDAQ: GRPN) today announced financial results for the quarter ended March 31, 2014.
 
"We had a record quarter in terms of demand, with worldwide billings increasing 29% and reaching their highest level ever," said Eric Lefkofsky, CEO of Groupon.  "Our marketplace continued to gain traction and growth in our mobile business accelerated, with more than 10 million app downloads this quarter and mobile transactions reaching 54% in March."

"We're on track with our plans in 2014 to invest in the growth of Local, improve our Goods margins, and drive profitability in our International operations. As a result, we have further confidence in our results for the back half of the year, and have increased our full year outlook."
 
First Quarter 2014 Summary
 
•
Gross billings, which reflect the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds, increased 29% globally to $1.82 billion in the first quarter 2014, compared with $1.41 billion in the first quarter 2013. North America billings increased 15%, EMEA increased 4% and Rest of World increased 123%, driven by the acquisition of Ticket Monster.

•
Revenue increased 26%, to $757.6 million in the first quarter 2014, compared with $601.4 million in the first quarter 2013. North America revenue increased 27%, EMEA increased 26% and Rest of World increased 23%.

•
Gross profit increased 2%, to $385.7 million in the first quarter 2014, compared with $379.0 million in the first quarter 2013.

•
Adjusted EBITDA, a non-GAAP financial measure, was $40.3 million in the first quarter 2014, compared with $71.9 million in the first quarter 2013, reflecting a $29.4 million increase in marketing expense.

•
First quarter 2014 net loss attributable to common stockholders was $37.8 million, or $0.06 per share, including stock compensation, amortization of acquired intangible assets, and acquisition-related costs, net, of $38.2 million ($29.8 million net of tax). Loss per share excluding stock compensation, amortization of acquired intangible assets, and acquisition-related costs, net of tax, a non-GAAP financial measure, was $0.01 per share.

•
Operating cash flow for the trailing twelve months ended March 31, 2014 was $189.0 million. Free cash flow, a non-GAAP financial measure, was negative $37.1 million in the first quarter 2014, bringing free cash flow for the trailing twelve months ended March 31, 2014 to $123.6 million.





•
At the end of the quarter, Groupon had $1.0 billion in cash and cash equivalents.
 
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, increased 85% year-over-year to 84 million in the first quarter 2014. North America units increased 14%, EMEA units increased 18% and Rest of World units increased 330%.
•
Active deals: At the end of the first quarter 2014, on average, active deals were over 200,000 globally, compared with more than 140,000 at the end of the fourth quarter 2013. North American active deals increased to over 95,000.
•
Active customers: Active customers, or customers that have purchased a voucher or product within the last twelve months, grew 24% year-over-year, to 51.8 million as of March 31, 2014, comprising 21.8 million in North America, 14.5 million in EMEA, and 15.5 million in Rest of World.
•
Customer spend: First quarter 2014 trailing twelve month billings per average active customer was $132, compared with $134 in the fourth quarter 2013.
•
Mobile: In March 2014, 54% of global transactions were completed on mobile devices. Over 80 million people have now downloaded Groupon mobile apps worldwide, with over 10 million people downloading them in the first quarter alone.
•
Marketplace: The rollout of Groupon’s marketplace ("Pull") continued to gain traction. In March 2014, approximately 9% of total traffic in North America searched, with customers that searched spending significantly more than those that did not.    
 
Share Repurchase Program
During the first quarter 2014, Groupon repurchased 3,075,700 shares of its Class A common stock under its share repurchase authorization at an average price of $9.58 per share, for an aggregate purchase price of $29.5 million. Under the existing authorization, Groupon has repurchased a total of 7,508,500 shares at an average price of $10.13 per share, for an aggregate purchase price of $76.0 million. Groupon is authorized to repurchase up to an additional $224.0 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
In the second quarter 2014, Groupon expects continued investment to accelerate long-term growth worldwide. As a result, for the second quarter 2014, the Company expects revenue of between $725 million and $775 million, Adjusted EBITDA of between $45 million and $65 million, and non-GAAP earnings per share excluding stock compensation, amortization of acquired intangible assets, and acquisition-related expenses, net of tax, of between $0.00 and $0.02.
 
Groupon is increasing its full year outlook, and now expects Adjusted EBITDA to exceed $300 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 loss per share excluding stock-based compensation, amortization of acquired intangible assets, and acquisition-related expense (benefit), net. 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, beginning in the fourth quarter of 2013, also includes external transaction costs related to business combinations, primarily consisting of legal and advisory fees. External transaction costs were not material for periods prior to the fourth quarter of 2013 presented in this release and the accompanying tables. 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.
Earnings per share excluding stock-based compensation, amortization of acquired intangible assets, and acquisition-related expense (benefit), net is a non-GAAP financial measure that 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.
Beginning in the first quarter 2014, we have changed our non-GAAP earnings (loss) per share measure to exclude amortization of acquired intangible assets, net of tax, in addition to stock compensation and acquisition-related expenses, which we have excluded historically. Given the significant acquisition activity in January 2014 and potential acquisition activity in the future, we believe that excluding non-cash amortization of acquired intangible assets from our non-GAAP earnings per share measure enables 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; responding to changes in the market; effectively dealing with challenges arising from our international operations; retaining existing customers and adding new customers; retaining and adding high quality merchants; cyber security breaches; incurring expenses as we expand our business; competing against smaller competitors and competitors with more financial resources than us; maintaining favorable terms with our business partners; maintaining a strong brand; managing inventory and order fulfillment risks; integrating our technology platforms; managing refund risks; retaining our executive team; litigation; regulations, including the CARD Act and regulation of the Internet; 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; compliance with rules and regulations associated with being a public company; 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 May 6, 2014. 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 five-star 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
Paul Taaffe
312-999-3098
312-999-3964
ir@groupon.com
 





Groupon, Inc.
Summary Consolidated and Segment Results
(in thousands, except share and per share amounts)
(unaudited)

 
 
Three Months Ended March 31,
 
Y/Y % Growth
 
 
 
Y/Y % Growth excluding FX(2)
 
 
2014
 
2013
 
 
FX Effect(2)
 
Gross Billings(1):
 
 
 
 
 
 
 
 
 
 
 
 
North America
 
$
781,769

 
$
681,319

 
14.7

%
 
$
(844
)
 
14.9

%
EMEA
 
513,588

 
492,318

 
4.3

%
 
14,983

 
1.3

%
Rest of World
 
521,854

 
234,132

 
122.9

%
 
(24,621
)
 
133.4

%
Consolidated billings
 
$
1,817,211

 
$
1,407,769

 
29.1

%
 
$
(10,482
)
 
29.8

%
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
North America
 
$
431,062

 
$
339,554

 
26.9

%
 
$
(288
)
 
27.0

%
EMEA
 
230,893

 
183,798

 
25.6

%
 
6,841

 
21.9

%
Rest of World
 
95,682

 
78,050

 
22.6

%
 
(9,417
)
 
34.7

%
Consolidated revenue
 
$
757,637

 
$
601,402

 
26.0

%
 
$
(2,864
)
 
26.5

%
 
 
 
 
 
 
 
 
 
 
 
 
 
(Loss) income from operations
 
$
(19,953
)
 
$
21,178

 
(194.2
)
%
 
$
1,685

 
(202.2
)
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss attributable to Groupon, Inc.
 
$
(37,795
)
 
$
(3,992
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss per share:
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
$(0.06)
 
$(0.01)
 
 
 
 
 
 
 
 
Diluted
 
$(0.06)
 
$(0.01)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average number of shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
682,378,690

 
658,800,417

 
 
 
 
 
 
 
 
Diluted
 
682,378,690

 
658,800,417

 
 
 
 
 
 
 
 

(1)
Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds. Includes direct billings and third party and other billings.
(2)
Represents the change in financial measures that would have resulted had average exchange rates in the reporting period been the same as those in effect during the three months ended March 31, 2013.






Groupon, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
 
Three Months Ended March 31,
 
2014
 
2013
Operating activities
 
 
 
Net loss
$
(35,363
)
 
$
(3,242
)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
 
 
 
Depreciation and amortization of property, equipment and software
22,092

 
15,114

Amortization of acquired intangible assets
12,648

 
5,586

Stock-based compensation
23,729

 
29,907

Deferred income taxes
573

 
(258
)
Excess tax benefits on stock-based compensation
(5,855
)
 
(832
)
(Gain) loss on equity method investments
(52
)
 
19

(Gain) loss, net from changes in fair value of contingent consideration
(39
)
 
68

Impairment of cost method investment
397

 
—

Change in assets and liabilities, net of acquisitions:
 
 
 
Restricted cash
2,950

 
2,523

Accounts receivable
(24,393
)
 
(7,684
)
Prepaid expenses and other current assets
(5,150
)
 
12,527

Accounts payable
7,315

 
(19,606
)
Accrued merchant and supplier payables
(23,649
)
 
(39,417
)
Accrued expenses and other current liabilities
(5,379
)
 
13,302

Other, net
9,459

 
753

Net cash (used in) provided by operating activities
(20,717
)
 
8,760

 
 
 
 
Net cash used in investing activities
(138,608
)
 
(30,679
)
 
 
 
 
Net cash used in financing activities
(41,492
)
 
(9,342
)
 
 
 
 
Effect of exchange rate changes on cash and cash equivalents
(831
)
 
(12,378
)
Net decrease in cash and cash equivalents
(201,648
)
 
(43,639
)
Cash and cash equivalents, beginning of period
1,240,472

 
1,209,289

Cash and cash equivalents, end of period
$
1,038,824

 
$
1,165,650






Groupon, Inc.
Consolidated Statements of Operations 
(in thousands, except share and per share amounts)
(unaudited)

 
 
Three Months Ended March 31,
 
 
2014
 
2013
Revenue:
 
 
 
 
Third party and other
 
$
426,429

 
$
439,108

Direct
 
331,208

 
162,294

Total revenue
 
757,637

 
601,402

Cost of revenue:
 
 
 
 
Third party and other
 
62,351

 
70,016

Direct
 
309,565

 
152,377

Total cost of revenue
 
371,916

 
222,393

Gross profit
 
385,721

 
379,009

Operating expenses:
 
 
 
 
Marketing
 
78,924

 
49,557

Selling, general and administrative
 
324,965

 
308,206

Acquisition-related expense, net
 
1,785

 
68

  Total operating expenses
 
405,674

 
357,831

(Loss) income from operations
 
(19,953
)
 
21,178

Other expense, net
 
(840
)
 
(5,083
)
(Loss) income before provision for income taxes
 
(20,793
)
 
16,095

Provision for income taxes
 
14,570

 
19,337

Net loss
 
(35,363
)
 
(3,242
)
Net income attributable to noncontrolling interests
 
(2,432
)
 
(750
)
Net loss attributable to Groupon, Inc.
 
$
(37,795
)
 
$
(3,992
)
 
 
 
 
 
Net loss per share
 
 
 
 
Basic
 
$(0.06)
 
$(0.01)
Diluted
 
$(0.06)
 
$(0.01)
 
 
 
 
 
Weighted average number of shares outstanding
 
 
 
 
Basic
 
682,378,690

 
658,800,417

Diluted
 
682,378,690

 
658,800,417






Groupon, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share amounts)

 
 
March 31, 2014
 
December 31, 2013
 
 
(unaudited)
 
 
Assets
 
 
 
 

Current assets:
 
 

 
 

Cash and cash equivalents
 
$
1,038,824

 
$
1,240,472

Accounts receivable, net
 
125,527

 
83,673

Deferred income taxes
 
29,897

 
27,938

Prepaid expenses and other current assets
 
234,102

 
210,415

Total current assets
 
1,428,350

 
1,562,498

Property, equipment and software, net
 
159,649

 
134,423

Goodwill
 
447,370

 
220,827

Intangible assets, net
 
140,738

 
28,443

Investments
 
24,450

 
20,652

Deferred income taxes, non-current
 
44,559

 
35,941

Other non-current assets
 
35,490

 
39,226

Total Assets
 
$
2,280,606

 
$
2,042,010

Liabilities and Equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
45,524

 
$
27,573

Accrued merchant and supplier payables
 
816,329

 
752,943

Accrued expenses
 
253,015

 
226,986

Deferred income taxes
 
48,368

 
47,558

Other current liabilities
 
134,315

 
132,718

Total current liabilities
 
1,297,551

 
1,187,778

Deferred income taxes, non-current
 
12,331

 
10,853

Other non-current liabilities
 
147,197

 
131,697

Total Liabilities
 
1,457,079

 
1,330,328

Commitments and contingencies
 
 
 
 
Stockholders' Equity
 
 
 
 
Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized, 687,288,634 shares issued and 679,780,134 shares outstanding at March 31, 2014 and 670,149,976 shares issued and 665,717,176 shares outstanding at December 31, 2013
 
69

 
67

Class B common stock, par value $0.0001 per share, 10,000,000 shares authorized, 2,399,976 shares issued and outstanding at March 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 March 31, 2014 and December 31, 2013
 
—

 
—

Additional paid-in capital
 
1,768,271

 
1,584,211

Treasury stock, at cost, 7,508,500 shares at March 31, 2014 and 4,432,800 shares at December 31, 2013
 
(76,048
)
 
(46,587
)
Accumulated deficit
 
(886,665
)
 
(848,870
)
Accumulated other comprehensive income
 
20,020

 
24,830

Total Groupon, Inc. Stockholders' Equity
 
825,647

 
713,651

Noncontrolling interests
 
(2,120
)
 
(1,969
)
Total Equity
 
823,527

 
711,682

Total Liabilities and Equity
 
$
2,280,606

 
$
2,042,010






Groupon, Inc.
Segment Information
(in thousands)
(unaudited)
 
Three Months Ended March 31,
 
 
2014
 
2013
 
North America
 

 
 
 
Gross billings (1)
$
781,769

 
$
681,319

 
Revenue
$
431,062

 
$
339,554

 
Segment cost of revenue and operating expenses (2)
419,677

 
298,188

 
Segment operating income (2)
$
11,385

 
$
41,366

 
Segment operating income as a percent of segment revenue
2.6

%
12.2

%
 
 
 
 
 
EMEA
 
 
 
 
Gross billings (1)
$
513,588

 
$
492,318

 
Revenue
$
230,893

 
$
183,798

 
Segment cost of revenue and operating expenses (2)
211,970

 
149,622

 
Segment operating income (2)
$
18,923

 
$
34,176

 
Segment operating income as a percent of segment revenue
8.2

%
18.6

%
 
 
 
 
 
Rest of World
 
 
 
 
Gross billings (1)
$
521,854

 
$
234,132

 
Revenue
$
95,682

 
$
78,050

 
Segment cost of revenue and operating expenses (2)
120,429

 
102,439

 
Segment operating loss (2)
$
(24,747
)
 
$
(24,389
)
 
Segment operating loss as a percent of segment revenue
(25.9
)
%
(31.2
)
%
 
(1)
Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds. Includes direct billings and third party and other billings.
(2)
Segment cost of revenue and operating expenses and segment operating income (loss) exclude stock-based compensation and acquisition-related expense (benefit), net.




Groupon, Inc.
Non-GAAP Reconciliation Schedules
(in thousands, except share and per share amounts)
(unaudited) 

Adjusted EBITDA and earnings (loss) per share excluding stock-based compensation, amortization of acquired intangible assets and acquisition-related expense, net are non-GAAP financial measures. The Company reconciles Adjusted EBITDA to the most comparable U.S. GAAP financial measure, "Net loss" for the periods presented, and the Company reconciles earnings (loss) per share excluding stock-based compensation, amortization of acquired intangible assets and acquisition-related expense, net to the most comparable U.S. GAAP financial measure, "Diluted net earnings (loss) per share" for the period presented.

The following is a quarterly reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, "Net loss."
    
 
Q1 2013
 
Q2 2013
 
Q3 2013
 
Q4 2013
 
Q1 2014
Net loss
$
(3,242
)
 
$
(5,551
)
 
$
(1,292
)
 
$
(78,861
)
 
$
(35,363
)
Adjustments:
 
 
 
 
 
 
 
 
 
  Stock-based compensation
29,907

 
32,446

 
26,870

 
32,239

 
23,729

  Acquisition related expense (benefit), net
68

 
(815
)
 
(1,529
)
 
2,265

 
1,785

  Depreciation and amortization
20,700

 
21,468

 
23,149

 
24,132

 
34,740

  Other expense (income), net
5,083

 
5,579

 
(832
)
 
84,833

 
840

  Provision for income taxes
19,337

 
27,384

 
15,936

 
7,380

 
14,570

Total adjustments
75,095

 
86,062

 
63,594

 
150,849

 
75,664

Adjusted EBITDA
$
71,853

 
$
80,511

 
$
62,302

 
$
71,988

 
$
40,301


The following is a reconciliation of diluted net loss per share to diluted loss per share excluding stock-based compensation, amortization of acquired intangible assets and acquisition-related expense, net for the three months ended March 31, 2014:
    
 
 
Three Months Ended March 31, 2014
Net loss attributable to Groupon, Inc.
 
$
(37,795
)
Stock-based compensation
 
23,729

Amortization of acquired intangible assets
 
12,648

Acquisition-related expense, net
 
1,785

Income tax effect of adjustments
 
(8,377
)
Net loss attributable to common stockholders excluding stock-based compensation, amortization of acquired intangible assets and acquisition-related expense, net
 
$
(8,010
)
 
 
 
Diluted shares
 
682,378,690

Incremental diluted shares (1)
 
—

Adjusted diluted shares
 
682,378,690

 
 
 
Diluted net loss per share
 
$
(0.06
)
Impact of stock-based compensation, amortization of acquired intangible assets and acquisition-related expense, net
 
0.05

Diluted loss per share excluding stock-based compensation, amortization of acquired intangible assets and acquisition-related expense, net
 
$
(0.01
)

(1)
Outstanding equity awards are not reflected in the calculation for the three months ended March 31, 2014 because the effect would be antidilutive.

    





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 "(Loss) income 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" and "Revenue," respectively, for the periods presented.
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 three months ended March 31, 2014 was as follows: 
 
 
Three Months Ended March 31, 2014
 
Three Months Ended March 31, 2014
 
 
At Avg. Q1 2013
Rates(1)
 
Exchange Rate
Effect(2)
 
As
Reported
 
At Avg. Q4 2013
Rates(3)
 
Exchange Rate
Effect(2)
 
As
Reported
Gross billings
 
$
1,827,693

 
$
(10,482
)
 
$
1,817,211

 
$
1,825,844

 
$
(8,633
)
 
$
1,817,211

Revenue
 
$
760,501

 
$
(2,864
)
 
$
757,637

 
$
759,885

 
$
(2,248
)
 
$
757,637

(Loss) income from operations
 
$
(21,638
)
 
$
1,685

 
$
(19,953
)
 
$
(20,777
)
 
$
824

 
$
(19,953
)

(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 ended March 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 period been the same as those in effect during the three months ended December 31, 2013.

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.
    
 
 
Q1 2013
 
Q2 2013
 
Q3 2013
 
Q4 2013
 
Q1 2014
 
EMEA Gross billings growth, excluding FX
(9
)
%
4

%
9

%
3

%
1

%
FX Effect
1

%
—

%
3

%
3

%
3

%
EMEA Gross billings growth
(8
)
%
4

%
12

%
6

%
4

%
 
 
 
 
 
 
 
 
 
 
 
 
Rest of World Gross billings growth, excluding FX
(6
)
%
(16
)
%
(4
)
%
(2
)
%
133

%
FX Effect
(5
)
%
(5
)
%
(9
)
%
(9
)
%
(10
)
%
Rest of World Gross billings growth
(11
)
%
(21
)
%
(13
)
%
(11
)
%
123

%
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Gross billings growth, excluding FX
5

%
11

%
11

%
5

%
30

%
FX Effect
(1
)
%
(1
)
%
(1
)
%
—

%
(1
)
%
Consolidated Gross billings growth
4

%
10

%
10

%
5

%
29

%
    
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.
    
 
 
Q1 2013
 
Q2 2013
 
Q3 2013
 
Q4 2013
 
Q1 2014
 
EMEA Revenue growth, excluding FX
(20
)
%
(25
)
%
(23
)
%
38

%
22

%
FX Effect
—

%
1

%
2

%
5

%
4

%
EMEA Revenue growth
(20
)
%
(24
)
%
(21
)
%
43

%
26

%
 
 
 
 
 
 
 
 
 
 
 
 
Rest of World Revenue growth, excluding FX
(8
)
%
(21
)
%
7

%
(6
)
%
35

%
FX Effect
(6
)
%
(5
)
%
(11
)
%
(9
)
%
(12
)
%
Rest of World Revenue growth
(14
)
%
(26
)
%
(4
)
%
(15
)
%
23

%
 
 
 
 
 
 
 
 
 
 
 
Consolidated Revenue growth, excluding FX
8

%
8

%
6

%
20

%
26

%
FX Effect
—

%
(1
)
%
(1
)
%
—

%
—

%
Consolidated Revenue growth
8

%
7

%
5

%
20

%
26

%





Groupon, Inc.
Supplemental Financial Information and Business Metrics (9) 
(financial data in thousands, except per share data; active customers in millions)
(unaudited)

 
 
Q1 2013
 
Q2 2013
 
Q3 2013
 
Q4 2013
 
Q1 2014
 
Segments
 
 
 
 
 
 
 
 
 
 
North America Segment:
 
 
 
 
 
 
 
Gross Billings (1):
 
 
 
 
 
 
 
 
 
 
 
Local(2) Gross Billings
$
450,841

 
$
453,030

 
$
405,913

 
$
439,131

 
$
456,952

 
 
Goods Gross Billings
165,359

 
196,878

 
194,565

 
286,039

 
242,896

 
 
Travel(2) Gross Billings
65,119

 
62,297

 
64,521

 
63,551

 
81,921

 
 
Total Gross Billings
$
681,319

 
$
712,205

 
$
664,999

 
$
788,721

 
$
781,769

 
 
Year-over-year growth
23

%
30

%
20

%
10

%
15

%
 
% Third Party and Other
78

%
74

%
72

%
67

%
70

%
 
% Direct
22

%
26

%
28

%
33

%
30

%
Gross Billings Trailing Twelve Months (TTM)
$
2,500,915

 
$
2,664,845

 
$
2,777,475

 
$
2,847,244

 
$
2,947,694

 
 
 
 
 
 
 
 
 
 
 
 
Revenue (3):
 
 
 
 
 
 
 
 
 
 
 
Local Revenue
$
172,294

 
$
177,377

 
$
162,346

 
$
161,601

 
$
177,247

 
 
Goods Revenue
151,209

 
186,028

 
185,914

 
268,281

 
237,435

 
 
Travel Revenue
16,051

 
13,777

 
12,578

 
13,902

 
16,380

 
 
Total Revenue
$
339,554

 
$
377,182

 
$
360,838

 
$
443,784

 
$
431,062

 
 
Year-over-year growth
42

%
45

%
24

%
18

%
27

%
 
% Third Party and Other
56

%
52

%
49

%
41

%
45

%
 
% Direct
44

%
48

%
51

%
59

%
55

%
Revenue TTM
$
1,266,689

 
$
1,383,690

 
$
1,452,925

 
$
1,521,358

 
$
1,612,866

 
 
 
 
 
 
 
 
 
 
 
 
Gross Profit (4):
 
 
 
 
 
 
 
 
 
 
 
Local Gross Profit
$
146,379

 
$
155,728

 
$
138,890

 
$
140,944

 
$
152,622

 
 
% of North America Total Local Gross Billings
32.5

%
34.4

%
34.2

%
32.1

%
33.4

%
 
Goods Gross Profit
12,456

 
26,977

 
21,609

 
21,030

 
12,604

 
 
% of North America Total Goods Gross Billings
7.5

%
13.7

%
11.1

%
7.4

%
5.2

%
 
Travel Gross Profit
13,521

 
11,881

 
11,070

 
12,352

 
14,442

 
 
% of North America Total Travel Gross Billings
20.8

%
19.1

%
17.2

%
19.4

%
17.6

%
 
Total Gross Profit
$
172,356

 
$
194,586

 
$
171,569

 
$
174,326

 
$
179,668

 
 
Year-over-year growth
2

%
12

%
7

%
15

%
4

%
 
% Third Party and Other
94

%
88

%
90

%
91

%
94

%
 
% Direct
6

%
12

%
10

%
9

%
6

%
 
% of North America Total Gross Billings
25.3

%
27.3

%
25.8

%
22.1

%
23.0

%
 
 
 
 
 
 
 
 
 
 
 
EMEA Segment:
 
 
 
 
 
 
 
 
 
 
Gross Billings:
 
 
 
 
 
 
 
 
 
 
 
Local Gross Billings
$
260,297

 
$
241,856

 
$
207,803

 
$
277,472

 
$
262,141

 
 
Goods Gross Billings
149,193

 
167,594

 
169,849

 
219,880

 
183,013

 
 
Travel Gross Billings
82,828

 
72,800

 
65,666

 
68,361

 
68,434

 
 
Total Gross Billings
$
492,318

 
$
482,250

 
$
443,318

 
$
565,713

 
$
513,588

 
 
Year-over-year growth
(8
)
%
4

%
12

%
6

%
4

%
 
Year-over-year growth, excluding FX (5)
(9
)
%
4

%
9

%
3

%
1

%
 
% Third Party and Other
98

%
100

%
98

%
83

%
83

%
 
% Direct
2

%
—

%
2

%
17

%
17

%
Gross Billings TTM
$
1,883,265

 
$
1,903,136

 
$
1,950,367

 
$
1,983,599

 
$
2,004,869

 
 
 
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
 
 
Local Revenue
$
111,589

 
$
110,229

 
$
92,141

 
$
116,061

 
$
109,120

 
 
Goods Revenue
53,326

 
35,119

 
41,279

 
119,274

 
106,889

 
 
Travel Revenue
18,883

 
14,614

 
14,530

 
15,870

 
14,884

 
 
Total Revenue
$
183,798

 
$
159,962

 
$
147,950

 
$
251,205

 
$
230,893

 
 
Year-over-year growth
(20
)
%
(24
)
%
(21
)
%
43

%
26

%
 
Year-over-year growth, excluding FX
(20
)
%
(25
)
%
(23
)
%
38

%
22

%
 
% Third Party and Other
96

%
99

%
94

%
61

%
61

%
 
% Direct
4

%
1

%
6

%
39

%
39

%
Revenue TTM
$
758,918

 
$
707,325

 
$
667,988

 
$
742,915

 
$
790,010

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
 
Q1 2013
 
Q2 2013
 
Q3 2013
 
Q4 2013
 
Q1 2014
 
Gross Profit:
 
 
 
 
 
 
 
 
 
 
 
Local Gross Profit
$
97,389

 
$
99,318

 
$
81,808

 
$
105,210

 
$
100,066

 
 
% of EMEA Total Local Gross Billings
37.4

%
41.1

%
39.4

%
37.9

%
38.2

%
 
Goods Gross Profit
$
39,974

 
$
27,108

 
$
28,943

 
$
33,526

 
$
27,302

 
 
% of EMEA Total Goods Gross Billings
26.8

%
16.2

%
17.0

%
15.2

%
14.9

%
 
Travel Gross Profit
16,358

 
13,105

 
12,930

 
14,457

 
13,669

 
 
% of EMEA Total Travel Gross Billings
19.7

%
18.0

%
19.7

%
21.1

%
20.0

%
 
Total Gross Profit
$
153,721

 
$
139,531

 
$
123,681

 
$
153,193

 
$
141,037

 
 
Year-over-year growth
(23
)
%
(24
)
%
(24
)
%
7

%
(8
)
%
 
% Third Party and Other
100

%
101

%
99

%
91

%
92

%
 
% Direct
—

%
(1
)
%
1

%
9

%
8

%
 
% of EMEA Total Gross Billings
31.2

%
28.9

%
27.9

%
27.1

%
27.5

%
 
 
 
 
 
 
 
 
 
 
 
Rest of World Segment:
 
 
 
 
 
 
 
 
 
 
Gross Billings:
 
 
 
 
 
 
 
 
 
 
 
Local Gross Billings
$
120,319

 
$
115,156

 
$
118,718

 
$
116,824

 
$
167,833

 
 
Goods Gross Billings
77,772

 
72,399

 
78,973

 
89,451

 
283,091

 
 
Travel Gross Billings
36,041

 
31,796

 
36,640

 
32,398

 
70,930

 
 
Total Gross Billings
$
234,132

 
$
219,351

 
$
234,331

 
$
238,673

 
$
521,854

 
 
Year-over-year growth
(11
)
%
(21
)
%
(13
)
%
(11
)
%
123

%
 
Year-over-year growth, excluding FX
(6
)
%
(16
)
%
(4
)
%
(2
)
%
133

%
 
% Third Party and Other
97

%
97

%
97

%
97

%
99

%
 
% Direct
3

%
3

%
3

%
3

%
1

%
Gross Billings TTM
$
1,048,973

 
$
992,302

 
$
956,833

 
$
926,487

 
$
1,214,209

 
 
 
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
 
 
Local Revenue
$
45,414

 
$
43,849

 
$
51,900

 
$
40,847

 
$
43,814

 
 
Goods Revenue
24,840

 
20,610

 
25,061

 
26,158

 
41,855

 
 
Travel Revenue
7,796

 
7,144

 
9,310

 
6,453

 
10,013

 
 
Total Revenue
$
78,050

 
$
71,603

 
$
86,271

 
$
73,458

 
$
95,682

 
 
Year-over-year growth
(14
)
%
(26
)
%
(4
)
%
(15
)
%
23

%
 
Year-over-year growth, excluding FX
(8
)
%
(21
)
%
7

%
(6
)
%
35

%
 
% Third Party and Other
91

%
92

%
91

%
90

%
94

%
 
% Direct
9

%
8

%
9

%
10

%
6

%
Revenue TTM
$
350,984

 
$
325,988

 
$
322,597

 
$
309,382

 
$
327,014

 
 
 
 
 
 
 
 
 
 
 
 
 
Gross Profit:
 
 
 
 
 
 
 
 
 
 
 
Local Gross Profit
$
39,490

 
$
35,885

 
$
44,435

 
$
33,596

 
$
34,748

 
 
% of Rest of World Total Local Gross Billings
32.8

%
31.2

%
37.4

%
28.8

%
20.7

%
 
Goods Gross Profit
6,712

 
8,966

 
12,016

 
11,781

 
22,135

 
 
% of Rest of World Total Goods Gross Billings
8.6

%
12.4

%
15.2

%
13.2

%
7.8

%
 
Travel Gross Profit
6,730

 
5,726

 
7,921

 
5,312

 
8,133

 
 
% of Rest of World Total Travel Gross Billings
18.7

%
18.0

%
21.6

%
16.4

%
11.5

%
 
Total Gross Profit
$
52,932

 
$
50,577

 
$
64,372

 
$
50,689

 
$
65,016

 
 
Year-over-year growth
(26
)
%
(33
)
%
1

%
(16
)
%
23

%
 
% Third Party and Other
100

%
101

%
99

%
101

%
102

%
 
% Direct
—

%
(1
)
%
1

%
(1
)
%
(2
)
%
 
% of Rest of World Total Gross Billings
22.6

%
23.1

%
27.5

%
21.2

%
12.5

%
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Results of Operations:
 
 
 
 
 
 
 
 
 
 
Gross Billings:
 
 
 
 
 
 
 
 
 
 
 
Local Gross Billings
$
831,457

 
$
810,042

 
$
732,434

 
$
833,427

 
$
886,926

 
 
Goods Gross Billings
392,324

 
436,871

 
443,387

 
595,370

 
709,000

 
 
Travel Gross Billings
183,988

 
166,893

 
166,827

 
164,310

 
221,285

 
 
Total Gross Billings
$
1,407,769

 
$
1,413,806

 
$
1,342,648

 
$
1,593,107

 
$
1,817,211

 
 
Year-over-year growth
4

%
10

%
10

%
5

%
29

%
 
Year-over-year growth, excluding FX
5

%
11

%
11

%
5

%
30

%
 
% Third Party and Other
88

%
87

%
85

%
77

%
82

%
 
% Direct
12

%
13

%
15

%
23

%
18

%
Gross Billings (TTM)
$
5,433,153

 
$
5,560,283

 
$
5,684,675

 
$
5,757,330

 
$
6,166,772

 
 
Year-over-year growth
16

%
11

%
12

%
7

%
14

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
 
Q1 2013
 
Q2 2013
 
Q3 2013
 
Q4 2013
 
Q1 2014
 
Revenue:
 
 
 
 
 
 
 
 
 
 
 
Local Revenue
$
329,297

 
$
331,455

 
$
306,387

 
$
318,509

 
$
330,181

 
 
Goods Revenue
229,375

 
241,757

 
252,254

 
413,713

 
386,179

 
 
Travel Revenue
42,730

 
35,535

 
36,418

 
36,225

 
41,277

 
  Total Revenue
$
601,402

 
$
608,747

 
$
595,059

 
$
768,447

 
$
757,637

 
 
Year-over-year growth
8

%
7

%
5

%
20

%
26

%
 
Year-over-year growth, excluding FX
8

%
8

%
6

%
20

%
26

%
 
% Third Party and Other
73

%
69

%
66

%
52

%
56

%
 
% Direct
27

%
31

%
34

%
48

%
44

%
Total Consolidated Revenue TTM
$
2,376,591

 
$
2,417,003

 
$
2,443,510

 
$
2,573,655

 
$
2,729,890

 
 
Year-over-year growth
27

%
18

%
12

%
10

%
15

%
 
 
 
 
 
 
 
 
 
 
 
 
Gross Profit:
 
 
 
 
 
 
 
 
 
 
 
Local Gross Profit
$
283,258

 
$
290,931

 
$
265,133

 
$
279,750

 
$
287,436

 
 
% of Total Consolidated Local Gross Billings
34.1

%
35.9

%
36.2

%
33.6

%
32.4

%
 
Goods Gross Profit
59,142

 
63,051

 
62,568

 
66,337

 
62,041

 
 
% of Total Consolidated Goods Gross Billings
15.1

%
14.4

%
14.1

%
11.1

%
8.8

%
 
Travel Gross Profit
36,609

 
30,712

 
31,921

 
32,121

 
36,244

 
 
% of Total Consolidated Travel Gross Billings
19.9

%
18.4

%
19.1

%
19.5

%
16.4

%
 
Total Gross Profit
$
379,009

 
$
384,694

 
$
359,622

 
$
378,208

 
$
385,721

 
 
Year-over-year growth
(14
)
%
(11
)
%
(7
)
%
6

%
2

%
 
% Third Party and Other
97

%
94

%
95

%
92

%
94

%
 
% Direct
3

%
6

%
5

%
8

%
6

%
 
% of Total Consolidated Gross Billings
26.9

%
27.2

%
26.8

%
23.7

%
21.2

%
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
$
71,853

 
$
80,511

 
$
62,302

 
$
71,988

 
$
40,301

 
 
% of Total Consolidated Gross Billings
5.1

%
5.7

%
4.6

%
4.5

%
2.2

%
 
% of Total Consolidated Revenue
11.9

%
13.2

%
10.5

%
9.4

%
5.3

%





Groupon, Inc.
Supplemental Financial Information and Business Metrics (9) 
(financial data in thousands, except per share data; 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."
    
 
 
Q1 2013
 
Q2 2013
 
Q3 2013
 
Q4 2013
 
Q1 2014
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
$
8,760

 
$
43,302

 
$
(11,905
)
 
$
178,275

 
$
(20,717
)
Purchases of property and equipment and capitalized software
(14,468
)
 
(14,042
)
 
(15,064
)
 
(19,931
)
 
(16,355
)
Free cash flow
$
(5,708
)
 
$
29,260

 
$
(26,969
)
 
$
158,344

 
$
(37,072
)
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities (TTM)
$
191,880

 
$
159,867

 
$
105,874

 
$
218,432

 
$
188,955

Purchases of property and equipment and capitalized software (TTM)
(97,221
)
 
(84,554
)
 
(83,608
)
 
(63,505
)
 
(65,392
)
Free cash flow (TTM)
$
94,659

 
$
75,313

 
$
22,266

 
$
154,927

 
$
123,563

 
 
 
 
 
 
 
 
 
 
 
Net cash used in investing activities
$
(30,679
)
 
$
(15,862
)
 
$
(26,444
)
 
$
(23,330
)
 
$
(138,608
)
Net cash used in financing activities
$
(9,342
)
 
$
(7,941
)
 
$
(8,970
)
 
$
(55,444
)
 
$
(41,492
)
 
 
 
 
 
 
 
 
 
 
 
Net cash used in investing activities (TTM)
$
(179,214
)
 
$
(134,923
)
 
$
(125,738
)
 
$
(96,315
)
 
$
(204,244
)
Net cash provided by (used in) financing activities (TTM)
$
11,028

 
$
(21,071
)
 
$
(32,748
)
 
$
(81,697
)
 
$
(113,847
)
 
 
 
 
 
 
 
 
 
 
 
Other Metrics:
 
 
 
 
 
 
 
Active Customers (6)
 
 
 
 
 
 
 
 
North America
18.2

 
19.1

 
19.9

 
20.8

 
21.8

 
EMEA
14.0

 
13.9

 
14.0

 
14.2

 
14.5

 
Rest of World
9.5

 
9.6

 
9.6

 
9.9

 
15.5

 
Total Active Customers
41.7

 
42.6

 
43.5

 
44.9

 
51.8

 
 
 
 
 
 
 
 
 
 
 
TTM Gross Billings / Average Active Customer (7)
 
 
 
 
 
 
 
 
 
North America
$
151

 
$
156

 
$
155

 
$
150

 
$
147

EMEA
$
137

 
$
135

 
$
137

 
$
139

 
$
141

Rest of World
$
116

 
$
108

 
$
102

 
$
95

 
$
97

Consolidated
$
138

 
$
138

 
$
137

 
$
134

 
$
132

 
 
 
 
 
 
 
 
 
 
Headcount
 
 
 
 
 
 
 
 
Sales (8)
4,566

 
4,679

 
4,801

 
4,834

 
5,231

 
% North America
28
%
 
26
%
 
28
%
 
29
%
 
27
%
 
% EMEA
38
%
 
39
%
 
37
%
 
37
%
 
37
%
 
% Rest of World
34
%
 
35
%
 
35
%
 
34
%
 
36
%
 
Other
6,433

 
6,306

 
6,453

 
6,449

 
7,099

 
Total Headcount
10,999

 
10,985

 
11,254

 
11,283

 
12,330


(1)
Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds. Includes direct billings and third party and other billings.
(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, reservation and commission revenue, were previously aggregated with our Travel category. In the current period, the Company has 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, reservation 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 period 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)
Reflects the total gross billings generated in the trailing twelve months per average active customer over that period.
(8)
Includes merchant sales representatives, as well as sales support.
(9)
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.