EX-99.1 2 exhibit991-q12015.htm EXHIBIT 99.1 - EARNINGS RELEASE Exhibit 99.1 - Q1 2015



Groupon Announces First Quarter 2015 Results
 
•
Gross billings of $1.6 billion
•
Revenue of $750.4 million
•
Adjusted EBITDA of $72.4 million
•
GAAP loss per share of $0.02; non-GAAP earnings per share of $0.03
•
Free Cash Flow of $222.0 million for the trailing twelve month period
 
CHICAGO - (BUSINESS WIRE) - May 5, 2015 - Groupon, Inc. (NASDAQ: GRPN) today announced financial results for the quarter ended March 31, 2015.
 
“Q1 was a strong quarter, despite significant headwinds from foreign exchange rates, as we delivered 58% year-over-year growth in Adjusted EBITDA,” said Eric Lefkofsky, CEO of Groupon. “Our North America business saw its third-straight quarter of double digit billings increases in all three categories, and we made continued progress in our mission to connect local commerce through our predominantly mobile marketplace.”

Groupon previously announced that it has entered into an agreement to sell a controlling stake in Ticket Monster, its South Korean e-commerce business, to a partnership formed by KKR and Anchor Equity Partners. As a result, Ticket Monster will be presented as a discontinued operation in the Company’s consolidated financial statements for all historical periods, effective in the first quarter 2015. Results have been retrospectively adjusted to exclude Ticket Monster in this release and in the tables accompanying this release. As such, all financial information and operational metrics herein pertain to continuing operations, unless otherwise noted.
 
First Quarter 2015 Summary
 
•
Gross billings, which reflect the total dollar value of customer purchases of goods and services, increased to $1.6 billion in the first quarter 2015, compared with $1.5 billion in the first quarter 2014. Gross billings grew 10% globally, excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter. On this F/X neutral basis, North America billings increased 14%, EMEA increased 7% and Rest of World declined 1%. Including the $117.7 million unfavorable impact from foreign exchange, billings increased 2% compared with first quarter 2014.

•
Revenue increased to $750.4 million in the first quarter 2015, compared with $728.4 million in the first quarter 2014. Revenue grew 10%, excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter. On this F/X neutral basis, North America revenue increased 11%, EMEA increased 13% and Rest of World declined 8%. Including the $51.3 million unfavorable impact from foreign exchange, revenue increased 3% compared with first quarter 2014.

•
Gross profit was $347.4 million in the first quarter 2015, compared with $365.5 million in the first quarter 2014. Excluding the $27.7 million unfavorable impact from year-over-year




changes in foreign exchange rates throughout the quarter, gross profit would have been $375.1 million.

•
Adjusted EBITDA, a non-GAAP financial measure, was $72.4 million in the first quarter 2015, compared with $45.8 million in the first quarter 2014, as lower gross profit was more than offset by lower operating expenses, both reflecting the impact of year-over-year changes in foreign exchange rates.

•
Net loss attributable to common stockholders was $14.3 million, or $0.02 per share. Non-GAAP net earnings attributable to common stockholders was $21.3 million, or $0.03 per share.

•
First quarter 2015 results included $19.5 million of pre-tax non-operating foreign currency losses, $17.6 million of which was related to non-cash losses on intercompany balances.

•
Operating cash flow for the trailing twelve months ended March 31, 2015 was $307.8 million. Free cash flow, a non-GAAP financial measure, was $22.4 million in the first quarter 2015, bringing free cash flow for the trailing twelve months ended March 31, 2015 to $222.0 million.

•
At the end of the quarter, Groupon had $975.5 million 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 6% year-over-year to 54 million in the first quarter 2015. North America units increased 8%, EMEA units increased 10% and Rest of World units declined 7%.
•
Active deals: At the end of the first quarter 2015, on average, active deals were more than 425,000 globally, with over 200,000 in North America. Both include the addition of nearly 60,000 Coupons.
•
Active customers: Active customers, or customers that have purchased a voucher or product within the last twelve months, grew 7% year-over-year, to 48.1 million as of March 31, 2015, comprising 24.6 million in North America, 15.3 million in EMEA, and 8.2 million in Rest of World.
•
Customer spend: First quarter 2015 trailing twelve month billings per average active customer was $135, compared with $136 in the first quarter 2014.
•
Traffic: Approximately 105 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 first quarter 2015.
•
Search: In the first quarter 2015, approximately 27% of total transactions in North America were related to search, compared with 20% in the first quarter 2014.





Ticket Monster Sale
As previously disclosed, on April 20, 2015, Groupon announced the sale of a controlling stake in Ticket Monster, its South Korean e-commerce business, for $360 million, to a partnership formed by KKR and Hong-Kong-based Anchor Equity Partners. Groupon will ultimately retain a 41% fully diluted stake in Ticket Monster, upon vesting of management’s interest. The transaction is expected to close in the second quarter 2015, subject to regulatory and customary closing conditions. The company continues to explore a range of financing and strategic alternatives for its other Asian businesses, as announced in the third quarter 2014.

Share Repurchase
During the first quarter 2015, under its existing $300 million share repurchase program, Groupon repurchased 2,417,700 shares of its Class A common stock at an average price of $7.67 per share, for an aggregate purchase price of $18.5 million. Up to $83.0 million of Class A common stock remains available for repurchase under this program, through August 2015. In April 2015, Groupon announced that its Board approved a new $300 million share repurchase program. The new share repurchase program is subject to, and will be effective upon, the closing of the proposed Ticket Monster transaction, through August 2017. The timing and amount of any share repurchases are determined based on market conditions, share price and other factors, and the programs may be discontinued or suspended at any time.
 
Outlook
For the second quarter 2015, reflecting current foreign exchange rates and the exclusion of Ticket Monster, Groupon expects revenue of between $700 million and $750 million. This guidance anticipates approximately 800 basis points of unfavorable impact on the year-over-year growth rate from changes in foreign exchange rates.
 
Based on current foreign exchange rates, Groupon expects Adjusted EBITDA for the second quarter 2015 of between $55 million and $75 million, and non-GAAP earnings per share from continuing operations of between $0.01 and $0.03.
 
For the full year 2015, based on current foreign exchange rates and the exclusion of Ticket Monster, Groupon expects revenue of between $3.15 billion and $3.3 billion. This guidance anticipates approximately 700 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, Groupon continues to expect Adjusted EBITDA for the full year 2015 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. We present foreign exchange rate neutral information to facilitate comparisons to our historical operating results.
 
Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, 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) attributable to common stockholders and non-GAAP earnings (loss) per share adjust our net loss attributable to common stockholders and earnings (loss) per share to exclude the impact of stock-based compensation expense, amortization of acquired intangible assets, acquisition-related expense (benefit), net, non-operating foreign currency gains and losses on intercompany balances and income (loss) from discontinued operations, and the income tax effect of those items. We believe that these non-GAAP financial measures provide useful supplemental information for evaluating our operating performance.
Beginning in the first quarter 2015, we have updated our non-GAAP earnings (loss) attributable to common stockholders and non-GAAP earnings (loss) per share measures to exclude non-operating foreign currency gains and losses on intercompany balances and income (loss) from discontinued operations, in addition to stock compensation, acquisition-related expense (benefit), net, and amortization of acquired intangibles, which we have excluded historically. We believe that excluding non-operating foreign currency gains and losses on intercompany balances provides meaningful supplemental information about our operating performance because those gains and losses are driven by changes in currency exchange rates. Additionally, we believe that excluding income (loss) from discontinued operations provides meaningful information for evaluating the operating performance of our ongoing business by excluding the results of operations that are being sold.
 
Free cash flow is a non-GAAP financial measure that comprises net cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software from continuing operations. 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 including fluctuations in currency exchange rates; 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; completing and realizing the anticipated benefits from acquisitions, dispositions, joint ventures and strategic investments, including our proposed Ticket Monster transaction; seasonality; payment-related risks; customer and merchant fraud; global economic uncertainty; and our ability to raise capital if necessary. For additional information regarding these and other risks and uncertainties, we urge you to refer to the factors included under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's Annual Report on Form 10-K 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 5, 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
ir@groupon.com
 
 
 
 
 
 
 
 
 
 
 





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

The financial results of Ticket Monster are presented as discontinued operations and its assets and liabilities are presented as held for sale in the condensed consolidated financial statements and accompanying tables. All prior period financial information and operational metrics have been retrospectively adjusted to reflect this presentation.
 
 
Three Months Ended March 31,
 
Y/Y % Growth
 
 
 
Y/Y % Growth excluding FX(2)
 
 
2015
 
2014
 
 
FX Effect(2)
 
Gross Billings(1):
 
 
 
 
 
 
 
 
 
 
 
 
North America
 
$
893,977

 
$
781,769

 
14.4

%
 
$
(1,100
)
 
14.5

%
EMEA
 
459,189

 
513,588

 
(10.6
)

 
(91,866
)
 
7.3


Rest of World
 
198,835

 
225,349

 
(11.8
)

 
(24,772
)
 
(0.8
)

Consolidated gross billings
 
$
1,552,001

 
$
1,520,706

 
2.1

%
 
$
(117,738
)
 
9.8

%
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
North America
 
$
479,882

 
$
431,062

 
11.3

%
 
$
(328
)
 
11.4

%
EMEA
 
216,220

 
230,893

 
(6.4
)

 
(43,894
)
 
12.7


Rest of World
 
54,254

 
66,460

 
(18.4
)

 
(7,085
)
 
(7.7
)

Consolidated revenue
 
$
750,356

 
$
728,415

 
3.0

%
 
$
(51,307
)
 
10.1

%
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from operations
 
$
5,295

 
$
(6,364
)
 
183.2

%
 
$
(1,405
)
 
205.3

%
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss from continuing operations
 
(16,739
)
 
(21,774
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) from discontinued operations, net of tax
 
6,284

 
(13,589
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net loss attributable to Groupon, Inc.
 
$
(14,273
)
 
$
(37,795
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic net income (loss) per share:
 
 
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
$
(0.03
)
 
$
(0.04
)
 
 
 
 
 
 
 
 
Discontinued operations
 
0.01

 
(0.02
)
 
 
 
 
 
 
 
 
Basic net loss per share
 
$
(0.02
)
 
$
(0.06
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted net income (loss) per share:
 
 
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
$
(0.03
)
 
$
(0.04
)
 
 
 
 
 
 
 
 
Discontinued operations
 
0.01

 
(0.02
)
 
 
 
 
 
 
 
 
Diluted net loss per share
 
$
(0.02
)
 
$
(0.06
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average number of shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
676,382,937

 
682,378,690

 
 
 
 
 
 
 
 
Diluted
 
676,382,937

 
682,378,690

 
 
 
 
 
 
 
 

(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 period been the same as those in effect during the three months ended March 31, 2014.






Groupon, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
 
Three Months Ended March 31,
 
2015
 
2014
Operating activities
 
 
 
Net loss
$
(10,455
)
 
$
(35,363
)
Less: Income (loss) from discontinued operations, net of tax
6,284

 
(13,589
)
Loss from continuing operations
(16,739
)
 
(21,774
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
Depreciation and amortization of property, equipment and software
26,266

 
21,448

Amortization of acquired intangible assets
5,934

 
5,985

Stock-based compensation
35,144

 
22,911

Deferred income taxes
22

 
573

Excess tax benefits on stock-based compensation
(2,896
)
 
(5,855
)
Gain on equity method investments
—

 
(52
)
Gain from changes in fair value of contingent consideration
(279
)
 
(39
)
Impairments of investments
—

 
397

Change in assets and liabilities, net of acquisitions:
 
 
 
Restricted cash
3,245

 
3,536

Accounts receivable
(8,901
)
 
(20,835
)
Prepaid expenses and other current assets
(2,513
)
 
3,013

Accounts payable
2,244

 
2,313

Accrued merchant and supplier payables
(17,034
)
 
(33,523
)
Accrued expenses and other current liabilities
(2,470
)
 
(2,202
)
Other, net
18,688

 
9,530

Net cash provided by (used in) operating activities from continuing operations
40,711

 
(14,574
)
Net cash used in operating activities from discontinued operations
(24,355
)
 
(6,143
)
Net cash provided by (used in) operating activities
16,356

 
(20,717
)
 
 
 
 
Net cash used in investing activities from continuing operations
(19,443
)
 
(62,994
)
Net cash used in investing activities from discontinued operations
(624
)
 
(75,614
)
Net cash used in investing activities
(20,067
)
 
(138,608
)
 
 
 
 
Net cash used in financing activities
(32,942
)
 
(41,492
)
 
 
 
 
Effect of exchange rate changes on cash and cash equivalents, including cash classified within current assets held for sale
(30,199
)
 
(831
)
Net decrease in cash and cash equivalents, including cash classified within current assets held for sale
(66,852
)
 
(201,648
)
Less: Net (decrease) increase in cash classified within current assets held for sale
(25,722
)
 
18,006

Net decrease in cash and cash equivalents
(41,130
)
 
(219,654
)
Cash and cash equivalents, beginning of period
1,016,634

 
1,240,472

Cash and cash equivalents, end of period
$
975,504

 
$
1,020,818






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

 
 
Three Months Ended March 31,
 
 
2015
 
2014
Revenue:
 
 
 
 
Third party and other
 
$
360,121

 
$
397,702

Direct
 
390,235

 
330,713

Total revenue
 
750,356

 
728,415

Cost of revenue:
 
 
 
 
Third party and other
 
51,697

 
53,802

Direct
 
351,253

 
309,101

Total cost of revenue
 
402,950

 
362,903

Gross profit
 
347,406

 
365,512

Operating expenses:
 
 
 
 
Marketing
 
52,533

 
69,185

Selling, general and administrative
 
289,847

 
300,906

Acquisition-related (benefit) expense, net
 
(269
)
 
1,785

  Total operating expenses
 
342,111

 
371,876

Income (loss) from operations
 
5,295

 
(6,364
)
Other expense, net(1) 
 
(19,927
)
 
(840
)
Loss from continuing operations before provision for income taxes
 
(14,632
)
 
(7,204
)
Provision for income taxes
 
2,107

 
14,570

Loss from continuing operations
 
(16,739
)
 
(21,774
)
Income (loss) from discontinued operations, net of tax
 
6,284

 
(13,589
)
Net loss
 
(10,455
)
 
(35,363
)
Net income attributable to noncontrolling interests
 
(3,818
)
 
(2,432
)
Net loss attributable to Groupon, Inc.
 
$
(14,273
)
 
$
(37,795
)
 
 
 
 
 
Basic net income (loss) per share:
 
 
 
 
Continuing operations
 
$
(0.03
)
 
$
(0.04
)
Discontinued operations
 
0.01

 
(0.02
)
Basic net loss per share
 
$
(0.02
)
 
$
(0.06
)
 
 
 
 
 
Diluted net income (loss) per share:
 
 
 
 
Continuing operations
 
$
(0.03
)
 
$
(0.04
)
Discontinued operations
 
0.01

 
(0.02
)
Diluted net loss per share
 
$
(0.02
)
 
$
(0.06
)
 
 
 
 
 
Weighted average number of shares outstanding
 
 
 
 
Basic
 
676,382,937

 
682,378,690

Diluted
 
676,382,937

 
682,378,690


(1)
Other expense, net includes foreign currency losses of $19.5 million and $0.7 million for the three months ended March 31, 2015 and 2014, respectively.





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

 
 
March 31, 2015
 
December 31, 2014
 
 
(unaudited)
 
 
Assets
 
 
 
 

Current assets:
 
 

 
 

Cash and cash equivalents
 
$
975,504

 
$
1,016,634

Accounts receivable, net
 
92,140

 
90,597

Deferred income taxes
 
44,379

 
16,271

Prepaid expenses and other current assets
 
184,092

 
192,382

Current assets held for sale
 
362,731

 
85,445

Total current assets
 
1,658,846

 
1,401,329

Property, equipment and software, net
 
169,966

 
176,004

Goodwill
 
224,685

 
236,756

Intangible assets, net
 
24,854

 
30,609

Investments
 
22,970

 
24,298

Deferred income taxes, non-current
 
39,453

 
41,323

Other non-current assets
 
13,877

 
16,173

Non-current assets held for sale
 
—

 
301,105

Total Assets
 
$
2,154,651

 
$
2,227,597

Liabilities and Equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
17,539

 
$
13,822

Accrued merchant and supplier payables
 
723,593

 
772,156

Accrued expenses
 
194,311

 
214,260

Deferred income taxes
 
29,077

 
31,998

Other current liabilities
 
125,243

 
127,121

Current liabilities held for sale
 
172,375

 
166,239

Total current liabilities
 
1,262,138

 
1,325,596

Deferred income taxes, non-current
 
719

 
773

Other non-current liabilities
 
122,781

 
129,531

Non-current liabilities held for sale
 
—

 
6,753

Total Liabilities
 
1,385,638

 
1,462,653

Commitments and contingencies
 
 
 
 
Stockholders' Equity
 
 
 
 
Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized, 704,655,248 shares issued and 674,998,444 shares outstanding at March 31, 2015 and 699,008,084 shares issued and 671,768,980 shares outstanding at December 31, 2014
 
70

 
70

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, 2015 and December 31, 2014
 
—

 
—

Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized, no shares issued and outstanding at March 31, 2015 and December 31, 2014
 
—

 
—

Additional paid-in capital
 
1,873,582

 
1,847,420

Treasury stock, at cost, 29,656,804 shares at March 31, 2015 and 27,239,104 shares at December 31, 2014
 
(217,000
)
 
(198,467
)
Accumulated deficit
 
(936,233
)
 
(921,960
)
Accumulated other comprehensive income
 
44,216

 
35,763

Total Groupon, Inc. Stockholders' Equity
 
764,635

 
762,826

Noncontrolling interests
 
4,378

 
2,118

Total Equity
 
769,013

 
764,944

Total Liabilities and Equity
 
$
2,154,651

 
$
2,227,597






Groupon, Inc.
Segment Information
(in thousands)
(unaudited)
 
 
Three Months Ended March 31,
 
 
 
2015
 
2014
 
North America
 
 

 
 
 
Gross billings (1)
 
$
893,977

 
$
781,769

 
Revenue
 
479,882

 
431,062

 
Segment cost of revenue and operating expenses (2)
 
455,216

 
419,677

 
Segment operating income (2)
 
$
24,666

 
$
11,385

 
Segment operating income as a percent of segment gross billings
 
2.8

%
1.5

%
Segment operating income as a percent of segment revenue
 
5.1

%
2.6

%
 
 
 
 
 
 
EMEA
 
 
 
 
 
Gross billings (1)
 
$
459,189

 
$
513,588

 
Revenue
 
216,220

 
230,893

 
Segment cost of revenue and operating expenses (2)
 
196,568

 
211,970

 
Segment operating income (2)
 
$
19,652

 
$
18,923

 
Segment operating income as a percent of segment gross billings
 
4.3

%
3.7

%
Segment operating income as a percent of segment revenue
 
9.1

%
8.2

%
 
 
 
 
 
 
Rest of World
 
 
 
 
 
Gross billings (1)
 
$
198,835

 
$
225,349

 
Revenue
 
54,254

 
66,460

 
Segment cost of revenue and operating expenses (2)
 
58,402

 
78,436

 
Segment operating loss (2)
 
$
(4,148
)
 
$
(11,976
)
 
Segment operating loss as a percent of segment gross billings
 
(2.1
)
%
(5.3
)
%
Segment operating loss as a percent of segment revenue
 
(7.6
)
%
(18.0
)
%

(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, non-GAAP earnings attributable to common stockholders 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 from continuing operations" 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 from continuing operations."
    
 
Q1 2014
 
Q2 2014
 
Q3 2014
 
Q4 2014
 
Q1 2015
(Loss) income from continuing operations
$
(21,774
)
 
$
(10,692
)
 
$
(12,573
)
 
$
26,566

 
$
(16,739
)
Adjustments:
 
 
 
 
 
 
 
 
 
  Stock-based compensation
22,911

 
29,738

 
32,680

 
29,961

 
35,144

  Acquisition-related expense (benefit), net
1,785

 
597

 
(304
)
 
(809
)
 
(269
)
  Depreciation and amortization
27,433

 
27,024

 
30,462

 
30,122

 
32,200

  Other expense, net
840

 
1,023

 
20,056

 
11,531

 
19,927

  Provision (benefit) for income taxes
14,570

 
12,045

 
(6,434
)
 
(4,457
)
 
2,107

Total adjustments
67,539

 
70,427

 
76,460

 
66,348

 
89,109

Adjusted EBITDA
$
45,765

 
$
59,735

 
$
63,887

 
$
92,914

 
$
72,370


The following is a reconciliation of net income (loss) attributable to common stockholders to non-GAAP net income (loss) attributable to common stockholders and a reconciliation of diluted net income (loss) per share to non-GAAP net income (loss) per share for the three months ended March 31, 2015:
    
 
 
Three Months Ended March 31, 2015
Net income (loss) attributable to common stockholders
 
$
(14,273
)
Stock-based compensation
 
35,144

Amortization of acquired intangible assets
 
5,934

Acquisition-related (benefit) expense, net
 
(269
)
Intercompany foreign currency losses (gains)
 
17,638

Income tax effect of above adjustments
 
(16,559
)
Income from discontinued operations, net of tax
 
(6,284
)
Non-GAAP net income (loss) attributable to common stockholders
 
$
21,331

 
 
 
Diluted shares
 
676,382,937

Incremental diluted shares
 
8,715,925

Adjusted diluted shares
 
685,098,862

 
 
 
Diluted net income (loss) per share
 
$
(0.02
)
Impact of stock-based compensation, amortization of acquired intangible assets, acquisition-related (benefit) expense, net, intercompany foreign currency losses (gains), income from discontinued operations and related tax effects
 
0.05

Non-GAAP net income (loss) per share
 
$
0.03






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 continuing 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 effect on the Company's gross billings, revenue and income (loss) from changes in exchange rates versus the U.S. Dollar for the three months ended March 31, 2015 was as follows: 
 
 
Three Months Ended March 31, 2015
 
Three Months Ended March 31, 2015
 
 
At Avg. Q1 2014
Rates(1)
 
Exchange Rate
Effect(2)
 
As
Reported
 
At Avg.
Q4 2014
Rates(3)
 
Exchange Rate
Effect(2)
 
As
Reported
Gross billings
 
$
1,669,739

 
$
(117,738
)
 
$
1,552,001

 
$
1,609,255

 
$
(57,254
)
 
$
1,552,001

Revenue
 
801,663

 
(51,307
)
 
750,356

 
775,503

 
(25,147
)
 
750,356

Income (loss) from operations
 
$
6,700

 
$
(1,405
)
 
$
5,295

 
$
6,460

 
$
(1,165
)
 
$
5,295


(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, 2014.
(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, 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.
    
 
 
Q1 2014
 
Q2 2014
 
Q3 2014
 
Q4 2014
 
Q1 2015
 
EMEA Gross billings growth, excluding FX
1

%
(4
)
%
10

%
8

%
7

%
FX Effect
3

 
4

 
—

 
(9
)
 
(18
)
 
EMEA Gross billings growth
4

%
—

%
10

%
(1
)
%
(11
)
%
 
 
 
 
 
 
 
 
 
 
 
 
Rest of World Gross billings growth, excluding FX
9

%
8

%
1

%
—

%
(1
)
%
FX Effect
(13
)
 
(8
)
 
(4
)
 
(10
)
 
(11
)
 
Rest of World Gross billings growth
(4
)
%
—

%
(3
)
%
(10
)
%
(12
)
%
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Gross billings growth, excluding FX
9

%
6

%
12

%
13

%
10

%
FX Effect
(1
)
 
—

 
(1
)
 
(5
)
 
(8
)
 
Consolidated Gross billings growth
8

%
6

%
11

%
8

%
2

%






    

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 2014
 
Q2 2014
 
Q3 2014
 
Q4 2014
 
Q1 2015
 
EMEA Revenue growth, excluding FX
22

%
36

%
55

%
18

%
13

%
FX Effect
4

 
6

 
1

 
(10
)
 
(19
)
 
EMEA Revenue growth
26

%
42

%
56

%
8

%
(6
)
%
 
 
 
 
 
 
 
 
 
 
 
 
Rest of World Revenue growth, excluding FX
(2
)
%
(1
)
%
(20
)
%
(9
)
%
(8
)
%
FX Effect
(13
)
 
(9
)
 
(4
)
 
(10
)
 
(10
)
 
Rest of World Revenue growth
(15
)
%
(10
)
%
(24
)
%
(19
)
%
(18
)
%
 
 
 
 
 
 
 
 
 
 
 
Consolidated Revenue growth, excluding FX
22

%
17

%
21

%
19

%
10

%
FX Effect
(1
)
 
1

 
(1
)
 
(4
)
 
(7
)
 
Consolidated Revenue growth
21

%
18

%
20

%
15

%
3

%
    
The effect on North America's gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended March 31, 2015 was as follows: 
 
At Avg. Q1
2014 Rates (1)
 
Exchange
Rate
Effect (2)
 
March 31, 2015
As Reported
 
March 31, 2014
As Reported
 
Y/Y %
Growth
 
Y/Y% Growth excluding FX
 
 
Local:
 
 
 
 
 
 
 
 
 
 
 
 
Third party and other
$
513,222

 
$
(664
)
 
$
512,558

 
$
456,952

 
12.2

%
12.3

%
 
 
 
 
 
 
 
 
 
 
 
 
 
Goods:
 
 
 
 
 
 
 
 
 
 
 
 
Third party
6,677

 
(317
)
 
6,360

 
6,782

 
(6.2
)
%
(1.5
)
%
Direct
278,381

 
—

 
278,381

 
236,114

 
17.9


17.9


Total
285,058

 
(317
)
 
284,741

 
242,896

 
17.2

%
17.4

%
 
 
 
 
 
 
 
 
 
 
 
 
 
Travel:
 
 
 
 
 
 
 
 
 
 
 
 
Third party
96,797

 
(119
)
 
96,678

 
81,921

 
18.0

%
18.2

%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total gross billings
$
895,077

 
$
(1,100
)
 
$
893,977

 
$
781,769

 
14.4

%
14.5

%

























The effect on EMEA's gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended March 31, 2015 was as follows: 
 
At Avg. Q1
2014 Rates (1)
 
Exchange
Rate
Effect (2)
 
March 31, 2015
As Reported
 
March 31, 2014
As Reported
 
Y/Y %
Growth
 
Y/Y% Growth excluding FX
 
 
 
Local:
 
 
 
 
 
 
 
 
 
 
 
 
Third party and other
$
258,190

 
$
(40,592
)
 
$
217,598

 
$
262,141

 
(17.0
)
%
(1.5
)
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Goods:
 
 
 
 
 
 
 
 
 
 
 
 
Third party
83,200

 
(13,663
)
 
69,537

 
93,599

 
(25.7
)
%
(11.1
)
%
Direct
129,559

 
(22,570
)
 
106,989

 
89,414

 
19.7


44.9


Total
212,759

 
(36,233
)
 
176,526

 
183,013

 
(3.5
)
%
16.3

%
 
 
 
 
 
 
 
 
 
 
 
 
 
Travel:
 
 
 
 
 
 
 
 
 
 
 
 
Third party
80,106

 
(15,041
)
 
65,065

 
68,434

 
(4.9
)
%
17.1

%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total gross billings
$
551,055

 
$
(91,866
)
 
$
459,189

 
$
513,588

 
(10.6
)
%
7.3

%

The effect on Rest of World's gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended March 31, 2015 was as follows: 
 
At Avg. Q1
2014 Rates (1)
 
Exchange
Rate
Effect (2)
 
March 31, 2015
As Reported
 
March 31, 2014
As Reported
 
Y/Y %
Growth
 
Y/Y% Growth excluding FX
 
 
Local:
 
 
 
 
 
 
 
 
 
 
 
 
Third party and other
$
112,736

 
$
(13,001
)
 
$
99,735

 
$
112,660

 
(11.5
)
%
0.1

%
 
 
 
 
 
 
 
 
 
 
 
 
 
Goods:
 
 
 
 
 
 
 
 
 
 
 
 
Third party
67,910

 
(6,621
)
 
61,289

 
74,338

 
(17.6
)
%
(8.6
)
%
Direct
5,594

 
(729
)
 
4,865

 
5,185

 
(6.2
)

7.9


Total
73,504

 
(7,350
)
 
66,154

 
79,523

 
(16.8
)
%
(7.6
)
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Travel:
 
 
 
 
 
 
 
 
 
 
 
 
Third party
37,367

 
(4,421
)
 
32,946

 
33,166

 
(0.7
)
%
12.7

%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total gross billings
$
223,607

 
$
(24,772
)
 
$
198,835

 
$
225,349

 
(11.8
)
%
(0.8
)
%

    














The effect on consolidated gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended March 31, 2015 was as follows: 

 
At Avg. Q1
2014 Rates (1)
 
Exchange
Rate
Effect (2)
 
March 31, 2015
As Reported
 
March 31, 2014
As Reported
 
Y/Y %
Growth
 
Y/Y% Growth excluding FX
 
 
Local:
 
 
 
 
 
 
 
 
 
 
 
 
Third party and other
$
884,148

 
$
(54,257
)
 
$
829,891

 
$
831,753

 
(0.2
)
%
6.3

%
 
 
 
 
 
 
 
 
 
 
 
 
 
Goods:
 
 
 
 
 
 
 
 
 
 
 
 
Third party
157,787

 
(20,601
)
 
137,186

 
174,719

 
(21.5
)
%
(9.7
)
%
Direct
413,534

 
(23,299
)
 
390,235

 
330,713

 
18.0

 
25.0

 
Total
571,321

 
(43,900
)
 
527,421

 
505,432

 
4.4

%
13.0

%
 
 
 
 
 
 
 
 
 
 
 
 
 
Travel:
 
 
 
 
 
 
 
 
 
 
 
 
Third party
214,270

 
(19,581
)
 
194,689

 
183,521

 
6.1

%
16.8

%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total gross billings
$
1,669,739

 
$
(117,738
)
 
$
1,552,001

 
$
1,520,706

 
2.1

%
9.8

%


(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, 2014.
(2)
Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable period.




Groupon, Inc.
Supplemental Financial Information and Business Metrics (9)(10) 
(financial data in thousands; active customers in millions)
(unaudited)

 
 
Q1 2014
 
Q2 2014
 
Q3 2014
 
Q4 2014
 
Q1 2015
 
Segments
 
 
 
 
 
 
 
 
 
 
North America Segment:
 
 
 
 
 
 
 
 
 
 
Gross Billings (1):
 
 
 
 
 
 
 
 
 
 
 
Local(2) Gross Billings
$
456,952

 
$
461,366

 
$
446,573

 
$
499,250

 
$
512,558

 
 
Goods Gross Billings
242,896

 
247,618

 
242,893

 
369,033

 
284,741

 
 
Travel Gross Billings
81,921

 
89,861

 
84,820

 
80,296

 
96,678

 
 
Total Gross Billings
$
781,769

 
$
798,845

 
$
774,286

 
$
948,579

 
$
893,977

 
 
Year-over-year growth
15

%
12

%
16

%
20

%
14

%
 
% Third Party and Other
70

%
70

%
69

%
62

%
69

%
 
% Direct
30

%
30

%
31

%
38

%
31

%
Gross Billings Trailing Twelve Months (TTM)
$
2,947,694

 
$
3,034,334

 
$
3,143,621

 
$
3,303,479

 
$
3,415,687

 
 
 
 
 
 
 
 
 
 
 
 
Revenue (3):
 
 
 
 
 
 
 
 
 
 
 
Local Revenue
$
177,247

 
$
164,500

 
$
161,912

 
$
170,946

 
$
180,864

 
 
Goods Revenue
237,435

 
241,626

 
238,955

 
362,863

 
279,029

 
 
Travel Revenue
16,380

 
17,805

 
17,627

 
17,165

 
19,989

 
 
Total Revenue
$
431,062

 
$
423,931

 
$
418,494

 
$
550,974

 
$
479,882

 
 
Year-over-year growth
27

%
12

%
16

%
24

%
11

%
 
% Third Party and Other
45

%
43

%
43

%
35

%
42

%
 
% Direct
55

%
57

%
57

%
65

%
58

%
Revenue TTM
$
1,612,866

 
$
1,659,615

 
$
1,717,271

 
$
1,824,461

 
$
1,873,281

 
 
 
 
 
 
 
 
 
 
 
 
Gross Profit (4):
 
 
 
 
 
 
 
 
 
 
 
Local Gross Profit
$
152,622

 
$
142,674

 
$
138,189

 
$
147,582

 
$
154,776

 
 
% of North America Local Gross Billings
33.4

%
30.9

%
30.9

%
29.6

%
30.2

%
 
Goods Gross Profit
12,604

 
22,961

 
23,953

 
34,404

 
23,923

 
 
% of North America Goods Gross Billings
5.2

%
9.3

%
9.9

%
9.3

%
8.4

%
 
Travel Gross Profit
14,442

 
14,365

 
14,000

 
14,187

 
15,791

 
 
% of North America Travel Gross Billings
17.6

%
16.0

%
16.5

%
17.7

%
16.3

%
 
Total Gross Profit
$
179,668

 
$
180,000

 
$
176,142

 
$
196,173

 
$
194,490

 
 
Year-over-year growth
4

%
(7
)
%
3

%
13

%
8

%
 
% Third Party and Other
94

%
88

%
87

%
83

%
88

%
 
% Direct
6

%
12

%
13

%
17

%
12

%
 
% of North America Total Gross Billings
23.0

%
22.5

%
22.7

%
20.7

%
21.8

%
 
 
 
 
 
 
 
 
 
 
 
EMEA Segment:
 
 
 
 
 
 
 
 
 
 
Gross Billings:
 
 
 
 
 
 
 
 
 
 
 
Local Gross Billings
$
262,141

 
$
227,266

 
$
218,615

 
$
242,119

 
$
217,598

 
 
Goods Gross Billings
183,013

 
190,957

 
191,006

 
245,712

 
176,526

 
 
Travel Gross Billings
68,434

 
65,032

 
79,802

 
72,710

 
65,065

 
 
Total Gross Billings
$
513,588

 
$
483,255

 
$
489,423

 
$
560,541

 
$
459,189

 
 
Year-over-year growth
4

%
—

%
10

%
(1
)
%
(11
)
%
 
Year-over-year growth, excluding FX (5)
1

%
(4
)
%
10

%
8

%
7

%
 
% Third Party and Other
83

%
80

%
78

%
74

%
77

%
 
% Direct
17

%
20

%
22

%
26

%
23

%
Gross Billings TTM
$
2,004,869

 
$
2,005,874

 
$
2,051,979

 
$
2,046,807

 
$
1,992,408

 
 
 
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
 
 
Local Revenue
$
109,120

 
$
96,485

 
$
90,002

 
$
95,572

 
$
82,536

 
 
Goods Revenue
106,889

 
115,413

 
123,110

 
160,582

 
118,967

 
 
Travel Revenue
14,884

 
15,792

 
16,960

 
16,321

 
14,717

 
 
Total Revenue
$
230,893

 
$
227,690

 
$
230,072

 
$
272,475

 
$
216,220

 
 
Year-over-year growth
26

%
42

%
56

%
8

%
(6
)
%
 
Year-over-year growth, excluding FX
22

%
36

%
55

%
18

%
13

%
 
% Third Party and Other
61

%
57

%
53

%
46

%
51

%
 
% Direct
39

%
43

%
47

%
54

%
49

%
Revenue TTM
$
790,010

 
$
857,738

 
$
939,860

 
$
961,130

 
$
946,457

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
 
Q1 2014
 
Q2 2014
 
Q3 2014
 
Q4 2014
 
Q1 2015
 
Gross Profit:
 
 
 
 
 
 
 
 
 
 
 
Local Gross Profit
$
100,066

 
$
90,373

 
$
83,956

 
$
90,150

 
$
77,356

 
 
% of EMEA Local Gross Billings
38.2

%
39.8

%
38.4

%
37.2

%
35.5

%
 
Goods Gross Profit
27,302

 
35,432

 
32,252

 
38,154

 
25,481

 
 
% of EMEA Goods Gross Billings
14.9

%
18.6

%
16.9

%
15.5

%
14.4

%
 
Travel Gross Profit
13,669

 
14,894

 
15,440

 
15,226

 
12,400

 
 
% of EMEA Travel Gross Billings
20.0

%
22.9

%
19.3

%
20.9

%
19.1

%
 
Total Gross Profit
$
141,037

 
$
140,699

 
$
131,648

 
$
143,530

 
$
115,237

 
 
Year-over-year growth
(8
)
%
1

%
6

%
(6
)
%
(18
)
%
 
% Third Party and Other
92

%
85

%
85

%
82

%
87

%
 
% Direct
8

%
15

%
15

%
18

%
13

%
 
% of EMEA Total Gross Billings
27.5

%
29.1

%
26.9

%
25.6

%
25.1

%
 
 
 
 
 
 
 
 
 
 
 
Rest of World Segment:
 
 
 
 
 
 
 
 
 
 
Gross Billings:
 
 
 
 
 
 
 
 
 
 
 
Local Gross Billings
$
112,660

 
$
112,741

 
$
120,269

 
$
105,420

 
$
99,735

 
 
Goods Gross Billings
79,523

 
73,876

 
70,615

 
77,816

 
66,154

 
 
Travel Gross Billings
33,166

 
33,393

 
35,754

 
32,313

 
32,946

 
 
Total Gross Billings
$
225,349

 
$
220,010

 
$
226,638

 
$
215,549

 
$
198,835

 
 
Year-over-year growth
(4
)
%
—

%
(3
)
%
(10
)
%
(12
)
%
 
Year-over-year growth, excluding FX
9

%
8

%
1

%
—

%
(1
)
%
 
% Third Party and Other
98

%
98

%
98

%
96

%
98

%
 
% Direct
2

%
2

%
2

%
4

%
2

%
Gross Billings TTM
$
917,704

 
$
918,363

 
$
910,670

 
$
887,546

 
$
861,032

 
 
 
 
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
 
 
 
 
Local Revenue
$
38,932

 
$
37,018

 
$
39,034

 
$
32,264

 
$
30,281

 
 
Goods Revenue
20,628

 
21,065

 
19,426

 
21,758

 
17,478

 
 
Travel Revenue
6,900

 
6,507

 
7,243

 
5,757

 
6,495

 
 
Total Revenue
$
66,460

 
$
64,590

 
$
65,703

 
$
59,779

 
$
54,254

 
 
Year-over-year growth
(15
)
%
(10
)
%
(24
)
%
(19
)
%
(18
)
%
 
Year-over-year growth, excluding FX
(2
)
%
(1
)
%
(20
)
%
(9
)
%
(8
)
%
 
% Third Party and Other
92

%
92

%
92

%
86

%
91

%
 
% Direct
8

%
8

%
8

%
14

%
9

%
Revenue TTM
$
297,792

 
$
290,779

 
$
270,211

 
$
256,532

 
$
244,326

 
 
 
 
 
 
 
 
 
 
 
 
 
Gross Profit:
 
 
 
 
 
 
 
 
 
 
 
Local Gross Profit
$
31,798

 
$
31,997

 
$
34,373

 
$
27,175

 
$
26,161

 
 
% of Rest of World Local Gross Billings
28.2

%
28.4

%
28.6

%
25.8

%
26.2

%
 
Goods Gross Profit
7,364

 
8,786

 
7,571

 
7,416

 
6,612

 
 
% of Rest of World Goods Gross Billings
9.3

%
11.9

%
10.7

%
9.5

%
10.0

%
 
Travel Gross Profit
5,645

 
4,928

 
5,544

 
3,815

 
4,906

 
 
% of Rest of World Travel Gross Billings
17.0

%
14.8

%
15.5

%
11.8

%
14.9

%
 
Total Gross Profit
$
44,807

 
$
45,711

 
$
47,488

 
$
38,406

 
$
37,679

 
 
Year-over-year growth
(15
)
%
(10
)
%
(26
)
%
(24
)
%
(16
)
%
 
% Third Party and Other
103

%
99

%
100

%
96

%
99

%
 
% Direct
(3
)
%
1

%
—

%
4

%
1

%
 
% of Rest of World Total Gross Billings
19.9

%
20.8

%
21.0

%
17.8

%
18.9

%
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Results of Operations:
 
 
 
 
 
 
 
 
 
 
Gross Billings:
 
 
 
 
 
 
 
 
 
 
 
Local Gross Billings
$
831,753

 
$
801,373

 
$
785,457

 
$
846,789

 
$
829,891

 
 
Goods Gross Billings
505,432

 
512,451

 
504,514

 
692,561

 
527,421

 
 
Travel Gross Billings
183,521

 
188,286

 
200,376

 
185,319

 
194,689

 
 
Total Gross Billings
$
1,520,706

 
$
1,502,110

 
$
1,490,347

 
$
1,724,669

 
$
1,552,001

 
 
Year-over-year growth
8

%
6

%
11

%
8

%
2

%
 
Year-over-year growth, excluding FX
9

%
6

%
12

%
13

%
10

%
 
% Third Party and Other
78

%
77

%
76

%
70

%
75

%
 
% Direct
22

%
23

%
24

%
30

%
25

%
Gross Billings TTM
$
5,870,267

 
$
5,958,571

 
$
6,106,270

 
$
6,237,832

 
$
6,269,127

 
 
Year-over-year growth
8

%
7

%
7

%
8

%
7

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
 
Q1 2014
 
Q2 2014
 
Q3 2014
 
Q4 2014
 
Q1 2015
 
Revenue:
 
 
 
 
 
 
 
 
 
 
 
Local Revenue
$
325,299

 
$
298,003

 
$
290,948

 
$
298,782

 
$
293,681

 
 
Goods Revenue
364,952

 
378,104

 
381,491

 
545,203

 
415,474

 
 
Travel Revenue
38,164

 
40,104

 
41,830

 
39,243

 
41,201

 
  Total Revenue
$
728,415

 
$
716,211

 
$
714,269

 
$
883,228

 
$
750,356

 
 
Year-over-year growth
21

%
18

%
20

%
15

%
3

%
 
Year-over-year growth, excluding FX
22

%
17

%
21

%
19

%
10

%
 
% Third Party and Other
55

%
52

%
51

%
42

%
48

%
 
% Direct
45

%
48

%
49

%
58

%
52

%
Revenue TTM
$
2,700,668

 
$
2,808,132

 
$
2,927,342

 
$
3,042,123

 
$
3,064,064

 
 
Year-over-year growth
14

%
16

%
20

%
18

%
13

%
 
 
 
 
 
 
 
 
 
 
 
 
Gross Profit:
 
 
 
 
 
 
 
 
 
 
 
Local Gross Profit
$
284,486

 
$
265,044

 
$
256,518

 
$
264,907

 
$
258,293

 
 
% of Consolidated Local Gross Billings
34.2

%
33.1

%
32.7

%
31.3

%
31.1

%
 
Goods Gross Profit
47,270

 
67,179

 
63,776

 
79,974

 
56,016

 
 
% of Consolidated Goods Gross Billings
9.4

%
13.1

%
12.6

%
11.5

%
10.6

%
 
Travel Gross Profit
33,756

 
34,187

 
34,984

 
33,228

 
33,097

 
 
% of Consolidated Travel Gross Billings
18.4

%
18.2

%
17.5

%
17.9

%
17.0

%
 
Total Gross Profit
$
365,512

 
$
366,410

 
$
355,278

 
$
378,109

 
$
347,406

 
 
Year-over-year growth
(4
)
%
(5
)
%
(1
)
%
—

%
(5
)
%
 
% Third Party and Other
94

%
88

%
88

%
84

%
89

%
 
% Direct
6

%
12

%
12

%
16

%
11

%
 
% of Total Consolidated Gross Billings
24.0

%
24.4

%
23.8

%
21.9

%
22.4

%
 
 
 
 
 
 
 
 
 
 
 
 
Marketing
$
69,185

 
$
57,699

 
$
55,258

 
$
59,812

 
$
52,533

 
Selling, general and administrative
$
300,906

 
$
305,740

 
$
299,275

 
$
285,472

 
$
289,847

 
Adjusted EBITDA
$
45,765

 
$
59,735

 
$
63,887

 
$
92,914

 
$
72,370

 
 
% of Total Consolidated Gross Billings
3.0

%
4.0

%
4.3

%
5.4

%
4.7

%
 
% of Total Consolidated Revenue
6.3

%
8.3

%
8.9

%
10.5

%
9.6

%





Groupon, Inc.
Supplemental Financial Information and Business Metrics (9)(10) 
(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 from continuing operations."
    
 
 
Q1 2014
 
Q2 2014
 
Q3 2014
 
Q4 2014
 
Q1 2015
 
 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by operating activities from continuing operations
$
(14,574
)
 
$
(28,525
)
 
$
22,324

 
$
273,272

 
$
40,711

Purchases of property and equipment and capitalized software from continuing operations
(16,093
)
 
(28,712
)
 
(18,638
)
 
(20,117
)
 
(18,294
)
Free cash flow
$
(30,667
)
 
$
(57,237
)
 
$
3,686

 
$
253,155

 
$
22,417

 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities from continuing operations (TTM)
$
195,098

 
$
123,271

 
$
157,500

 
$
252,497

 
$
307,782

Purchases of property and equipment and capitalized software from continuing operations (TTM)
(65,130
)
 
(79,800
)
 
(83,374
)
 
(83,560
)
 
(85,761
)
Free cash flow (TTM)
$
129,968

 
$
43,471

 
$
74,126

 
$
168,937

 
$
222,021

 
 
 
 
 
 
 
 
 
 
 
Net cash used in investing activities from continuing operations
$
(62,994
)
 
$
(32,157
)
 
$
(19,046
)
 
$
(35,175
)
 
$
(19,443
)
Net cash used in financing activities
$
(41,492
)
 
$
(114,753
)
 
$
(16,823
)
 
$
(21,088
)
 
$
(32,942
)
 
 
 
 
 
 
 
 
 
 
 
Net cash used in investing activities from continuing operations (TTM)
$
(128,630
)
 
$
(144,925
)
 
$
(137,527
)
 
$
(149,372
)
 
$
(105,821
)
Net cash used in financing activities (TTM)
$
(113,847
)
 
$
(220,659
)
 
$
(228,512
)
 
$
(194,156
)
 
$
(185,606
)
 
 
 
 
 
 
 
 
 
 
 
Other Metrics:
 
 
 
 
 
 
 
 
 
Active Customers (6)
 
 
 
 
 
 
 
 
 
 
North America
21.8

 
22.6

 
23.5

 
24.1

 
24.6

 
EMEA
14.5

 
14.5

 
14.9

 
15.2

 
15.3

 
Rest of World
8.7

 
8.8

 
8.2

 
8.1

 
8.2

 
Total Active Customers
45.0

 
45.9

 
46.6

 
47.4

 
48.1

 
 
 
 
 
 
 
 
 
 
 
TTM Gross Billings / Average Active Customer (7)
 
 
 
 
 
 
 
 
 
North America
$
147

 
$
145

 
$
145

 
$
147

 
$
147

EMEA
141

 
141

 
142

 
139

 
134

Rest of World
104

 
104

 
108

 
105

 
101

Consolidated
136

 
136

 
137

 
137

 
135


Global headcount as of March 31, 2015 and 2014 was as follows:
    
 
Q1 2014
 
Q1 2015
Sales (8)
4,715
 
4,429
% North America
30%
 
30%
% EMEA
41%
 
42%
% Rest of World
29%
 
28%
Other
6,503
 
6,386
Total Headcount
11,218
 
10,815

(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 include advertising, payment processing, point of sale and commission revenue.
(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)
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 from continuing operations.
(9)
Financial information and other metrics have been retrospectively adjusted to exclude Ticket Monster, which has been classified as discontinued operations.




(10)
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.