10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

                For the transition period from _______ to _______    

Commission File Number: 1-35335

Groupon, Inc.
(Exact name of registrant as specified in its charter)
Delaware	27-0903295
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
600 W Chicago Avenue	60654
Suite 400	(Zip Code)
Chicago
Illinois	(312)	334-1579
(Address of principal executive offices)	(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	GRPN	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  ☒         No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).        

Yes  ☒        No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒                            Accelerated filer ☐         

Non-accelerated filer ☐                            Smaller reporting company ☐

                                        Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐        No  ☒ 

As of November 2, 2020, there were 28,812,655 shares of the registrant's common stock outstanding.

TABLE OF CONTENTS

PART I. Financial Information	Page
Forward-Looking Statements	3
Item 1. Financial Statements and Supplementary Data	4
Condensed Consolidated Balance Sheets as of September 30, 2020 (unaudited) and December 31, 2019	4
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2020 and 2019 (unaudited)	5
Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2020 and 2019 (unaudited)	6
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019 (unaudited)	8
Notes to Condensed Consolidated Financial Statements (unaudited)	10
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3. Quantitative and Qualitative Disclosures about Market Risk	59
Item 4. Controls and Procedures	60
PART II. Other Information
Item 1. Legal Proceedings	61
Item 1A. Risk Factors	62
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 5. Other Information	63
Item 6. Exhibits	64
Signatures	65

______________________________________________________

2

PART I. FINANCIAL INFORMATION

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations. The words "may," "will," "should," "could," "expect," "anticipate," "believe," "estimate," "intend," "continue" and other similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, but are not limited to, our ability to execute, and achieve the expected benefits of our go-forward strategy, execution of the phase down of the Goods category and transition to a third-party marketplace model; volatility in our operating results; effects of pandemics or disease outbreaks, including COVID-19, on our business; execution of our business and marketing strategies; retaining existing customers and adding new customers; challenges arising from our international operations, including fluctuations in currency exchange rates, legal and regulatory developments and any potential adverse impact from the United Kingdom's exit from the European Union; retaining and adding high quality merchants; our reliance on email, internet search engines and mobile application marketplaces to drive traffic to our marketplace; cybersecurity breaches; reliance on cloud-based computing platforms; competing successfully in our industry; providing a strong mobile experience for our customers; maintaining and improving our information technology infrastructure; our voucherless offerings; claims related to product and service offerings; managing inventory and order fulfillment risks; litigation; managing refund risks; retaining and attracting members of our executive team and other qualified personnel; completing and realizing the anticipated benefits from acquisitions, dispositions, joint ventures and strategic investments; lack of control over minority investments; compliance with domestic and foreign laws and regulations, including the CARD Act, GDPR and regulation of the Internet and e-commerce; classification of our independent contractors or employees; tax liabilities; tax legislation; protecting our intellectual property; maintaining a strong brand; customer and merchant fraud; payment-related risks; our ability to raise capital if necessary and our outstanding indebtedness; global economic uncertainty; our common stock, including volatility in our stock price; our convertible senior notes; our ability to realize the anticipated benefits from the hedge and warrant transactions; and those risks and other factors discussed in Part I, Item 1A, Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2019, Part II, Item 1A. Risk Factors of our Quarterly Reports on Form 10-Q, for the three months ended March 31, 2020 and June 30, 2020, as well as in our condensed consolidated financial statements, related notes, and the other financial information appearing elsewhere in this report and our other filings with the Securities and Exchange Commission (the "SEC"). Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. We do not intend, and undertake no obligation, to update any of our forward-looking statements after the date of this report to reflect actual results or future events or circumstances. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

As used herein, "Groupon," "the Company," "we," "our," "us" and similar terms include Groupon, Inc. and its subsidiaries, unless the context indicates otherwise.

3

ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

GROUPON, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

	September 30, 2020		December 31, 2019
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	778,967	$	750,887
Accounts receivable, net	45,451		54,953
Prepaid expenses and other current assets	51,958		82,073
Total current assets	876,376		887,913
Property, equipment and software, net	88,488		124,950
Right-of-use assets - operating leases, net	79,008		108,390
Goodwill	213,009		325,017
Intangible assets, net	30,965		35,292
Investments	35,911		76,576
Other non-current assets	26,061		28,605
Total Assets	$	1,349,818	$	1,586,743
Liabilities and Equity
Current liabilities:
Short-term borrowings	$	200,000	$	—
Accounts payable	42,210		20,415
Accrued merchant and supplier payables	381,856		540,940
Accrued expenses and other current liabilities	257,298		260,192
Total current liabilities	881,364		821,547
Convertible senior notes, net	225,693		214,869
Operating lease obligations	94,142		110,294
Other non-current liabilities	50,096		44,987
Total Liabilities	1,251,295		1,191,697
Commitments and contingencies (see Note 6)
Stockholders' Equity
Common stock, par value $0.0001 per share, 100,500,000 shares authorized; 39,084,960 shares issued and 28,790,843 shares outstanding at September 30, 2020; 38,584,854 shares issued and 28,290,737 shares outstanding at December 31, 2019 (1)	4		4
Additional paid-in capital (1)	2,338,432		2,310,393
Treasury stock, at cost, 10,294,117 and 10,294,117 shares at September 30, 2020 and December 31, 2019 (1)	(922,666)		(922,666)
Accumulated deficit	(1,334,864)		(1,032,876)
Accumulated other comprehensive income (loss)	17,702		39,081
Total Groupon, Inc. Stockholders' Equity	98,608		393,936
Noncontrolling interests	(85)		1,110
Total Equity	98,523		395,046
Total Liabilities and Equity	$	1,349,818	$	1,586,743

(1)Prior period share information and balances have been retroactively adjusted to reflect a reverse stock split. See Note 7, Stockholders' Equity and Compensation Arrangements for additional information.

See Notes to Condensed Consolidated Financial Statements.

4

GROUPON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except share and per share amounts)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Revenue:
Service	$	155,073	$	268,080	$	474,478	$	831,510
Product	148,946		227,532		599,337		775,089
Total revenue	304,019		495,612		1,073,815		1,606,599
Cost of revenue:
Service	17,005		28,947		60,162		86,169
Product	126,992		188,725		515,158		644,342
Total cost of revenue	143,997		217,672		575,320		730,511
Gross profit	160,022		277,940		498,495		876,088
Operating expenses:
Marketing	31,386		74,976		116,758		257,296
Selling, general and administrative	124,257		198,388		475,017		619,274
Goodwill impairment	—		—		109,486		—
Long-lived asset impairment	—		—		22,351		—
Restructuring and related charges	20,559		(61)		61,037		(175)
Total operating expenses	176,202		273,303		784,649		876,395
Income (loss) from operations	(16,180)		4,637		(286,154)		(307)
Other income (expense), net	(867)		(17,253)		(21,549)		(92,602)
Income (loss) from continuing operations before provision (benefit) for income taxes	(17,047)		(12,616)		(307,703)		(92,909)
Provision (benefit) for income taxes	(486)		2,069		(7,170)		591
Income (loss) from continuing operations	(16,561)		(14,685)		(300,533)		(93,500)
Income (loss) from discontinued operations, net of tax	—		—		382		2,162
Net income (loss)	(16,561)		(14,685)		(300,151)		(91,338)
Net (income) loss attributable to noncontrolling interests	291		(2,000)		(1,758)		(8,080)
Net income (loss) attributable to Groupon, Inc.	$	(16,270)	$	(16,685)	$	(301,909)	$	(99,418)
Basic and diluted net income (loss) per share: (1)
Continuing operations	$	(0.57)	$	(0.59)	$	(10.59)	$	(3.57)
Discontinued operations	—		—		0.01		0.08
Basic and diluted net income (loss) per share	$	(0.57)	$	(0.59)	$	(10.58)	$	(3.49)
Weighted average number of shares outstanding (1)
Basic	28,751,520		28,348,561		28,535,393		28,416,966
Diluted	28,751,520		28,348,561		28,535,393		28,416,966
Comprehensive income (loss):
Net income (loss)	$	(16,561)	$	(14,685)	$	(300,151)	$	(91,338)
Other comprehensive income (loss):
Other comprehensive income (loss) from continuing operations:
Net change in unrealized gain (loss) on foreign currency translation adjustments	(11,786)		4,439		(21,379)		4,426
Net change in unrealized gain (loss) on available-for-sale securities (net of tax effect of $0 and $(16) for the three months ended September 30, 2020 and 2019 and $0 and $(51) for the nine months ended September 30, 2020 and 2019)	—		(47)		—		(151)
Other comprehensive income (loss) from continuing operations	(11,786)		4,392		(21,379)		4,275
Other comprehensive income (loss) from discontinued operations	—		—		—		—
Other comprehensive income (loss)	(11,786)		4,392		(21,379)		4,275
Comprehensive income (loss)	(28,347)		(10,293)		(321,530)		(87,063)
Comprehensive (income) loss attributable to noncontrolling interest	291		(2,000)		(1,758)		(8,080)
Comprehensive income (loss) attributable to Groupon, Inc.	$	(28,056)	$	(12,293)	$	(323,288)	$	(95,143)

(1)All share and per share information has been retroactively adjusted to reflect a reverse stock split. See Note 7, Stockholders' Equity and Compensation Arrangements for additional information.

See Notes to Condensed Consolidated Financial Statements.

5

GROUPON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands, except share amounts)

(unaudited)

	Groupon, Inc. Stockholders' Equity
	Common Stock (1)			Additional Paid-In Capital (1)		Treasury Stock (1)			Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Groupon, Inc. Stockholders' Equity		Non-controlling Interests		Total Equity
	Shares	Amount				Shares	Amount
Balance at December 31, 2019	38,584,854	$	4	$	2,310,393	(10,294,117)	$	(922,666)	$	(1,032,876)	$	39,081	$	393,936	$	1,110	$	395,046
Cumulative effect of change in accounting principle, net of tax	—	—		—		—	—		(79)		—		(79)		—		(79)
Comprehensive income (loss)	—	—		—		—	—		(213,522)		(1,961)		(215,483)		3,044		(212,439)
Vesting of restricted stock units and performance share units	165,705	—		—		—	—		—		—		—		—		—
Shares issued under employee stock purchase plan	28,621	—		1,163		—	—		—		—		1,163		—		1,163
Tax withholdings related to net share settlements of stock-based compensation awards	(67,135)	—		(3,684)		—	—		—		—		(3,684)		—		(3,684)
Stock-based compensation on equity-classified awards	—	—		15,345		—	—		—		—		15,345		—		15,345
Distributions to noncontrolling interest holders	—	—		—		—	—		—		—		—		(3,845)		(3,845)
Balance at March 31, 2020	38,712,045	$	4	$	2,323,217	(10,294,117)	$	(922,666)	$	(1,246,477)	$	37,120	$	191,198	$	309	$	191,507
Comprehensive income (loss)	—	—		—		—	—		(72,117)		(7,632)		(79,749)		(995)		(80,744)
Vesting of restricted stock units and performance share units	430,100	—		—		—	—		—		—		—		—		—
Shares issued under employee stock purchase plan	—	—		—		—	—		—		—		—		—		—
Tax withholdings related to net share settlements of stock-based compensation awards	(164,468)	—		(4,554)		—	—		—		—		(4,554)		—		(4,554)
Stock-based compensation on equity-classified awards	—	—		10,936			—		—		—		10,936		—		10,936
Receipts from noncontrolling interest holders	—	—		—		—	—		—		—		—		339		339
Balance at June 30, 2020	38,977,677	$	4	$	2,329,599	(10,294,117)	$	(922,666)	$	(1,318,594)	$	29,488	$	117,831	$	(347)	$	117,484
Comprehensive income (loss)	—	—		—		—	—		(16,270)		(11,786)		(28,056)		(291)		(28,347)
Vesting of restricted stock units and performance share units	104,819	—		—		—	—		—		—		—		—		—
Shares issued under employee stock purchase plan	40,750	—		628		—	—		—		—		628		—		628
Tax withholdings related to net share settlements of stock-based compensation awards	(38,286)	—		(1,016)		—	—		—		—		(1,016)		—		(1,016)
Stock-based compensation on equity-classified awards	—	—		9,221		—	—		—		—		9,221		—		9,221
Receipts from noncontrolling interest holders	—	—		—		—	—		—		—		—		553		553
Balance at September 30, 2020	39,084,960	$	4	$	2,338,432	(10,294,117)	$	(922,666)	$	(1,334,864)	$	17,702	$	98,608	$	(85)	$	98,523

(1)All share information and balances have been retroactively adjusted to reflect a reverse stock split. See Note 7, Stockholders' Equity and Compensation Arrangements, for additional information.

See Notes to Condensed Consolidated Financial Statements.

6

GROUPON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands, except share amounts)

(unaudited)

	Groupon, Inc. Stockholders' Equity
	Common Stock (1)			Additional Paid-In Capital (1)		Treasury Stock (1)			Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Groupon, Inc. Stockholders' Equity		Non-controlling Interests		Total Equity
	Shares	Amount				Shares	Amount
Balance at December 31, 2018	38,046,972	$	4	$	2,234,633	(9,592,756)	$	(877,491)	$	(1,010,499)	$	34,602	$	381,249	$	1,363	$	382,612
Comprehensive income (loss)	—	—		—		—	—		(42,487)		3,313		(39,174)		3,479		(35,695)
Exercise of stock options	625	—		8		—	—		—		—		8		—		8
Vesting of restricted stock units and performance share units	208,020	—		—		—	—		—		—		—		—		—
Shares issued under employee stock purchase plan	35,964	—		1,998		—	—		—		—		1,998		—		1,998
Tax withholdings related to net share settlements of stock-based compensation awards	(79,286)	—		(5,681)		—	—		—		—		(5,681)		—		(5,681)
Payments for repurchases of common stock	—	—		—		(220,399)	(15,055)		—		—		(15,055)				(15,055)
Stock-based compensation on equity-classified awards	—	—		17,731		—	—		—		—		17,731		—		17,731
Distributions to noncontrolling interest holders	—	—		—		—	—		—		—		—		(3,521)		(3,521)
Balance at March 31, 2019	38,212,295	4		$	2,248,689	(9,813,155)	$	(892,546)	$	(1,052,986)	$	37,915	$	341,076	$	1,321	$	342,397
Comprehensive income (loss)	—	—		—		—	—		(40,246)		(3,430)		(43,676)		2,601		(41,075)
Exercise of stock options	1,500	—		32		—	—		—		—		32		—		32
Vesting of restricted stock units and performance share units	220,211	—		—		—	—		—		—		—		—		—
Shares issued under employee stock purchase plan	—	—		—		—	—		—		—		—		—		—
Tax withholdings related to net share settlements of stock-based compensation awards	(76,220)	—		(5,387)		—	—		—		—		(5,387)		—		(5,387)
Payments for repurchases of common stock	—	—		—		(211,407)	(15,053)		—		—		(15,053)		—		(15,053)
Stock-based compensation on equity-classified awards	—	—		28,339		—	—		—		—		28,339		—		28,339
Distributions to noncontrolling interest holders	—	—		—		—	—		—		—		—		(3,113)		(3,113)
Balance at June 30, 2019	38,357,786	$	4	$	2,271,673	(10,024,562)	$	(907,599)	$	(1,093,232)	$	34,485	$	305,331	$	809	$	306,140
Comprehensive income (loss)	—	—		—		—	—		(16,685)		4,392		(12,293)		2,000		(10,293)
Vesting of restricted stock units and performance share units	99,306	—				—	—		—		—				—		—
Shares issued under employee stock purchase plan	38,335	—		2,085		—	—		—		—		2,085		—		2,085
Tax withholdings related to net share settlements of stock-based compensation awards	(36,663)	—		(2,049)		—	—		—		—		(2,049)		—		(2,049)
Repurchases of common stock	—	—		—		(269,554)	(15,067)						(15,067)		—		(15,067)
Stock-based compensation on equity-classified awards	—	—		22,364		—	—		—		—		22,364		—		22,364
Distributions to noncontrolling interest holders	—	—		—		—	—		—		—		—		(2,053)		(2,053)
Balance at September 30, 2019	38,458,764	$	4	$	2,294,073	(10,294,116)	$	(922,666)	$	(1,109,917)	$	38,877	$	300,371	$	756	$	301,127

(1)All share information and balances have been retroactively adjusted to reflect a reverse stock split. See Note 7, Stockholders' Equity and Compensation Arrangements, for additional information.

See Notes to Condensed Consolidated Financial Statements.

7

GROUPON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended September 30,
	2020		2019
Operating activities
Net income (loss)	$	(300,151)	$	(91,338)
Less: Income (loss) from discontinued operations, net of tax	382		2,162
Income (loss) from continuing operations	(300,533)		(93,500)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property, equipment and software	60,988		69,986
Amortization of acquired intangible assets	7,378		11,419
Impairment of goodwill	109,486		—
Impairment of long-lived assets	22,351		—
Restructuring-related impairment	17,199		—
Stock-based compensation	30,937		62,517
Impairment of investment	6,684		—
Deferred income taxes	—		816
(Gain) loss from changes in fair value of investments	1,405		68,971
Amortization of debt discount on convertible senior notes	10,824		9,772
Change in assets and liabilities, net of acquisitions and dispositions:
Accounts receivable	9,602		12,581
Prepaid expenses and other current assets	29,098		2,591
Right-of-use assets - operating leases	17,680		19,624
Accounts payable	20,733		(16,892)
Accrued merchant and supplier payables	(163,125)		(216,127)
Accrued expenses and other current liabilities	2,496		(63,392)
Operating lease obligations	(29,709)		(18,960)
Other, net	2,002		20,476
Net cash provided by (used in) operating activities from continuing operations	(144,504)		(130,118)
Net cash provided by (used in) operating activities from discontinued operations	—		—
Net cash provided by (used in) operating activities	(144,504)		(130,118)
Investing activities
Purchases of property and equipment and capitalized software	(36,662)		(51,854)
Proceeds from sale of investment	31,605		—
Acquisitions of intangible assets and other investing activities	(3,416)		(3,037)
Net cash provided by (used in) investing activities from continuing operations	(8,473)		(54,891)
Net cash provided by (used in) investing activities from discontinued operations	1,224		—
Net cash provided by (used in) investing activities	(7,249)		(54,891)
Financing activities
Proceeds from borrowings under revolving credit agreement	200,000		—
Payment of contingent consideration related to acquisition	(908)		—
Issuance costs for revolving credit agreement	(1,148)		(2,384)
Payments for repurchases of common stock	—		(44,162)
Taxes paid related to net share settlements of stock-based compensation awards	(8,787)		(13,975)
Proceeds from stock option exercises and employee stock purchase plan	1,791		4,123
Distributions to noncontrolling interest holders	(2,953)		(8,687)
Payments of finance lease obligations	(7,438)		(16,868)
Net cash provided by (used in) financing activities	180,557		(81,953)
Effect of exchange rate changes on cash, cash equivalents and restricted cash, including cash classified within current assets of discontinued operations	(716)		(9,153)
Net increase (decrease) in cash, cash equivalents and restricted cash, including cash classified within current assets of discontinued operations	28,088		(276,115)
Less: Net increase (decrease) in cash classified within current assets of discontinued operations	1,224		—
Net increase (decrease) in cash, cash equivalents and restricted cash	26,864		(276,115)
Cash, cash equivalents and restricted cash, beginning of period (1)	752,657		844,728
Cash, cash equivalents and restricted cash, end of period (1)	$	779,521	$	568,613

8

GROUPON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

Non-cash investing and financing activities
Continuing operations:
Equipment acquired under finance lease arrangements	$	—	$	3,865
Liability for repurchases of common stock	—		(1,469)
Increase (decrease) in liabilities related to purchases of property and equipment and capitalized software	261		(201)

(1)The following table provides a reconciliation of cash, cash equivalents and restricted cash shown above to amounts reported within the condensed consolidated balance sheets as of September 30, 2020, December 31, 2019 and December 31, 2018 and amounts previously reported within the condensed consolidated balance sheet in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019 (in thousands):

	September 30, 2020		December 31, 2019		September 30, 2019		December 31, 2018
Cash and cash equivalents	$	778,967	$	750,887	$	567,285	$	841,021
Restricted cash included in prepaid expenses and other current assets	315		1,534		1,101		3,320
Restricted cash included in other non-current assets	239		236		227		387
Cash, cash equivalents and restricted cash	$	779,521	$	752,657	$	568,613	$	844,728

See Notes to Condensed Consolidated Financial Statements.

9

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Company Information

Groupon, Inc. and its subsidiaries, which commenced operations in October 2008, is a global scaled two-sided marketplace that connect merchants to consumers by offering goods and services, generally at a discount. Customers access those marketplaces through our mobile applications and our websites, primarily localized groupon.com sites in many countries.

Our operations are organized into two segments: North America and International. See Note 13, Segment Information.

Reverse Stock Split

On June 10, 2020, we effectuated a reverse stock split of our common stock at a ratio of 1-for-20. See Note 7, Stockholders' Equity and Compensation Arrangements, for additional information. As a result, the number of shares and income (loss) per share disclosed throughout this Quarterly Report on Form 10-Q have been retrospectively adjusted to reflect the reverse stock split.

COVID-19 Pandemic

Since March 2020, the COVID-19 pandemic has led to significant disruption in our business as a result of the preventive and protective actions, such as consumer restrictions and merchant closures that governments, our merchants and consumers have implemented in response to the pandemic. The COVID-19 pandemic has had an adverse impact on our financial condition, results of operations and cash flows. The negative impact of COVID-19 on our business is expected to continue at least as long as our performance is impacted by market conditions as we rely on customers' purchases of vouchers for local experiences, including events and activities, beauty and wellness, travel and dining. We continue to monitor the impact of COVID-19 on our business, including increases in government restrictions and the potential for colder weather in certain North America and International markets to further exacerbate negative trends.

In light of the impact of COVID-19 on our business, we expect a net loss and negative operating cash flows for the year ending December 31, 2020. We plan to continue to actively manage and optimize our cash balances and liquidity, working capital and operating expenses, although there can be no assurances that we will be able to do so. We have taken several steps to reduce costs, preserve cash in the near-term and improve liquidity, including, but not limited to: reducing our workforce and furloughing staff; continuing to sell Goods on our platform instead of quickly exiting the category; reducing marketing expense by significantly shortening payback thresholds and delaying brand marketing investments; transitioning merchants to redemption payment terms, instead of fixed payment terms; implementing a hiring freeze; eliminating broad-based merit increases for employees; replacing cash compensation with equity compensation in 2020 for all members of our Board of Directors (the "Board"); and amending our Credit Agreement (as defined below) to, among other things, provide covenant relief through the first quarter of 2021. The future impact of COVID-19 on our business, results of operations, financial condition and liquidity is highly uncertain and will ultimately depend on future developments, including the magnitude and duration of the pandemic and the protective measures associated with reducing its spread.

In the first quarter 2020, we determined the significant deterioration in our financial performance due to the disruption in our operations from COVID-19 and the sustained decrease in our stock price required us to evaluate our long-lived assets and goodwill for impairment, which resulted in the impairment of our long-lived assets and goodwill. See Note 2, Goodwill and Long-Lived Assets. Additionally, the economic impacts of COVID-19 resulted in an impairment or a reduction in the fair value of certain of our investments during the first quarter 2020. See Note 3, Investments.

In April 2020, the Board approved multi-phase restructuring actions relating to our previously announced strategic shift and as part of the cost reduction measures we are implementing in response to the impact of

10

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

COVID-19. We expect to incur total pre-tax charges of $75.0 million to $105.0 million in connection with these multi-phase restructuring actions through the end of 2021. See Note 9, Restructuring and Related Charges, for additional information about restructuring charges incurred during the nine months ended September 30, 2020, which included employee severance and compensation benefits expenses, facilities-related costs and impairment charges, professional advisory fees and a rationalization of our country footprint.

Unaudited Interim Financial Information

We have prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the SEC for interim financial reporting. These condensed consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations and comprehensive income (loss), cash flows and stockholders' equity for the periods presented. These condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2019.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Groupon, Inc. and its wholly-owned subsidiaries, majority-owned subsidiaries over which we exercise control and variable interest entities for which we are the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation. Outside stockholders' interests in subsidiaries are shown on the condensed consolidated financial statements as Noncontrolling interests.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Estimates in our financial statements include, but are not limited to, the following: variable consideration from unredeemed vouchers, income taxes, leases, initial valuation and subsequent impairment testing of goodwill, other intangible assets and long-lived assets, investments, receivables, customer refunds and other reserves, contingent liabilities, and the useful lives of property, equipment and software and intangible assets. Actual results could differ materially from those estimates.

Reclassifications

Certain reclassifications have been made to the condensed consolidated financial statements of prior periods to conform to the current period presentation.

Adoption of New Accounting Standards

We adopted the guidance in ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses of Financial Instruments ("CECL") on January 1, 2020. This ASU requires entities to measure credit losses for financial assets measured at amortized cost based on expected losses over the lifetime of the asset rather than incurred losses. The adoption of ASU 2016-13 did not have a material impact on the condensed consolidated financial statements. See Note 8, Revenue Recognition, for additional information.

We adopted the guidance in ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment on January 1, 2020. This ASU eliminates Step 2 of the goodwill impairment test and requires a goodwill impairment to be measured as the amount by which a reporting unit's carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. During the first quarter 2020, we determined a triggering event occurred that required us to evaluate our goodwill for impairment, and we recorded an impairment charge as a result of that assessment. See Note 2, Goodwill and Long-Lived Assets, for additional information.

11

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

We adopted the guidance in ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement on January 1, 2020. This ASU modifies the disclosure requirements in Topic 820, Fair Value Measurements, by removing, modifying, or adding certain disclosures. The adoption of ASU 2018-13 did not have a material impact on the condensed consolidated financial statements.

2. GOODWILL AND LONG-LIVED ASSETS

In accordance with ASC Topic 350, Intangibles — Goodwill and Other, we evaluate goodwill for impairment annually on October 1 or more frequently when an event occurs or circumstances change that indicates the carrying value may not be recoverable. We also review our long-lived assets, such as property, equipment and software, right-of-use assets and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. During the first quarter 2020, we determined the significant deterioration in our financial performance due to the disruption in our operations from COVID-19 and the sustained decrease in our stock price required us to evaluate our goodwill and long-lived assets for impairment. During the second and third quarters 2020, we determined that the actions taken under our restructuring plan changed how we used certain long-lived assets such that the carrying amount of those long-lived assets may not be recoverable, which required us to evaluate those long-lived assets for impairment.

Future events and changing market conditions due to the impact of COVID-19 may require us to re-evaluate the estimates used in our fair value measurements, which could result in additional impairment of long-lived assets or goodwill in future periods that may have a material effect on our operating results.

Goodwill

In order to evaluate goodwill for impairment in the first quarter 2020, we compared the fair values of our three reporting units (North America, EMEA and Asia Pacific) to their carrying values. In determining fair values for our reporting units, we used the discounted cash flow method and the market multiple valuation approach that use Level 3 inputs. The significant estimates used in the discounted cash flow models are the risk-adjusted discount rates; forecasted revenue, cost of revenue and operating expenses; forecasted capital expenditures and working capital needs; weighted average cost of capital; rates of long-term growth; and income tax rates. These estimates considered the recent deterioration in financial performance of the reporting units as well as the anticipated rate of recovery, and implied risk premiums based on the market prices of our equity and debt as of the assessment date. The significant estimates used in the market multiple valuation approach include identifying business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and earnings multiples. As a result of the interim quantitative assessment of goodwill in the first quarter 2020, we identified a partial impairment of goodwill in our EMEA reporting unit within the International segment and recognized goodwill impairment of $109.5 million. We did not recognize any goodwill impairment in our North America or Asia Pacific reporting units during the three months ended March 31, 2020.

During the second quarter 2020, we determined that we did not have a triggering event that required us to evaluate goodwill for impairment, and therefore we did not recognize goodwill impairment for any of our reporting units during the second quarter 2020.

During the third quarter 2020, we exited our operations in Japan and New Zealand, which represent the majority of the countries in our Asia Pacific reporting unit. As a result, we combined the remainder of the Asia Pacific reporting unit and the EMEA reporting unit into a single International reporting unit, consistent with how management reviews the operating results of the business. As a result of the change in reporting units, we performed a qualitative assessment of potential goodwill impairment for the new International reporting unit and performed separate qualitative assessments of potential goodwill impairment for our Asia Pacific and EMEA reporting units immediately prior to the change. Based on those assessments, which considered current market conditions and recent business performance, we determined that the likelihood of a goodwill impairment did not reach the more-likely-than not threshold. Accordingly, we concluded that goodwill relating to those reporting units was not impaired and further quantitative testing was not required to be performed. We did not identify any other triggering events that required us to evaluate goodwill impairment in our North America or International reporting units during the third quarter 2020 and therefore did not recognize goodwill impairment for any of our reporting units during the third quarter 2020.

12

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The following table summarizes goodwill activity by segment for the nine months ended September 30, 2020 (in thousands):

	North America		International (1)		Consolidated
Balance as of December 31, 2019	$	178,685	$	146,332	$	325,017
Impairment loss	—		(109,486)		(109,486)
Foreign currency translation	—		(2,522)		(2,522)
Balance as of September 30, 2020	$	178,685	$	34,324	$	213,009

(1)As of September 30, 2020, the International reporting unit had a negative carrying value.

Long-Lived Assets

Following our review of long-lived assets for impairment in the first quarter 2020, we recognized long-lived asset impairment of $22.4 million within our International segment related to our EMEA operations.

During the second quarter 2020, we recognized long-lived asset impairments of $13.5 million and $0.4 million within our North America and International segments for certain asset groups due to actions taken under our restructuring plan. During the third quarter 2020, we recognized long-lived asset impairments of $0.8 million and $2.5 million within our North America and International segments for certain asset groups due to actions taken under our restructuring plan. See Note 9, Restructuring and Related Charges, for more information.

13

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The assets that we deemed impaired were written down to fair value based on the discounted cash flow method that uses Level 3 inputs. The significant estimates used in the discounted cash flow models are the risk-adjusted discount rates; forecasted revenue, cost of revenue and operating expenses; forecasted capital expenditures and working capital needs; weighted average cost of capital; rates of long-term growth; and income tax rates.

Impairment charges are presented within the following line items of the condensed consolidated statements of operations for the three and nine months ended September 30, 2020 (in thousands):

	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
Long-lived asset impairment	$	—	$	22,351
Restructuring and related charges	3,296		17,199
Total impairment	$	3,296	$	39,550

The following table summarizes impairment for long-lived assets and restructuring and related charges by asset type through September 30, 2020 (in thousands):

Long-Lived Asset Category	Impairment
Property, equipment and software, net
Furniture and fixtures	$	413
Leasehold improvements (1)	7,749
Office equipment	198
Purchased software	14
Computer hardware	2,842
Right-of-use assets - finance leases, net	1,388
Capitalized software	304
Internally-developed software	2,988
Total Property, equipment and software, net	$	15,896
Right-of-use assets - operating leases, net (2)	22,680
Intangible assets, net	103
Other non-current assets	871
Total long-lived assets	$	39,550

(1)Includes long-lived asset impairment of $5.0 million presented within Restructuring and related charges during the nine months ended September 30, 2020. See Note 9, Restructuring and Related Charges, for more information.

(2)Includes right-of-use asset impairment of $12.2 million during the nine months ended September 30, 2020. See Note 9, Restructuring and Related Charges, for more information.

The following table summarizes intangible assets as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020						December 31, 2019
Intangible Asset Category	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships	$	16,200	$	16,200	$	—	$	16,200	$	16,200	$	—
Merchant relationships	21,668		10,557		11,111		22,193		8,268		13,925
Trade names	9,491		7,771		1,720		9,558		7,369		2,189
Developed technology	2,319		1,906		413		3,651		2,685		966
Patents	25,809		19,850		5,959		23,021		18,167		4,854
Other intangible assets	26,736		14,974		11,762		26,115		12,757		13,358
Total	$	102,223	$	71,258	$	30,965	$	100,738	$	65,446	$	35,292

14

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Amortization of intangible assets is computed using the straight-line method over their estimated useful lives, which range from 1 to 10 years. Amortization expense related to intangible assets was $2.5 million and $3.7 million for the three months ended September 30, 2020 and 2019 and $7.4 million and $11.4 million for the nine months ended September 30, 2020 and 2019. As of September 30, 2020, estimated future amortization expense related to intangible assets is as follows (in thousands):

Remaining amounts in 2020	$	2,312
2021	8,173
2022	7,577
2023	6,426
2024	2,840
Thereafter	3,637
Total	$	30,965

3. INVESTMENTS

The following table summarizes investments as of September 30, 2020 and December 31, 2019 (dollars in thousands):

	September 30, 2020		Percent Ownership of Voting Stock			December 31, 2019		Percent Ownership of Voting Stock
Available-for-sale securities - redeemable preferred shares	$	—	19%	to	25%	$	—	19%	to	25%
Fair value option investments	—		10%	to	19%	1,405		10%	to	19%
Other equity investments	35,911		1%	to	19%	75,171		1%	to	19%
Total investments	$	35,911				$	76,576

Fair Value Option Investments    

In connection with the dispositions of controlling stakes in TMON Inc. ("TMON"), an entity based in the Republic of Korea and Groupon India in prior periods, we obtained minority investments in Monster Holdings LP ("Monster LP") and in Nearbuy Pte Ltd. ("Nearbuy"). We have made an irrevocable election to account for both of those investments at fair value with changes in fair value reported in earnings. We elected to apply fair value accounting to those investments because we believe that fair value is the most relevant measurement attribute for those investments, as well as to reduce operational and accounting complexity. Our election to apply fair value accounting to those investments has and may continue to cause fluctuations in our earnings from period to period.

There were no material changes in fair value of those investments for the three months ended September 30, 2020 and 2019. The following table summarizes gains and losses due to changes in fair value of those investments for the nine months ended September 30, 2020 and 2019 (in thousands):

	Nine Months Ended September 30,
	2020		2019
Monster LP	$	—	$	(69,408)
Nearbuy	(1,405)		437
Total	$	(1,405)	$	(68,971)

We determined that the fair value of our investment in Nearbuy was $0.0 million as of September 30, 2020 and $1.4 million as of December 31, 2019. During the first quarter 2020, we recognized a $1.4 million loss from changes in the fair value of our investment in Nearbuy due to revised cash flow projections and an increase in the discount rate applied to those forecasts, which increased to 30% as of March 31, 2020, as compared with 20% as of December 31, 2019. The revisions to the financial projections and the increase in the discount rate applied as of March 31, 2020 were due to the deterioration in the financial condition of Nearbuy as a result of COVID-19, which resulted in underperformance as compared with prior projections and an increase to financial projection risk.

15

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

We determined that the fair value of our investment in Monster LP was $0.0 million as of September 30, 2020 and December 31, 2019. During the first quarter 2019, we recognized a $41.5 million loss from changes in the fair value of our investment in Monster LP due to the revised cash flow projections provided by TMON in March 2019 and an increase in the discount rate applied to those forecasts, which increased to 26.0% as of March 31, 2019, as compared with 21.0% as of December 31, 2018. The increase in the discount rate applied as of March 31, 2019 was due to the deterioration in the financial condition of TMON and the competitive environment in the Korean e-commerce industry, which resulted in an increase to financial projection risk. During the second quarter 2019, we recognized an additional loss of $27.9 million from changes in the fair value of our investment in Monster LP due to revised financial projections provided by TMON in June 2019. The revisions to the financial projections were made as a result of TMON’s continued underperformance as compared with prior projections along with adjustments to their business model.

    Other Equity Investments

    Other equity investments represent equity investments without readily determinable fair values recorded at cost adjusted for observable price changes and impairments. During the first quarter 2020, we sold 50% of our shares in an other equity investment for total cash consideration of $34.0 million, which approximated cost adjusted for observable price changes as of December 31, 2019.

In addition, we recorded a $6.7 million impairment during the first quarter 2020 to an other equity method investment as a result of revised cash flow projections and a deterioration in financial condition due to COVID-19. We did not recognize any other impairments during the nine months ended September 30, 2020.

4. SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION

The following table summarizes other income (expense), net for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Interest income	$	1,268	$	1,959	$	5,254	$	5,810
Interest expense	(9,408)		(6,029)		(24,375)		(17,162)
Changes in fair value of investments	—		14		(1,405)		(68,971)
Foreign currency gains (losses), net	7,273		(13,197)		5,661		(12,279)
Impairment of investment	—		—		(6,684)		—
Other income (expense), net	$	(867)	$	(17,253)	$	(21,549)	$	(92,602)

The following table summarizes prepaid expenses and other current assets as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Merchandise inventories	$	4,944	$	25,426
Prepaid expenses	16,069		27,077
Income taxes receivable	13,585		4,791
Other	17,360		24,779
Total prepaid expenses and other current assets	$	51,958	$	82,073

16

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The following table summarizes other non-current assets as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Deferred income tax	$	4,932	$	4,829
Debt issue costs, net	2,342		2,156
Deferred commissions expense	4,856		10,133
Deferred cloud implementation costs	10,175		7,372
Other	3,756		4,115
Total other non-current assets	$	26,061	$	28,605

The following table summarizes accrued merchant and supplier payables as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Accrued merchant payables	$	297,018	$	366,573
Accrued supplier payables (1)	84,838		174,367
Total accrued merchant and supplier payables	$	381,856	$	540,940

(1)Amounts include payables to suppliers of inventories and providers of shipping and fulfillment services.

The following table summarizes accrued expenses and other current liabilities as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Refund reserve	$	29,566	$	22,002
Compensation and benefits	37,711		49,009
Accrued marketing	10,256		41,110
Restructuring-related liabilities	19,753		—
Customer credits	50,830		13,764
Income taxes payable	1,221		5,044
Deferred revenue	10,635		17,951
Operating and finance lease obligations	38,055		40,768
Deferred cloud computing contract incentive	3,000		—
Other	56,271		70,544
Total accrued expenses and other current liabilities	$	257,298	$	260,192

The following table summarizes other non-current liabilities as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Contingent income tax liabilities	$	28,725	$	30,121
Finance lease obligations	1,126		5,831
Restructuring-related liabilities	714		—
Deferred income taxes	3,832		3,903
Deferred payroll taxes (1)	5,024		—
Deferred cloud computing contract incentive	5,000		—
Other	5,675		5,132
Total other non-current liabilities	$	50,096	$	44,987

(1)We have elected to defer certain payroll taxes under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act. These amounts are due beginning December 31, 2021.

17

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

5. FINANCING ARRANGEMENTS

Convertible Senior Notes

On April 4, 2016, we issued $250.0 million in aggregate principal amount of convertible senior notes (the "Notes") in a private placement to A-G Holdings, L.P. ("AGH"). Michael Angelakis, the chairman and chief executive officer of Atairos Group, Inc. ("Atairos"), joined our Board of Directors (the "Board") in connection with the issuance of the Notes. Atairos controls the voting power of AGH. The net proceeds from this offering were $243.2 million after deducting issuance costs. The Notes bear interest at a rate of 3.25% per annum, payable annually in arrears on April 1 of each year, beginning on April 1, 2017. The Notes will mature on April 1, 2022, subject to earlier conversion or redemption.

Each $1,000 of principal amount of the Notes initially is convertible into 9.25926 shares of common stock, which is equivalent to an initial conversion price of $108.00 per share, subject to adjustment upon the occurrence of specified events. Upon conversion, we can elect to settle the conversion value in cash, shares of our common stock, or any combination of cash and shares of our common stock. Holders of the Notes may convert their Notes at their option at any time until the close of business on the scheduled trading day immediately preceding the maturity date. In addition, if specified corporate events occur prior to the maturity date, we may be required to increase the conversion rate for holders who elect to convert based on the effective date of such event and the applicable stock price attributable to the event, as set forth in a table contained in the indenture governing the Notes (the "Indenture"). Based on the closing price of the common stock of $20.40 as of September 30, 2020, the if-converted value of the Notes was less than the principal amount.

With certain exceptions, upon a fundamental change (as defined in the Indenture), the holders of the Notes may require us to repurchase all or a portion of their Notes for cash at a purchase price equal to the principal amount plus accrued and unpaid interest. In addition, we may redeem the Notes, at our option, at a purchase price equal to the principal amount plus accrued and unpaid interest on or after April 1, 2020, if the closing sale price of the common stock exceeds 150% of the then-current conversion price for 20 or more trading days in the 30 consecutive trading-day period preceding the exercise of this redemption right.

The Notes are senior unsecured obligations that rank equal in right of payment to all senior unsecured indebtedness and rank senior in right of payment to any indebtedness that is contractually subordinated to the Notes.

The Indenture includes customary events of default. If an event of default, as defined in the Indenture, occurs and is continuing, the principal amount of the Notes and any accrued and unpaid interest may be declared immediately due and payable. In the case of bankruptcy or insolvency, the principal amount of the Notes and any accrued and unpaid interest would automatically become immediately due and payable.

We have separated the Notes into their liability and equity components in the accompanying condensed consolidated balance sheets. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated conversion feature. The carrying amount of the equity component, representing the conversion option, was determined by deducting the fair value of the liability component from the principal amount of the Notes. The difference between the principal amount of the Notes and the liability component (the "debt discount") is amortized to interest expense at an effective interest rate of 9.75% over the term of the Notes. The equity component of the Notes is included in additional paid-in capital in the condensed consolidated balance sheets and is not remeasured as long as it continues to meet the conditions for equity classification.

We incurred transaction costs of approximately $6.8 million related to the issuance of the Notes. Those transaction costs were allocated to the liability and equity components in the same manner as the allocation of the proceeds from the Notes. Transaction costs attributable to the liability component of $4.8 million were recorded as a debt discount in the condensed consolidated balance sheet and are being amortized to interest expense over the term of the Notes. Transaction costs attributable to the equity component of $2.0 million were recorded in stockholders' equity as a reduction of the equity component.

The carrying amount of the Notes consisted of the following as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Liability component:
Principal amount	$	250,000	$	250,000
Less: debt discount	(24,307)		(35,131)
Net carrying amount of liability component	$	225,693	$	214,869
Net carrying amount of equity component	$	67,014	$	67,014

The estimated fair value of the Notes as of September 30, 2020 and December 31, 2019 was $251.8 million and $262.7 million, and was determined using a lattice model. We classified the fair value of the Notes as a Level 3 measurement due to the lack of observable market data over fair value inputs such as our stock price volatility over the term of the Notes and our cost of debt.

As of September 30, 2020, the remaining term of the Notes is approximately 1 years and 6 months. During the three and nine months ended September 30, 2020 and 2019, we recognized interest costs on the Notes as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Contractual interest (3.25% of the principal amount per annum)	$	2,032	$	2,032	$	6,096	$	6,096
Amortization of debt discount	3,701		3,341		10,824		9,772
Total	$	5,733	$	5,373	$	16,920	$	15,868

Note Hedges and Warrants

In May 2016, we purchased convertible note hedges with respect to our common stock for a cost of $59.1 million from certain bank counterparties. The convertible note hedges provide us with the right to purchase up to 2.3 million shares of our common stock at an initial strike price of $108.00 per share, which corresponds to the initial conversion price of the Notes, and are exercisable upon conversion of the Notes. The convertible note hedges are intended to reduce the potential economic dilution upon conversion of the Notes. The convertible note hedges are separate transactions and are not part of the terms of the Notes. Holders of the Notes do not have any rights with respect to the convertible note hedges.

In May 2016, we also sold warrants for total cash proceeds of $35.5 million to certain bank counterparties. The warrants provide the counterparties with the right to purchase up to 2.3 million shares of our common stock at a strike price of $170.00 per share. The warrants expire on various dates between July 1, 2022 and August 26, 2022 and are exercisable on their expiration dates. The warrants are separate transactions and are not part of the terms of the Notes or convertible note hedges. Holders of the Notes and convertible note hedges do not have any rights with respect to the warrants.

The amounts paid and received for the convertible note hedges and warrants were recorded in additional paid-in capital in the condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019. The convertible note hedges and warrants are not remeasured as long as they continue to meet the conditions for equity classification. The amounts paid for the convertible note hedges are tax deductible over the term of the Notes, while the proceeds received from the warrants are not taxable. 

Under the if-converted method, the shares of common stock underlying the conversion option in the Notes are included in the diluted earnings per share denominator and the interest expense on the Notes, net of tax, is added to the numerator. However, upon conversion, there will be no economic dilution from the Notes, as exercise of the convertible note hedges eliminates any dilution from the Notes that would have otherwise occurred when the price of our common stock exceeds the conversion price. Taken together, the purchase of the

convertible note hedges and sale of warrants are intended to offset any actual dilution from the conversion of the Notes and to effectively increase the overall conversion price from $108.00 to $170.00 per share.

Revolving Credit Agreement

In May 2019, we entered into a second amended and restated senior secured revolving credit agreement which provided for aggregate principal borrowings of up to $400.0 million (prior to the Amendment described below) and matures in May 2024.

On July 17, 2020, we entered into an amendment to the revolving credit agreement (the "Amendment" and the revolving credit agreement as amended, the "Amended Credit Agreement") in order to provide us with operational flexibility and covenant relief through the end of the first quarter of 2021 (the "Suspension Period") in light of the ongoing impacts of COVID-19 on our business. In addition to the covenant relief described below, the Amendment permanently reduces borrowing capacity under our senior secured revolving credit facility from $400.0 million to $225.0 million.

We deferred debt issuance costs of $3.2 million as a result of entering into the Amended Credit Agreement. Deferred debt issuance costs are included within Other non-current assets on the condensed consolidated balance sheet as of September 30, 2020 and are amortized to interest expense over the term of the respective agreement.

Pursuant to the Amendment, during the Suspension Period, the Company will be exempt from certain covenant restrictions, namely the requirements to maintain a maximum funded indebtedness to EBITDA ratio, a maximum senior secured indebtedness to EBITDA ratio, a minimum fixed charge coverage ratio, unrestricted cash of not less than $250.0 million and a minimum liquidity balance (including any undrawn amounts under the credit facility) of at least 70% of our accrued merchant and supplier payables balance (collectively, the "Existing Financial Covenants"). Additionally, the Amendment provides that, during the Suspension Period, we will be required to maintain specified minimum quarterly EBITDA levels and to maintain a monthly minimum liquidity balance (including any undrawn amounts under the credit facility) of at least 100% of our accrued merchant and supplier payables balance for such month plus $50.0 million. Following the Suspension Period, we will be subject to the Existing Financial Covenants.

In addition, under the Amended Credit Agreement, we are subject to various covenants, including customary restrictive covenants that limit our ability to, among other things: incur additional indebtedness; make dividend and other restricted payments, including limiting the amount of our share repurchases; enter into sale and leaseback transactions; make investments, loans or advances; grant or incur liens on assets; sell assets; engage in mergers, consolidations, liquidations or dissolutions; and engage in transactions with related parties and other affiliates. The Amendment further restricts certain of these negative covenants during the Suspension Period, including our ability to make share repurchases, acquisitions, investments and to incur additional indebtedness and liens.

Non-compliance with the covenants under the Amended Credit Agreement may result in termination of the commitments thereunder and any then outstanding borrowings may be declared due and payable immediately. We have the right to terminate the Amended Credit Agreement or reduce the available commitments at any time.

The Amendment also increases interest rates through the end of the first quarter of 2021, raising the alternative base rate and Canadian prime spreads to 1.50%, the fixed rate spreads to 2.50% and the commitment fee to 0.4% on the daily amount of the unused commitments under the Amended Credit Agreement. Following the Suspension Period, the applicable spread and commitment fee will revert to pre-Amendment levels, which provides for (a) interest at a rate per annum equal to (i) an adjusted LIBO rate or (ii) a customary base rate (with loans denominated in certain currencies bearing interest at rates specific to such currencies) plus an additional margin ranging between 0.50% and 2.00% and (b) commitment fees ranging from 0.25% to 0.35% on the daily amount of unused commitments. The Amended Credit Agreement also provides for the issuance of up to $75.0 million in letters of credit, provided that the sum of outstanding borrowings and letters of credit do not exceed the maximum funding commitment of $225.0 million.

The Amended Credit Agreement is secured by substantially all of our tangible and intangible assets, including a pledge of 100% of the outstanding capital stock of substantially all of our direct and indirect domestic

subsidiaries and 65% of the shares or equity interests of first-tier foreign subsidiaries and each U.S. entity whose assets substantially consist of capital stock and/or intercompany debt of one or more foreign subsidiaries, subject to certain exceptions. Certain of our domestic and foreign subsidiaries are guarantors under the Amended Credit Agreement.

We had $200.0 million of borrowings and $20.6 million of outstanding letters of credit under the Amended Credit Agreement as of September 30, 2020. We had $18.1 million of outstanding letters of credit under the credit agreement as of December 31, 2019. See Item 2. Management's Discussion of Financial Condition and Results of Operations - Liquidity and Capital Resources, for additional information.

6. COMMITMENTS AND CONTINGENCIES

Our contractual obligations and commitments and future operating income under our operating subleases as of September 30, 2020 and through the date of this report, did not materially change from the amounts set forth in our 2019 Annual Report on Form 10-K, except as disclosed below.

Purchase Obligations

During the nine months ended September 30, 2020, we entered into non-cancellable arrangements for cloud computing services and software. Future payments under these new contractual obligations are as follows (in thousands):

2020	$	5,810
2021	17,672
2022	17,118
2023 (1)	22,753
Total	$	63,353

(1)Includes $8.0 million in cloud computing arrangement costs for which the timing of settlement is based on usage. We expect to incur those costs over the three-year contract period ending in 2023.

Legal Matters and Other Contingencies

From time to time, we are party to various legal proceedings incident to the operation of our business. For example, we currently are involved in proceedings brought by merchants, employment and related matters, intellectual property infringement suits, customer lawsuits, stockholder claims relating to U.S. securities law, consumer class actions and suits alleging, among other things, violations of state consumer protection or privacy laws.

On April 28, 2020, an individual plaintiff filed a securities fraud class action complaint in the United States District Court for the Northern District of Illinois, and in July 2020, another individual was appointed as lead plaintiff. The lawsuit covers the time period from July 30, 2019 through February 18, 2020. The lead plaintiff alleges that Groupon and certain of its officers made materially false and/or misleading statements or omissions regarding its business, operations and prospects, specifically as it relates to reiterating its full year guidance on November 4, 2019 and the Groupon Select program. We intend to vigorously defend against these allegations, which we believe to be without merit.

In addition, third parties have from time to time claimed, and others may claim in the future, that we have infringed their intellectual property rights. We are subject to intellectual property disputes, including patent infringement claims, and expect that we will continue to be subject to intellectual property infringement claims as our services expand in scope and complexity. In the past, we have litigated such claims, and we are presently involved in several patent infringement and other intellectual property-related claims, including pending litigation or trademark disputes relating to, for example, our Goods category, some of which could involve potentially substantial claims for damages or injunctive relief. We may also become more vulnerable to third-party claims as laws such as the Digital Millennium Copyright Act are interpreted by the courts, and we become subject to laws in jurisdictions where the underlying laws with respect to the potential liability of online intermediaries are either

unclear or less favorable. We believe that additional lawsuits alleging that we have violated patent, copyright or trademark laws may be filed against us. Intellectual property claims, whether meritorious or not, are time consuming and often costly to resolve, could require expensive changes in our methods of doing business or the goods we sell, or could require us to enter into costly royalty or licensing agreements.

We also are subject to consumer claims or lawsuits relating to alleged violations of consumer protection or privacy rights and statutes, some of which could involve potentially substantial claims for damages, including statutory or punitive damages. Consumer and privacy related claims or lawsuits, whether meritorious or not, could be time consuming, result in costly litigation, damage awards, fines and penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, or require us to change our business practices, sometimes in expensive ways.

We are also subject to, or in the future may become subject to, a variety of regulatory inquiries, audits, and investigations across the jurisdictions where we conduct our business, including, for example, inquiries related to consumer protection, employment matters and/or hiring practices, marketing practices, tax, unclaimed property and privacy rules and regulations. Any regulatory actions against us, whether meritorious or not, could be time consuming, result in costly litigation, damage awards, fines and penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, require us to change our business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources, materially damage our brand or reputation, or otherwise harm our business.

We establish an accrued liability for loss contingencies related to legal and regulatory matters when the loss is both probable and reasonably estimable. Those accruals represent management's best estimate of probable losses and, in such cases, there may be an exposure to loss in excess of the amounts accrued. For certain of the matters described above, there are inherent and significant uncertainties based on, among other factors, the stage of the proceedings, developments in the applicable facts of law, or the lack of a specific damage claim. However, we believe that the amount of reasonably possible losses in excess of the amounts accrued for those matters would not have a material adverse effect on our business, condensed consolidated financial position, results of operations or cash flows. Our accrued liabilities for loss contingencies related to legal and regulatory matters may change in the future as a result of new developments, including, but not limited to, the occurrence of new legal matters, changes in the law or regulatory environment, adverse or favorable rulings, newly discovered facts relevant to the matter, or changes in the strategy for the matter. Regardless of the outcome, litigation and other regulatory matters can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Indemnifications

In connection with the disposition of our operations in Latin America in 2017, we recorded $5.4 million in indemnification liabilities for certain tax and other matters upon the closing of the transactions as an adjustment to the net loss on the dispositions within discontinued operations at their fair value. We estimated the indemnification liabilities using a probability-weighted expected cash flow approach. During the first quarter of 2020, we decreased our indemnification liabilities due to the expiration of certain indemnification obligations. The resulting benefit of $0.4 million is recorded within Income (loss) from discontinued operations on the condensed consolidated statement of operations for the nine months ended September 30, 2020. Our remaining indemnification liabilities were $2.8 million as of September 30, 2020. We estimate that the total amount of obligations that are reasonably possible to arise under the indemnifications in excess of amounts accrued as of September 30, 2020 is approximately $11.7 million.

In the normal course of business to facilitate transactions related to our operations, we indemnify certain parties, including employees, lessors, service providers, merchants, and counterparties to investment agreements and asset and stock purchase agreements with respect to various matters. We have agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or other claims made against those parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. We are also subject to increased exposure to various claims as a result of our divestitures and acquisitions, particularly in cases where we are entering into new businesses in connection with such acquisitions. We may also become more vulnerable to claims as we expand the range and scope of our services

and are subject to laws in jurisdictions where the underlying laws with respect to potential liability are either unclear or less favorable. In addition, we have entered into indemnification agreements with our officers, directors and underwriters, and our bylaws contain similar indemnification obligations that cover officers, directors, employees and other agents. 

Except as noted above, it is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, any payments that we have made under these agreements have not had a material impact on our operating results, financial position or cash flows.

7. STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS

Reverse Stock Split

On June 9, 2020, our stockholders approved amendments to our Restated Certificate of Incorporation to effect a reverse stock split of our shares of common stock, and our Board approved a final reverse stock split ratio of 1-for-20 and a corresponding reduction in the number of authorized shares of our common stock. The reverse stock split became effective on June 10, 2020. On the effective date, every 20 shares of issued and outstanding common stock were combined and converted into one issued and outstanding share of common stock. The number of authorized shares of Common Stock was reduced proportionately. Fractional shares were cancelled and stockholders received cash in lieu thereof and the par value per share of common stock remains unchanged. A proportionate adjustment was also made to the maximum number of shares of common stock issuable under the Groupon, Inc. Stock Plans (the "Plans"), and the Groupon, Inc. 2012 Employee Stock Purchase Plan, as amended ("ESPP").

As a result, the number of shares and income (loss) per share disclosed throughout this Quarterly Report on Form 10-Q have been retrospectively adjusted to reflect the reverse stock split.

Common Stock

Pursuant to our restated certificate of incorporation, as of September 30, 2020, the Board had the authority to issue up to a total of 100,500,000 shares of common stock. Each holder of common stock is entitled to one vote per share on any matter that is submitted to a vote of stockholders. In addition, holders of our common stock will vote as a single class of stock on any matter that is submitted to a vote of stockholders.

Share Repurchase Program

In May 2018, the Board authorized us to repurchase up to $300.0 million of our common stock under our share repurchase program. During the three and nine months ended September 30, 2020, we did not purchase any shares under the program. As of September 30, 2020, up to $245.0 million of common stock remained available for purchase under our program. The timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under the Amended Credit Agreement, share price, available cash and other factors, and the program may be terminated at any time.

Groupon, Inc. Stock Plans

The Plans are administered by the Compensation Committee of the Board (the "Compensation Committee"). As of September 30, 2020, 2,899,062 shares of common stock were available for future issuance under the Plans.

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The stock-based compensation expense related to stock awards issued under the Plans are presented within the following line items of the condensed consolidated statements of operations for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Cost of revenue	$	156	$	405	$	496	$	1,163
Marketing	377		1,671		1,218		4,586
Selling, general and administrative	7,846		17,467		29,223		56,768
Restructuring and related charges	311		—		1,735		—
Total stock-based compensation expense	$	8,690	$	19,543	$	32,672	$	62,517

We capitalized $1.1 million and $2.0 million of stock-based compensation for the three months ended September 30, 2020 and 2019, and $3.4 million and $5.5 million for the nine months ended September 30, 2020 and 2019 in connection with internally-developed software and cloud computing arrangements.

Employee Stock Purchase Plan

The ESPP authorizes us to grant up to 1,000,000 shares of common stock under that plan as of September 30, 2020. For the nine months ended September 30, 2020 and 2019, 69,371 and 74,300 shares of common stock were issued under the ESPP.

Restricted Stock Units

The restricted stock units granted under the Plans generally have vesting periods between one and four years and are amortized on a straight-line basis over their requisite service period.

The table below summarizes restricted stock unit activity under the Plans for the nine months ended September 30, 2020:

	Restricted Stock Units	Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2019	1,527,014	$	74.80
Granted	1,744,782	24.59
Vested	(596,183)	74.86
Forfeited	(720,949)	65.70
Unvested at September 30, 2020	1,954,664	33.41

As of September 30, 2020, $49.7 million of unrecognized compensation costs related to unvested restricted stock units are expected to be recognized over a remaining weighted-average period of 1.09 years.

Performance Share Units

We grant performance share units under the Plans that vest in shares of our common stock upon the achievement of financial and operational targets specified in the respective award agreement ("Performance Share Units"). During the nine months ended September 30, 2019, we also granted performance share units subject to a market condition ("Market-based Performance Share Units").

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(unaudited)

The Market-based Performance Share Units will vest if our average daily closing stock price is equal to or greater than $120.00 per share over a period of 30 consecutive trading days prior to December 31, 2022 or if a change in control occurs during the performance period at the specified stock price (and on a proportional basis for a change in control price between the grant date price and the specified stock price). We used a Monte Carlo simulation to calculate the grant date fair value of the awards and the related derived service period over which we recognized the expense. The key inputs used in the Monte Carlo simulation were the risk-free rate, our volatility of 49.8% and our cost of equity of 12.8%. We did not recognize any compensation costs related to our Market-based Performance Share Units during the three months ended September 30, 2020 as the derived service period ended during the first quarter 2020, at which time these awards were fully expensed.

Our Performance Share Units and Market-based Performance Share Units are subject to continued employment through the performance period dictated by the award and certification by the Compensation Committee that the specified performance conditions have been achieved.

The table below summarizes Performance Share Unit activity under the Plans for the nine months ended September 30, 2020:

	Performance Share Units	Weighted-Average Grant Date Fair Value (per unit)		Market-based Performance Share Units	Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2019	203,853	$	79.76	341,002	$	60.60
Granted	96,598	15.44		—	—
Vested	(104,441)	80.77		—	—
Forfeited	(71,128)	79.94		(91,668)	60.60
Unvested at September 30, 2020	124,882	29.78		249,334	60.60
Maximum shares issuable upon vesting at September 30, 2020	173,181			249,334

As of September 30, 2020, $1.5 million of unrecognized compensation costs related to unvested Performance Share Units are expected to be recognized over a remaining weighted-average period of 1.44 years. We have recognized all compensation costs related to our unvested Market-Based Performance Share Units.

8. REVENUE RECOGNITION

Refer to Note 13, Segment Information, for revenue summarized by reportable segment and category for the three and nine months ended September 30, 2020 and 2019.

Contract Balances

A substantial majority of our deferred revenue relates to product sales for which revenue will be recognized as the products are delivered to customers, generally within one week following the balance sheet date. Our deferred revenue was $10.6 million as of September 30, 2020. As of December 31, 2019, our deferred revenue was $18.0 million, all of which was recognized during the nine months ended September 30, 2020.

Customer Credits

We issue credits to customers that can be applied to future purchases through our online marketplaces. Credits are primarily issued as consideration for refunds. To a lesser extent, credits are issued for customer

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(unaudited)

relationship purposes. The following table summarizes the activity in the liability for customer credits for the nine months ended September 30, 2020 (in thousands):

	Customer Credits
Balance as of December 31, 2019	$	13,764
Credits issued	153,638
Credits redeemed (1)	(102,373)
Breakage revenue recognized	(15,055)
Foreign currency translation	856
Balance as of September 30, 2020	$	50,830

(1)Customer credits can be redeemed through our online marketplaces for goods or services provided by a third-party merchant or for merchandise inventory sold by us. When customer credits are redeemed for goods or services provided by a third-party merchant, service revenue is recognized on a net basis as the difference between the carrying amount of the customer credit liability derecognized and the amount due to the merchant for the related transaction. When customer credits are redeemed for merchandise inventory sold by us, product revenue is recognized on a gross basis equal to the amount of the customer credit liability derecognized. Customer credits are primarily used within one year of issuance.

Costs of Obtaining Contracts

Incremental costs to obtain contracts with third-party merchants, such as sales commissions, are deferred and recognized over the expected period of the merchant arrangement, generally from 12 to 18 months. Deferred contract acquisition costs are presented within the following line items of the condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Prepaid expenses and other current assets	$	1,132	$	2,501
Other non-current assets	4,856		10,133

The amortization of deferred contract acquisition costs is classified within Selling, general and administrative expense in the condensed consolidated statements of operations. We amortized $3.6 million and $5.0 million of deferred contract acquisition costs during the three months ended September 30, 2020 and 2019, and $12.3 million and $15.5 million during the nine months ended September 30, 2020 and 2019. We did not recognize any impairments in relation to the deferred contract acquisition costs during the three and nine months ended September 30, 2020 and 2019.

Allowance for Expected Credit Losses on Accounts Receivable

We establish an allowance for expected credit losses on accounts receivables based on identifying the following customer risk characteristics: size, type of customer, and payment terms offered in the normal course of business. Receivables with similar risk characteristics are grouped into pools. For each pool, we consider the historical credit loss experience, current economic conditions, bankruptcy filings, published or estimated credit default rates, age of the receivable and any recoveries in assessing the lifetime expected credit losses.

The following table summarizes the activity in the allowance for expected credit losses on accounts receivables for the nine months ended September 30, 2020 (in thousands):

	Allowance for Expected Credit Losses
Balance as of January 1, 2020	$	3,693
Change in Provision	8,683
Write-offs	(2,330)
Foreign currency translation	187
Balance as of September 30, 2020	$	10,233

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(unaudited)

Variable Consideration for Unredeemed Vouchers

For merchant agreements with redemption payment terms, the merchant is not paid its share of the sale price for a voucher sold through one of our online marketplaces until the customer redeems the related voucher. If the customer does not redeem a voucher with such merchant payment terms, we retain all of the gross billings for that voucher, rather than retaining only our net commission. We estimate the variable consideration from vouchers that will not ultimately be redeemed using our historical voucher redemption experience and recognize that amount as revenue at the time of sale. We only recognize amounts in variable consideration when we believe it is probable that a significant reversal of revenue will not occur in future periods, which requires us to make significant estimates of future redemptions. If actual redemptions differ from our estimates, the effects could be material to the condensed consolidated financial statements. As of September 30, 2020 and December 31, 2019, we constrained $41.0 million and $14.6 million in revenue from unredeemed vouchers that we may recognize in future periods when we determine it is probable that a significant amount of that revenue will not be subsequently reversed. We have increased our constraint on revenue from unredeemed vouchers due to variability in customer redemption behavior due to the impacts of COVID-19. In addition, the revenue we have constrained on unredeemed vouchers has increased in connection with our increased use of pay on redemption terms for our North America merchants.

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(unaudited)

9. RESTRUCTURING AND RELATED CHARGES

In April 2020, the Board approved a multi-phase restructuring plan of up to $105.0 million of total pretax charges related to our previously announced strategic shift and as part of the cost cutting measures implemented in response to the impact of COVID-19 on our business. We expect to incur total pretax charges of $75.0 million to $105.0 million in connection with the multi-phase restructuring actions through the end of 2021. The first phase of the restructuring actions includes an overall reduction of approximately 1,300 positions globally and the exit or discontinuation of the use of certain leases and other assets by the end of 2020. The majority of the first phase of workforce reductions and impairments of our right-of-use and other long-lived assets occurred during the second quarter 2020. In the third quarter 2020, we initiated the second phase of our restructuring plan, which included additional workforce reductions and the exit of our operations in New Zealand and Japan. The majority of our restructuring charges are expected to be paid in cash and primarily relate to employee severance and benefits expenses, facilities-related costs and impairment charges and professional advisory fees. We will continue to evaluate our cost structure, including additional workforce reductions, as part of our restructuring plan. Costs incurred related to the restructuring plan are classified as Restructuring and related charges on the condensed consolidated statements of operations.

The following table summarizes costs incurred by segment related to the restructuring plans for both the three and nine months ended September 30, 2020 (in thousands):

	Three Months Ended September 30, 2020
	Employee Severance and Benefit Costs (1)		Legal and Advisory Costs		Property, Equipment and Software Impairments		Right-of-Use Asset Impairments and Lease-related Charges (Credits)		Total Restructuring Charges (Credits)
North America	$	1,489	$	435	$	70	$	736	$	2,730
International	14,400		18		195		3,216		17,829
Consolidated	$	15,889	$	453	$	265	$	3,952	$	20,559

(1)The employee severance and benefits costs for the three months ended September 30, 2020 are related to the termination of and planned termination of approximately 500 employees. Additional severance and benefits costs may be incurred in future periods. Substantially all of the remaining cash payments for the costs accrued as of September 30, 2020 are expected to be disbursed by the end of 2020.

	Nine Months Ended September 30, 2020
	Employee Severance and Benefit Costs (1)		Legal and Advisory Costs		Property, Equipment and Software Impairments		Right-of-Use Asset Impairments and Lease-related Charges (Credits)		Total Restructuring Charges (Credits)
North America	$	17,548	$	443	$	4,790	$	10,047	$	32,828
International	23,041		759		227		4,182		28,209
Consolidated	$	40,589	$	1,202	$	5,017	$	14,229	$	61,037

(1)The employee severance and benefits costs for the nine months ended September 30, 2020 are related to the termination and planned termination of approximately 1,200 employees. Additional severance and benefits costs may be incurred in future periods. Substantially all of the remaining cash payments for the costs accrued as of September 30, 2020 are expected to be disbursed by the end of 2020.

As a part of our restructuring plan, we vacated several of our leased facilities, and many of those facilities are being actively marketed for sublease or we are in negotiations with the landlord to potentially terminate or modify those leases. During the nine months ended September 30, 2020, we recognized $17.2 million in restructuring charges related to the impairment of right-of-use assets and leasehold improvements related to those leases as we reduced the carrying value of the those assets to their respective fair value. See Note 2, Goodwill and Long-Lived Assets for more information. Rent expense, including amortization of the right-of-use asset and accretion of the operating lease liability, sublease income and other variable lease costs related to the leased facilities vacated as part of our restructuring plan are presented within Restructuring and related charges in the condensed consolidated statements of operations. The current and non-current liabilities associated with these leases continue to be presented within Other current liabilities and Operating lease obligations in the condensed consolidated balance sheets.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The following table summarizes restructuring liability activity for the nine months ended September 30, 2020 (in thousands):

	Employee Severance and Benefit Costs		Legal and Advisory Costs		Total
Balance as of December 31, 2019 (1)	$	699	$	—	$	699
Charges payable in cash (2)	38,854		1,202		40,056
Cash payments	(20,319)		(753)		(21,072)
Foreign currency translation	722		62		784
Balance as of September 30, 2020	$	19,956	$	511	$	20,467

(1)Amounts included in the beginning balance are related to prior restructuring plans and the liabilities under those plans have been substantially settled.

(2)Excludes stock-based compensation of $1.7 million related to accelerated vesting of stock-based compensation awards for certain employees terminated as a result of our restructuring activities during the nine months ended September 30, 2020.

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(unaudited)

10. INCOME TAXES

Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items.

Provision (benefit) for income taxes and income (loss) from continuing operations before provision (benefit) for income taxes for the three and nine months ended September 30, 2020 and 2019 was as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Provision (benefit) for income taxes	$	(486)	$	2,069	$	(7,170)	$	591
Income (loss) from continuing operations before provision (benefit) for income taxes	(17,047)		(12,616)		(307,703)		(92,909)

Our U.S. Federal income tax rate is 21%. The primary factors impacting the effective tax rate for the three and nine months ended September 30, 2020 and 2019 were the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets. The nine months ended September 30, 2020 and 2019 were impacted by the reversals of reserves for uncertain tax positions due to the closure of tax audits. The nine months ended September 30, 2020 were also impacted by the carryback of federal net operating losses due to the income tax relief provided by the CARES Act. We expect that our consolidated effective tax rate in future periods will continue to differ significantly from the U.S. federal income tax rate as a result of our tax obligations in jurisdictions with profits and valuation allowances in jurisdictions with losses.

We are currently undergoing income tax audits in multiple jurisdictions. It is likely that the examination phase of some of those audits will conclude in the next 12 months. There are many factors, including factors outside of our control, which influence the progress and completion of those audits. We are subject to claims for tax assessments by foreign jurisdictions, including a proposed assessment for $119.1 million, inclusive of estimated incremental interest from the original assessment. We believe that the assessment, which primarily relates to transfer pricing on transactions occurring in 2011, is without merit and we intend to vigorously defend ourselves in that matter. In addition to any potential increases in our liabilities for uncertain tax positions from the ultimate resolution of that assessment, we believe that it is reasonably possible that reductions of up to $5.8 million in unrecognized tax benefits may occur within the 12 months following September 30, 2020 upon closing of income tax audits or the expiration of applicable statutes of limitations.

In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations. Additionally, while we did not incur the deemed repatriation tax, an actual repatriation from our non-U.S. subsidiaries could be subject to foreign and U.S. state income taxes. Aside from limited exceptions for which the related deferred tax liabilities recognized as of September 30, 2020 and December 31, 2019 are immaterial, we do not intend to distribute earnings of foreign subsidiaries for which we have an excess of the financial reporting basis over the tax basis of our investments and therefore have not recorded any deferred taxes related to such amounts. The actual tax cost resulting from a distribution would depend on income tax laws and circumstances at the time of distribution. Determination of the amount of unrecognized deferred tax liability related to the excess of the financial reporting basis over the tax basis of our foreign subsidiaries is not practical due to the complexities associated with the calculation.

Groupon uses a cost-sharing arrangement under which controlled members agree to share the costs and risks of developing intangible properties in accordance with their reasonably anticipated share of benefits from the intangibles. In 2019, the Ninth Circuit Court of Appeals entered a decision in Altera Corp. v. Commissioner requiring related parties in an intercompany cost-sharing arrangement to share expenses related to stock-based compensation. Altera then petitioned the United States Supreme Court to review the Ninth Circuit's decision. In June 2020, the Supreme Court denied this petition, and accordingly, the Ninth Circuit's Altera decision stands. The Altera decision did not have a material impact on our provision for income taxes for the year ended December 31, 2019, and is not expected to have an impact for the year ended December 31, 2020.

25

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

11. FAIR VALUE MEASUREMENTS

Fair value is defined under U.S. GAAP as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability.

To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs in valuation methodologies used to measure fair value:

Level 1 - Measurements that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Measurements that include other inputs that are directly or indirectly observable in the marketplace.

Level 3 - Measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. These fair value measurements require significant judgment.

In determining fair value, we use various valuation approaches within the fair value measurement framework. The valuation methodologies used for our assets and liabilities measured at fair value and their classification in the valuation hierarchy are summarized below:

Fair value option investments and available-for-sale securities. We use the discounted cash flow method, which is an income approach, to estimate the fair value of the investees. The key inputs to determining fair values under that approach are cash flow forecasts and discount rates. We also use a market approach valuation technique, which is based on market multiples of guideline companies, to determine the fair value of each entity.

We also have investments in redeemable preferred shares. We measure the fair value of those available-for-sale securities using the discounted cash flow method.

We have classified our fair value option investments and our investments in available-for-sale securities as Level 3 due to the lack of observable market data over fair value inputs such as cash flow projections and discount rates. Increases in projected cash flows and decreases in discount rates contribute to increases in the estimated fair values of the fair value option investments and available-for-sale securities, whereas decreases in projected cash flows and increases in discount rates contribute to decreases in their fair values. Our fair value option investments were $0.0 million and $1.4 million as of September 30, 2020 and December 31, 2019.

Contingent consideration. We are subject to a contingent consideration arrangement to transfer a maximum payout in cash of $2.5 million to the former owners of a business acquired on April 30, 2018.

Liabilities for contingent consideration are measured at fair value each reporting period, with the acquisition-date fair value included as part of the consideration transferred in the related business combination and subsequent changes in fair value recorded in earnings within Selling, general and administrative expense on the condensed consolidated statements of operations.

We use an income approach to value contingent consideration obligations based on the present value of probability-weighted future cash flows. We classify the contingent consideration liabilities as Level 3 due to the lack of relevant observable market data over fair value inputs such as probability-weighting of payment outcomes. We determined that the fair value of our contingent consideration was $0.3 million and $1.3 million as of September 30, 2020 and December 31, 2019.

26

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The following table provides a roll forward of the fair value of recurring Level 3 fair value measurements for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Assets
Fair value option investments:
Beginning Balance	$	—	$	4,917	$	1,405	$	73,902
Total gains (losses) included in earnings	—		14		(1,405)		(68,971)
Ending Balance	$	—	$	4,931	$	—	$	4,931
Unrealized gains (losses) still held (1)	$	—	$	14	$	(1,405)	$	(68,971)
Available-for-sale securities - Redeemable preferred shares:
Beginning Balance	$	—	$	10,201	$	—	$	10,340
Total gains (losses) included in other comprehensive income (loss)	—		(63)		—		(202)
Ending Balance	$	—	$	10,138	$	—	$	10,138
Unrealized gains (losses) still held (1)	$	—	$	(63)	$	—	$	(202)
Liabilities
Contingent Consideration:
Beginning Balance	$	278	$	1,239	$	1,298	$	1,529
Settlements of contingent consideration liabilities	—		—		(908)		(312)
Total losses (gains) included in earnings	—		6		6		33
Foreign currency translation	13		(38)		(105)		(43)
Ending Balance	$	291	$	1,207	$	291	$	1,207
Unrealized gains (losses) still held (1)	$	—	$	6	$	6	$	33

(1)Represents the unrealized gains or losses recorded in earnings and/or other comprehensive income (loss) during the period for assets and liabilities classified as Level 3 that are still held (or outstanding) at the end of the period.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis, including assets that are written down to fair value as a result of an impairment or increased due to an observable price change in an orderly transaction.

We recognized $109.5 million in non-cash impairment charges related to goodwill and $39.6 million in non-cash impairment charges related to long-lived assets during the nine months ended September 30, 2020, of which $17.2 million is included in Restructuring and related charges on our condensed consolidated statement of operations. See Note 2, Goodwill and Long-Lived Assets, and Note 9, Restructuring and Related Charges, for additional information.

We recognized $6.7 million in impairment charges related to an other equity method investment during the nine months ended September 30, 2020. See Note 3, Investments, for additional information.

We did not record any other significant nonrecurring fair value measurements after initial recognition for the three and nine months ended September 30, 2020 and 2019.

Estimated Fair Value of Financial Assets and Liabilities Not Measured at Fair Value

Our financial instruments not carried at fair value consist primarily of accounts receivable, restricted cash, short-term borrowings, accounts payable, accrued merchant and supplier payables and accrued expenses. The carrying values of those assets and liabilities approximate their respective fair values as of September 30, 2020 and December 31, 2019 due to their short-term nature.

27

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

12. INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of common shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities include stock options, restricted stock units, performance share units, performance bonus awards, ESPP shares, warrants and convertible senior notes. If dilutive, those potentially dilutive securities are reflected in diluted net income (loss) per share using the treasury stock method, except for the convertible senior notes, which are subject to the if-converted method.

The following table sets forth the computation of basic and diluted net income (loss) per share of common stock for the three and nine months ended September 30, 2020 and 2019 (in thousands, except share amounts and per share amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Basic and diluted net income (loss) per share:
Numerator
Net income (loss) - continuing operations	$	(16,561)	$	(14,685)	$	(300,533)	$	(93,500)
Less: Net income (loss) attributable to noncontrolling interests	(291)		2,000		1,758		8,080
Net income (loss) attributable to common stockholders - continuing operations	(16,270)		(16,685)		(302,291)		(101,580)
Net income (loss) attributable to common stockholders - discontinued operations	—		—		382		2,162
Net income (loss) attributable to common stockholders	$	(16,270)	$	(16,685)	$	(301,909)	$	(99,418)
Denominator
Weighted-average common shares outstanding	28,751,520		28,348,561		28,535,393		28,416,966
Basic and diluted net income (loss) per share:
Continuing operations	$	(0.57)	$	(0.59)	$	(10.59)	$	(3.57)
Discontinued operations	—		—		0.01		0.08
Basic and diluted net income (loss) per share	$	(0.57)	$	(0.59)	$	(10.58)	$	(3.49)

The following weighted-average potentially dilutive instruments are not included in the diluted net income (loss) per share calculations above because they would have had an antidilutive effect on the net income (loss) per share from continuing operations:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2020	2019	2020	2019
Restricted stock units	1,907,396	1,768,908	1,879,752	1,657,446
Performance share units and other stock-based compensation awards	151,110	78,055	199,849	81,545
Convertible senior notes	2,314,815	2,314,815	2,314,815	2,314,815
Warrants	2,314,815	2,314,815	2,314,815	2,314,815
Total	6,688,136	6,476,593	6,709,231	6,368,621

We had outstanding performance share units as of September 30, 2020 and 2019 that were eligible to vest into shares of common stock subject to the achievement of specified performance or market conditions. Contingently issuable shares are excluded from the computation of diluted earnings per share if, based on current period results, the shares would not be issuable if the end of the reporting period were the end of the contingency period. As of September 30, 2020, there were up to 268,654 shares of common stock issuable upon vesting of outstanding performance share units that were excluded from the table above as the performance or market conditions were not satisfied as of the end of the period.

28

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

13. SEGMENT INFORMATION

The segment information reported in the tables below reflects the operating results that are regularly reviewed by our chief operating decision maker to assess performance and make resource allocation decisions. Our operations are organized into two segments: North America and International. During the third quarter 2020, we changed our measure of segment profitability from operating income (loss) to contribution profit, defined as gross profit less marketing expense, which is consistent with how management reviews the operating results of the segments. Contribution profit measures the amount of marketing investment needed to generate gross profit. Other operating expenses are excluded from contribution profit as management does not review those expenses by segment. Prior period segment information has been retrospectively adjusted to reflect the change.

The following table summarizes revenue by reportable segment and category for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
North America
Service revenue:
Local	$	98,561	$	175,140	$	322,945	$	532,599
Goods	8,787		3,000		18,401		9,841
Travel	4,748		13,680		13,722		48,746
Total service revenue	112,096		191,820		355,068		591,186
Product revenue - Goods	68,215		111,776		293,729		394,235
Total North America revenue (1)	180,311		303,596		648,797		985,421
International
Service revenue:
Local	36,528		65,440		103,221		208,625
Goods	3,309		2,817		8,821		6,882
Travel	3,140		8,003		7,368		24,817
Total service revenue	42,977		76,260		119,410		240,324
Product revenue - Goods	80,731		115,756		305,608		380,854
Total International revenue (1)	$	123,708	$	192,016	$	425,018	$	621,178

(1)North America includes revenue from the United States of $177.3 million and $297.9 million for the three months ended September 30, 2020 and 2019, and $640.4 million and $965.9 million for the nine months ended September 30, 2020 and 2019. International includes revenue from the United Kingdom of $42.9 million and $69.4 million for the three months ended September 30, 2020 and 2019, and $151.1 million and $221.8 million for the nine months ended September 30, 2020 and 2019. There were no other individual countries that represented more than 10% of consolidated total revenue for the three and nine months ended September 30, 2020 and 2019. Revenue is attributed to individual countries based on the location of the customer.

29

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The following table summarizes gross profit by reportable segment and category for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
North America
Service gross profit:
Local	$	87,507	$	155,032	$	283,004	$	473,787
Goods	7,440		2,280		14,851		7,838
Travel	3,874		10,717		9,726		38,791
Total service gross profit	98,821		168,029		307,581		520,416
Product gross profit - Goods	10,896		24,046		47,599		80,045
Total North America gross profit	109,717		192,075		355,180		600,461
International
Service gross profit:
Local	33,687		61,183		93,054		195,941
Goods	2,849		2,589		7,422		6,241
Travel	2,711		7,332		6,259		22,743
Total service gross profit	39,247		71,104		106,735		224,925
Product gross profit - Goods	11,058		14,761		36,580		50,702
Total International gross profit	$	50,305	$	85,865	$	143,315	$	275,627

30

GROUPON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

The following table summarizes contribution profit by reportable segment for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
North America
Gross profit	$	109,717	$	192,075	$	355,180	$	600,461
Marketing	19,718		45,223		73,203		162,132
Contribution profit	89,999		146,852		281,977		438,329
International
Gross profit	50,305		85,865		143,315		275,627
Marketing	11,668		29,753		43,555		95,164
Contribution profit	38,637		56,112		99,760		180,463
Consolidated
Gross profit	160,022		277,940		498,495		876,088
Marketing	31,386		74,976		116,758		257,296
Contribution profit	128,636		202,964		381,737		618,792
Selling, general and administrative	124,257		198,388		475,017		619,274
Goodwill impairment	—		—		109,486		—
Long-lived asset impairment	—		—		22,351		—
Restructuring and related charges	20,559		(61)		61,037		(175)
Income (loss) from operations	$	(16,180)	$	4,637	$	(286,154)	$	(307)

The following table summarizes total assets by reportable segment as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Total assets:
North America (1)	$	1,071,325	$	1,045,500
International (1)	278,493		541,243
Consolidated total assets	$	1,349,818	$	1,586,743

(1)North America contains assets from the United States of $1,047.9 million and $1,020.0 million as of September 30, 2020 and December 31, 2019. International contains assets from Switzerland of $128.5 million and $175.2 million as of September 30, 2020 and December 31, 2019. There were no other individual countries that represented more than 10% of consolidated total assets as of September 30, 2020 and December 31, 2019.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes included under Part I, Item 1 of this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements about our business and operations. Our actual results may differ materially from those we currently anticipate as a result of many factors, including those we describe under Item 1A, Risk Factors and elsewhere in this Quarterly Report. See Part I, Financial Information, Forward-Looking Statements, for additional information.

Overview

Groupon is a global scaled two-sided marketplace that connects consumers to merchants. Consumers access our marketplace through our mobile applications and our websites, primarily localized groupon.com sites in many countries. We operate in two segments: North America and International. For the nine months ended September 30, 2020, we derived 60.4% of our revenue from our North America segment and 39.6% of our revenue from our International segment. See Item 1, Note 13, Segment Information, for additional information. We operate in three categories: Local, Goods and Travel.

We generate product and service revenue from our current business operations. We earn service revenue from transactions in which we earn commissions by selling goods or services in our Local, Travel and Goods Categories on behalf of third-party merchants. Service revenue from those transactions is reported on a net basis and equals the purchase price received from the customer for the offering less an agreed upon portion of the purchase price paid to the merchant. Service revenue also includes commissions that we earn when customers make purchases with retailers using digital coupons accessed through our digital properties. We earn product revenue from direct sales of merchandise inventory through our Goods category. Our product revenue from those direct sales transactions is the purchase price received from the customer.

Strategy

In February 2020 we announced a strategic plan to focus on our local experiences marketplace, which included exiting our Goods category. However, since March 2020, the COVID-19 pandemic has led to significant disruption in our business as a result of the preventative or protective actions, such as consumer restrictions and merchant closures that governments, our merchants and consumers have implemented in response to the pandemic. The negative impact of COVID-19 on our business is expected to continue at least as long as our performance is impacted by market conditions as we rely on customers' purchases of vouchers for local experiences, including events and activities, beauty and wellness, travel and dining. Recovery from the COVID-19 pandemic could be volatile given the unprecedented and continuously evolving nature of the situation. We continue to monitor the impact of COVID-19 on our business, including increases in government restrictions and the potential for colder weather in certain North America and International markets to further exacerbate negative trends.

In light of COVID-19, we continued to sell Goods on our platform instead of quickly exiting the category. We are shifting to a third-party marketplace in the Goods category and expect this transition to be substantially completed in North America by the end of 2020 and on a global basis in 2021. In a third-party marketplace model, merchants assume the responsibility for fulfillment and returns. Following this transition, we will primarily generate service revenue from our Goods category, and Goods revenue is expected to be presented on a net basis consistent with the Local and Travel categories. The change in presentation of revenue to a net basis does not impact gross profit or income generated from operations.

In August 2020, we announced our updated strategy and plan to prioritize expanding our Local inventory and modernizing our marketplace by improving the merchant and customer experiences. While both of these are important to building a successful marketplace, we believe the most critical of these is expanding Local inventory, and in the near term, we intend to dedicate a majority of our efforts and resources to inventory growth. As COVID-19 evolves, we will adjust accordingly, if needed.

Restructuring and Cost Reduction

During the nine months ended September 30, 2020 we took significant actions to improve our cash position and materially reduce our cost structure. In April 2020, the Board approved a multi-phase restructuring plan related to our previously announced strategic shift and as part of the cost cutting measures implemented in response to the impact of COVID-19 on our business.

The first phase of our restructuring actions included an overall reduction of approximately 1,300 positions globally and the exit or discontinuation of the use of certain leases and other assets by the end of 2020. The majority of the first phase of workforce reductions and impairments of our right-of-use and other long-lived assets occurred during the second quarter 2020. In the third quarter 2020, we initiated the second phase of our restructuring plan, which included additional workforce reductions and the exit of our operations in New Zealand and Japan. We expect to incur total pre-tax charges of $75.0 million to $105.0 million in connection with our multi-phase restructuring plan through the end of 2021. Once fully implemented, we expect our multi-phase restructuring plan to result in $225.0 million in annualized cost savings. During the three and nine months ended September 30, 2020, we recorded $20.6 million and $61.0 million in pre-tax charges in connection with our restructuring actions. See Note 9, Restructuring and Related Charges, for more information.

In addition to the actions described above, we have taken several steps to reduce costs, preserve cash in the near-term and improve liquidity, including, but not limited to: furloughing staff; continuing to sell Goods on our platform instead of quickly exiting the category; reducing marketing expense by significantly shortening payback thresholds and delaying brand marketing investments; transitioning merchants to redemption payment terms, instead of fixed payment terms; implementing a hiring freeze; eliminating broad-based merit increases for employees; replacing cash compensation with equity compensation in 2020 for Board members; and amending our Credit Agreement to, among other things, provide covenant relief through the first quarter of 2021.

How We Measure Our Business

We use several operating and financial metrics to assess the progress of our business and make decisions on where to allocate capital, time and technology investments. Certain of the financial metrics are reported in accordance with U.S. GAAP and certain of those metrics are considered non-GAAP financial measures. As our business evolves, we may make changes to the key financial and operating metrics that we use to measure our business. For further information and reconciliations to the most applicable financial measures under U.S. GAAP, refer to our discussion under Non-GAAP Financial Measures in the Results of Operations section.

Operating Metrics

•Gross billings is the total dollar value of customer purchases of goods and services. Gross billings is presented net of customer refunds, order discounts and sales and related taxes. The substantial majority of our service revenue transactions are comprised of sales of vouchers and similar transactions in which we collect the transaction price from the customer and remit a portion of the transaction price to the third-party merchant who will provide the related goods or services. For these transactions, gross billings differs from revenue reported in our condensed consolidated statements of operations, which is presented net of the merchant's share of the transaction price. For product revenue transactions, gross billings are equivalent to product revenue reported in our condensed consolidated statements of operations. Gross billings is an indicator of our growth and business performance as it measures the dollar volume of transactions generated through our marketplaces. Tracking gross billings on service revenue transactions also allows us to monitor the percentage of gross billings that we are able to retain after payments to merchants. However, we are focused on achieving long-term gross profit and Adjusted EBITDA growth.

•Active customers are unique user accounts that have made a purchase during the trailing twelve months ("TTM") either through one of our online marketplaces or directly with a merchant for which we earned a commission. We consider this metric to be an important indicator of our business performance as it helps us to understand how the number of customers actively purchasing our offerings is trending. Some customers could establish and make purchases from more than one account, so it is possible that our active customer metric may count certain customers more than once in a given period. For entities that we have acquired in a business combination, this metric includes active customers of the acquired entity,

32

including customers who made purchases prior to the acquisition. We do not include consumers who solely make purchases with retailers using digital coupons accessed through our websites and mobile applications in our active customer metric, nor do we include consumers who solely make purchases of our inventory through third-party marketplaces with which we partner.

•Units are the number of purchases during the reporting period, before refunds and cancellations, made either through one of our online marketplaces, a third-party marketplace, or directly with a merchant for which we earn a commission. We do not include purchases with retailers using digital coupons accessed through our websites and mobile applications in our units metric. We consider units to be an important indicator of the total volume of business conducted through our marketplaces. We report units on a gross basis prior to the consideration of customer refunds and therefore units are not always a good proxy for gross billings.

•Gross billings per unit are the gross billings generated per unit. We use this metric to evaluate trends in units and in the average contribution to gross billings on a per-unit basis.

Our gross billings, units and gross billings per unit for the three and nine months ended September 30, 2020 and 2019 were as follows (in thousands, except gross billings per unit amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Gross billings	$	597,123	$	1,093,378	$	1,986,245	$	3,390,331
Units	21,410		35,754		74,208		108,270
Gross billings per unit	$	27.89	$	30.58	$	26.77	$	31.31

Our active customers for the TTM period ended September 30, 2020 and 2019 were as follows (in thousands):

	Trailing Twelve Months Ended September 30,
	2020	2019
TTM Active Customers (in thousands)	34,154	45,258

Financial Metrics

•Revenue is currently earned through product and service revenue transactions. We earn service revenue from transactions in which we generate commissions by selling goods or services on behalf of third-party merchants. Service revenue from those transactions is reported on a net basis as the purchase price collected from the customer for the offering less an agreed upon portion of the purchase price paid to the third-party merchant. Service revenue also includes commissions we earn when customers make purchases with retailers using digital coupons accessed through our digital properties. We earn product revenue from direct sales of merchandise inventory in our Goods category and report product revenue on a gross basis as the purchase price received from the customer. Following our shift to a third-party marketplace model in the Goods category, we will primarily generate service revenue from our Goods category.

•Gross profit reflects the net margin we earn after deducting our cost of revenue from our revenue. Due to the lack of comparability between product revenue, which is reported on a gross basis, and service revenue, which primarily consists of transactions reported on a net basis, we believe that gross profit is an important measure for evaluating our performance.

•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, acquisition-related expense (benefit), net and other special charges and credits, including items that are unusual in nature or infrequently occurring. For further information and a reconciliation to net income (loss) from continuing operations, refer to our discussion under Non-GAAP Financial Measures in the Results of Operations section.

•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.

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For further information and a reconciliation to Net cash provided by (used in) operating activities from continuing operations, refer to our discussion in the Liquidity and Capital Resources section.

The following table presents the above financial metrics for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Revenue	$	304,019	$	495,612	$	1,073,815	1,606,599
Gross profit	160,022		277,940		498,495		876,088
Adjusted EBITDA	30,781		49,997		9,655		143,473
Free cash flow	(6,953)		891		(181,166)		(181,972)

Operating Expenses

•Marketing expense consists primarily of online marketing costs, such as search engine marketing, advertising on social networking sites and affiliate programs, and offline marketing costs, such as television and radio advertising. Additionally, compensation expense for marketing employees is classified within marketing expense. We record these costs within Marketing on the condensed consolidated statements of operations when incurred. From time to time, we have offerings from well-known national merchants for customer acquisition and activation purposes, for which the amount we owe the merchant for each voucher sold exceeds the transaction price paid by the customer. Our gross billings from those transactions generate no service revenue and our net cost (i.e., the excess of the amount owed to the merchant over the amount paid by the customer) is classified as marketing expense. We evaluate marketing expense as a percentage of gross profit because it gives us an indication of how well our marketing spend is driving gross profit performance.

•Selling, general and administrative ("SG&A") expenses include selling expenses such as sales commissions and other compensation expenses for sales representatives, as well as costs associated with supporting the sales function such as technology, telecommunications and travel. General and administrative expenses include compensation expense for employees involved in customer service, operations, technology and product development, as well as general corporate functions, such as finance, legal and human resources. Additional costs included in general and administrative include depreciation and amortization, rent, professional fees, litigation costs, travel and entertainment, recruiting, office supplies, maintenance, certain technology costs and other general corporate costs. We evaluate SG&A expense as a percentage of gross profit because it gives us an indication of our operating efficiency.

•Restructuring and related charges represent severance and benefit costs for workforce reductions, impairments of long-lived assets and other exit costs resulting from our restructuring activities. See Note 9, Restructuring and Related Charges, for information about our restructuring plan.

Factors Affecting Our Performance

Attracting and retaining local merchants. As we focus on our local experiences marketplace, we depend on our ability to attract and retain merchants who are willing to offer their experiences on our platform. Merchants can generally withdraw their offerings from our marketplace at any time, and their willingness to continue offering services through our marketplace depends on the effectiveness of our marketing and promotional services. Since the widespread economic impacts of COVID-19 began in March 2020, we are prioritizing opportunities to help drive demand for our merchants and highlighting offers that customers can enjoy right now. In addition to offerings that we can highlight during COVID-19, we have been able to drive demand to certain local merchants that are staying open. As we continue to navigate through the volatility of the COVID-19 recovery period, we intend to take a market by market approach to attracting and retaining local merchants.

Driving purchase frequency and retaining customers. In light of significant declines in consumer demand for local and travel services due to COVID-19, we must highlight offers that customers can enjoy right now in order to drive purchase frequency and retain customers. This includes surfacing the relevant Local inventory in each market depending on the government restrictions currently in place and continuing to leverage our Goods category in the near-term. We must also continue to improve the customer experience on our websites and

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mobile applications, launch innovative products that remove friction from the customer journey, and grow our high-quality, bookable inventory.

Increasing traffic to our websites and mobile applications. The traffic to our websites and mobile applications, including from consumers responding to our emails and search engine optimization ("SEO"), has declined in recent years, and we have experienced further declines in traffic due to the impacts of COVID-19. As such, we must focus on improving the effectiveness of our emails, as well as developing sources of traffic in addition to email and SEO and optimizing the efficiency of our marketing spending, which historically was guided by return on investment thresholds based on expected months-to-payback targets ranging from 12 to 18 months. In light of COVID-19, we significantly shortened our payback thresholds.

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Results of Operations

North America

Operating Metrics

North America segment gross billings and units for the three and nine months ended September 30, 2020 and 2019 were as follows (in thousands, except percentages and gross billings per unit):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020		2019		% Change		2020	2019		% Change
Gross billings
Service gross billings:
Local	$	230,422	$	511,173	(54.9)	%	790,486	$	1,517,312	(47.9)	%
Goods	40,299		21,300		89.2		88,713	60,833		45.8
Travel	23,373		71,144		(67.1)		68,557	247,256		(72.3)
Total service gross billings	294,094		603,617		(51.3)		947,756	1,825,401		(48.1)
Product gross billings - Goods	68,215		111,776		(39.0)		293,729	394,235		(25.5)
Total gross billings	$	362,309	$	715,393	(49.4)		1,241,485	$	2,219,636	(44.1)
Units
Local	8,148		16,332		(50.1)	%	28,151	48,773		(42.3)	%
Goods	4,428		5,080		(12.8)		15,166	16,847		(10.0)
Travel	151		355		(57.5)		542	1,187		(54.3)
Total units	12,727		21,767		(41.5)		43,859	66,807		(34.3)
Gross billings per unit	$28.47		$32.87		(13.4)	%	$28.31	$33.22		(14.8)	%

North America TTM active customers for the trailing twelve months ended September 30, 2020 were as follows (in thousands):

	Trailing Twelve Months Ended September 30,
	2020	2019	% Change
TTM Active customers	20,246	27,747	(27)	%

Comparison of the Three Months Ended September 30, 2020 and 2019:

North America gross billings and units declined by $353.1 million and 9.0 million for the three months ended September 30, 2020. TTM active customers declined by 7.5 million for the three months ended September 30, 2020. These declines were primarily due to the significant decrease in consumer demand as governmental measures were in place to control the spread of COVID-19, including quarantines, travel restrictions, as well as business restrictions and shutdowns. Gross billings per unit were adversely impacted by an increase in Local customer refunds.

Comparison of the Nine Months Ended September 30, 2020 and 2019:

North America gross billings and units declined by $978.2 million and 22.9 million for the nine months ended September 30, 2020. These declines were primarily due to the significant decrease in consumer demand as governmental measures were implemented to control the spread of COVID-19, including quarantines, travel restrictions, as well as business restrictions and shutdowns. Gross billings per unit were adversely impacted by a shift in mix of offerings sold and increase in Local customer refunds.

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Financial Metrics

North America segment revenue, cost of revenue and gross profit for the three and nine months ended September 30, 2020 and 2019 were as follows (dollars in thousands):

	Three Months Ended September 30,								Nine Months Ended September 30,
	2020			2019			% Change		2020			2019			% Change
Revenue
Service revenue
Local	$	98,561		$	175,140		(43.7)	%	$	322,945		$	532,599		(39.4)	%
Goods	8,787			3,000			192.9		18,401			9,841			87.0
Travel	4,748			13,680			(65.3)		13,722			48,746			(71.8)
Total service revenue	112,096			191,820			(41.6)		355,068			591,186			(39.9)
Product revenue - Goods	68,215			111,776			(39.0)		293,729			394,235			(25.5)
Total revenue	$	180,311		$	303,596		(40.6)		$	648,797		$	985,421		(34.2)
Cost of revenue
Service cost of revenue
Local	$	11,054		$	20,108		(45.0)	%	$	39,941		$	58,812		(32.1)	%
Goods	1,347			720			87.1		3,550			2,003			77.2
Travel	874			2,963			(70.5)		3,996			9,955			(59.9)
Total service cost of revenue	13,275			23,791			(44.2)		47,487			70,770			(32.9)
Product cost of revenue - Goods	57,319			87,730			(34.7)		246,130			314,190			(21.7)
Total cost of revenue	$	70,594		$	111,521		(36.7)		$	293,617		$	384,960		(23.7)
Gross profit
Service gross profit
Local	$	87,507		$	155,032		(43.6)	%	$	283,004		$	473,787		(40.3)	%
Goods	7,440			2,280			226.3		14,851			7,838			89.5
Travel	3,874			10,717			(63.9)		9,726			38,791			(74.9)
Total service gross profit	98,821			168,029			(41.2)		307,581			520,416			(40.9)
Product gross profit - Goods	10,896			24,046			(54.7)		47,599			80,045			(40.5)
Total gross profit	$	109,717		$	192,075		(42.9)		$	355,180		$	600,461		(40.8)
Service margin (1)	38.1		%	31.8		%			37.5		%	32.4		%
% of Consolidated revenue	59.3		%	61.3		%			60.4		%	61.3		%
% of Consolidated cost of revenue	49.0			51.2					51.0			52.7
% of Consolidated gross profit	68.6			69.1					71.3			68.5

(1)     Represents the percentage service gross billings that we retained after deducting the merchant's share from revenue.

Comparison of the Three Months Ended September 30, 2020 and 2019:

North America revenue and gross profit decreased by $123.3 million and $82.4 million for the three months ended September 30, 2020. Those decreases were primarily driven by a decline in gross billings and transaction volume due to the impacts of COVID-19. Revenue also declined due to the ongoing transition of Goods to a third party marketplace model. In a third party marketplace model, we generate service revenue which is presented on a net basis. The increase in service margin was due to a shift in mix of offerings sold and higher variable consideration from unredeemed vouchers due to our shift towards payment on redemption terms in North America.

Cost of revenue decreased by $40.9 million for the three months ended September 30, 2020 primarily due to the decrease in transaction volume and gross billings and the impacts of the ongoing transition of Goods to a third party marketplace model.

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Comparison of the Nine Months Ended September 30, 2020 and 2019:

North America revenue and gross profit decreased by $336.6 million and $245.3 million for the nine months ended September 30, 2020. Those decreases were primarily driven by a decline in gross billings and transaction volume due to the impacts of COVID-19. The increase in service margin was due to a shift in mix of offerings sold and higher variable consideration from unredeemed vouchers due to our shift towards payment on redemption terms in North America. Revenue also declined due to the ongoing transition of Goods to a third party marketplace model. In a third party marketplace model, we generate service revenue which is presented on a net basis.

Cost of revenue decreased by $91.3 million for the nine months ended September 30, 2020 primarily due to the decrease in transaction volume and gross billings and the impacts of the ongoing transition of Goods to a third party marketplace model.

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Marketing and Contribution Profit

We define contribution profit as gross profit less marketing expense. North America contribution profit for the three and nine months ended September 30, 2020 and 2019 was as follows (dollars in thousands):

	Three Months Ended September 30,								Nine Months Ended September 30,
	2020			2019			% Change		2020			2019			% Change
Marketing	$	19,718		$	45,223		(56.4)	%	$	73,203		$	162,132		(54.8)	%
% of Gross profit:	18.0		%	23.5		%			20.6		%	27.0		%
Contribution profit	$	89,999		$	146,852		(38.7)%		$	281,977		$	438,329		(35.7)%

Comparison of the Three Months Ended September 30, 2020 and 2019:

North America marketing expense and marketing expense as a percentage of gross profit declined for the three months ended September 30, 2020 due to accelerated traffic declines, significantly shortened payback thresholds and lower investment in our offline marketing and brand spend in light of COVID-19.

The decline in our North America contribution profit for the three months ended September 30, 2020 was primarily attributable to a $82.4 million decrease in gross profit, as discussed above, partially offset by a $25.5 million decrease in marketing.

Comparison of the Nine Months Ended September 30, 2020 and 2019:

North America marketing expense and marketing expense as a percentage of gross profit declined for the nine months ended September 30, 2020 due to accelerated traffic declines, significantly shortened payback thresholds and lower investment in our offline marketing and brand spend in light of COVID-19.

The decline in our North America contribution profit for the nine months ended September 30, 2020 was primarily attributable to a $245.3 million decrease in gross profit, as discussed above, partially offset by a $88.9 million decrease in marketing.

International

Operating Metrics

International segment gross billings and units for the three and nine months ended September 30, 2020 and 2019 were as follows (in thousands, except percentages and gross billings per unit):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020		2019		% Change		2020		2019		% Change
Gross billings
Service gross billings:
Local	$	113,105	$	204,823	(44.8)	%	$	332,403	$	615,669	(46.0)	%
Goods	15,151		13,308		13.8		45,322		34,787		30.3
Travel	25,827		44,098		(41.4)		61,427		139,385		(55.9)
Total service gross billings	154,083		262,229		(41.2)		439,152		789,841		(44.4)
Product gross billings - Goods	80,731		115,756		(30.3)		305,608		380,854		(19.8)
Total gross billings	$	234,814	$	377,985	(37.9)		$	744,760	$	1,170,695	(36.4)
Units
Local	4,171		8,241		(49.4)	%	13,217		23,814		(44.5)	%
Goods	4,320		5,415		(20.2)		16,627		16,616		0.1
Travel	192		331		(42.0)		505		1,033		(51.1)
Total units	8,683		13,987		(37.9)		30,349		41,463		(26.8)
Gross billings per unit	$27.04		$27.02		0.1	%	$24.54		$28.23		(13.1)	%

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International TTM active customers for the trailing twelve months ended September 30, 2020 were as followings (in thousands):

	Trailing Twelve Months Ended September 30,
	2020	2019	% Change
TTM Active customers	13,908	17,511	(20.6)	%

Comparison of the Three Months Ended September 30, 2020 and 2019:

International gross billings and units decreased by $143.2 million and 5.3 million for the three months ended September 30, 2020. TTM active customers declined by 3.6 million for the three months ended September 30, 2020. These declines were primarily due to the significant decrease in consumer demand as governmental measures were implemented to control the spread of COVID-19, including quarantines, travel restrictions, as well as business restrictions and shutdowns. The decline in gross billings was partially offset by a $13.2 million favorable impact from year-over-year changes in foreign currency exchange rates.

Comparison of the Nine Months Ended September 30, 2020 and 2019:

International gross billings and units decreased by $425.9 million and 11.1 million for the nine months ended September 30, 2020. These declines were primarily due to the significant decrease in consumer demand as governmental measures were implemented to control the spread of COVID-19, including quarantines, travel restrictions, as well as business restrictions and shutdowns, and a decline in gross billings per unit due to a shift in mix of offerings sold and an increase in Local customer refunds. The decline in gross billings was partially offset by an $11.2 million favorable impact from year-over-year changes in foreign currency exchange rates.

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Financial Metrics

International segment revenue, cost of revenue and gross profit for the three and nine months ended September 30, 2020 and 2019 were as follows (dollars in thousands):

	Three Months Ended September 30,								Nine Months Ended September 30,
	2020			2019			% Change		2020			2019			% Change
Revenue
Service revenue:
Local	$	36,528		$	65,440		(44.2)	%	$	103,221		$	208,625		(50.5)	%
Goods	3,309			2,817			17.5		8,821			6,882			28.2
Travel	3,140			8,003			(60.8)		7,368			24,817			(70.3)
Total service revenue	42,977			76,260			(43.6)		119,410			240,324			(50.3)
Product revenue - Goods	80,731			115,756			(30.3)		305,608			380,854			(19.8)
Total revenue	$	123,708		$	192,016		(35.6)		$	425,018		$	621,178		(31.6)
Cost of revenue
Service cost of revenue:
Local	$	2,841		$	4,257		(33.3)	%	$	10,167		$	12,684		(19.8)	%
Goods	460			228			101.8		1,399			641			118.3
Travel	429			671			(36.1)		1,109			2,074			(46.5)
Total service revenue	3,730			5,156			(27.7)		12,675			15,399			(17.7)
Product cost of revenue - Goods	69,673			100,995			(31.0)		269,028			330,152			(18.5)
Total cost of revenue	$	73,403		$	106,151		(30.9)		$	281,703		$	345,551		(18.5)
Gross profit
Service gross profit:
Local	$	33,687		$	61,183		(44.9)	%	$	93,054		$	195,941		(52.5)	%
Goods	2,849			2,589			10.0		7,422			6,241			18.9
Travel	2,711			7,332			(63.0)		6,259			22,743			(72.5)
Total service gross profit	39,247			71,104			(44.8)		106,735			224,925			(52.5)
Product gross profit - Goods	11,058			14,761			(25.1)		36,580			50,702			(27.9)
Total gross profit	$	50,305		$	85,865		(41.4)		$	143,315		$	275,627		(48.0)
Service margin (1)	27.9		%	29.1		%			27.2		%	30.4		%
% of Consolidated revenue	40.7		%	38.7		%			39.6		%	38.7		%
% of Consolidated cost of revenue	51.0			48.8					49.0			47.3
% of Consolidated gross profit	31.4			30.9					28.7			31.5

(1)     Represents the percentage of service gross billings that we retained after deducting the merchant's share from revenue.

Comparison of the Three Months Ended September 30, 2020 and 2019

International revenue and gross profit decreased by $68.3 million and $35.6 million for the three months ended September 30, 2020. Those decreases were primarily driven by a decline in gross billings due to the impacts of COVID-19 as discussed above and the decline in International revenue was also impacted by a decline in Goods product revenue, which is presented on a gross basis. The decreases in revenue and gross profit were partially offset by favorable impacts of $7.0 million and $2.8 million from year-over-year changes in foreign currency exchange rates.

Cost of revenue decreased by $32.7 million for the three months ended September 30, 2020 primarily due to the decrease in transaction volume and gross billings, partially offset by a $4.2 million unfavorable impact from year-over-year changes in foreign currency exchange rates.

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Comparison of the Nine Months Ended September 30, 2020 and 2019:

International revenue and gross profit decreased by $196.2 million and $132.3 million for the nine months ended September 30, 2020. Those decreases were primarily driven by a decline in gross billings due to the impacts of COVID-19 as discussed above and the decline in International revenue was also impacted by a decline in Goods product revenue, which is presented on a gross basis. The decreases in revenue and gross profit were partially offset by favorable impacts of $5.8 million and $2.6 million from year-over-year changes in foreign currency exchange rates.

Cost of revenue decreased by $63.8 million for the nine months ended September 30, 2020 primarily due to the decrease in transaction volume and gross billings, partially offset by a $3.2 million unfavorable impact from year-over-year changes in foreign currency exchange rates.

Marketing and Contribution Profit

International marketing and contribution profit for the three and nine months ended September 30, 2020 and 2019 was as follows (dollars in thousands):

	Three Months Ended September 30,								Nine Months Ended September 30,
	2020			2019			% Change		2020			2019			% Change
Marketing	$	11,668		$	29,753		(60.8)	%	$	43,555		$	95,164		(54.2)	%
% of Gross profit:	23.2		%	34.7		%			30.4		%	34.5		%
Contribution profit	$	38,637		$	56,112		(31.1)	%	$	99,760		$	180,463		(44.7)	%

Comparison of the Three Months Ended September 30, 2020 and 2019:

International marketing expense and marketing expense as a percentage of gross profit declined for the three months ended September 30, 2020 due to accelerated traffic declines, significantly shortened payback thresholds and lower investment in our offline marketing and brand spend in light of COVID-19, partially offset by a $0.6 million unfavorable impact from year-over-year changes in foreign currency exchange rates.

The decrease in International contribution profit for the three months ended September 30, 2020 was primarily attributable to a $35.6 million decrease in gross profit, partially offset by a $18.1 million decrease in marketing.

Comparison of the Nine Months Ended September 30, 2020 and 2019:

International marketing expense and marketing expense as a percentage of gross profit declined for the nine months ended September 30, 2020 due to accelerated traffic declines, significantly shortened payback thresholds and lower investment in our offline marketing and brand spend in light of COVID-19, partially offset by a $0.4 million unfavorable impact from year-over-year change in foreign currency exchange rates.

The decrease in International contribution profit for the nine months ended September 30, 2020 was primarily attributable to a $132.3 million decrease in gross profit, partially offset by a $51.6 million decrease in marketing.

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Operating Expenses

Operating expenses for the three and nine months ended September 30, 2020 and 2019 were as follows (dollars in thousands):

	Three Months Ended September 30,								Nine Months Ended September 30,
	2020			2019			% Change		2020			2019			% Change
Marketing	$	31,386		$	74,976		(58.1)	%	$	116,758		$	257,296		(54.6)	%
Selling, general and administrative	124,257			198,388			(37.4)		475,017			619,274			(23.3)
Goodwill impairment	—			—			—		109,486			—			—
Long-lived asset impairment	—			—			—		22,351			—			—
Restructuring and related charges	20,559			(61)			NM		61,037			(175)			NM
Total Operating expenses	$	176,202		$	273,303		(35.5)	%	$	784,649		$	876,395		(10.5)	%
% of Gross profit:
Marketing	19.6		%	27.0		%			23.4		%	29.4		%
Selling, general and administrative	77.6		%	71.4		%			95.3		%	70.7		%

Comparison of the Three Months Ended September 30, 2020 and 2019:

Marketing expense and marketing expense as a percentage of gross profit declined for the three months ended September 30, 2020 due to accelerated traffic declines, significantly shortened payback thresholds and lower investment in our offline marketing and brand spend in light of COVID-19, partially offset by a $0.6 million unfavorable impact from year-over-year change in foreign currency exchange rates.

SG&A decreased for the three months ended September 30, 2020 primarily due to lower payroll-related expenses due to furloughs and restructuring actions, partially offset by a $2.2 million unfavorable impact from year-over-year changes in foreign currency exchange rates. SG&A as a percentage of gross profit increased for the three months ended September 30, 2020 due to the decline in demand and traffic as a result of COVID-19.

Restructuring and related charges for the three months ended September 30, 2020 represent severance and benefit costs for workforce reductions, impairments of long-lived assets and lease terminations and other exit costs resulting from our restructuring activities. See Note 9, Restructuring and Related Charges, for more information.

Comparison of the Nine Months Ended September 30, 2020 and 2019:

Marketing expense and marketing expense as a percentage of gross profit declined for the nine months ended September 30, 2020 due to accelerated traffic declines, significantly shortened payback thresholds and lower investment in our offline marketing and brand spend in light of COVID-19, partially offset by a $0.4 million unfavorable impact from year-over-year change in foreign currency rates.

SG&A decreased for the nine months ended September 30, 2020 primarily due to lower payroll-related expenses due to furloughs and restructuring actions, partially offset by a $1.2 million unfavorable impact from year-over-year changes in foreign currency exchange rates. SG&A as a percentage of gross profit increased for the nine months ended September 30, 2020 due to the decline in demand and traffic as a result of COVID-19.

During the first quarter 2020, we performed an interim quantitative assessment of goodwill and long-lived assets as a result of significant deterioration in our financial performance due to the impact of COVID-19. As a result, we recognized goodwill impairment of $109.5 million, that represented the excess of the EMEA reporting unit's carrying value over its fair value, and long-lived asset impairment of $22.4 million for the nine months ended September 30, 2020. See Note 2, Goodwill and Long-Lived Assets, for additional information about goodwill and long-lived asset impairments.

Restructuring and related charges for the nine months ended September 30, 2020 represent severance and benefit costs for workforce reductions, impairments of long-lived assets and lease terminations and other exit costs resulting from our restructuring activities. See Note 9, Restructuring and Related Charges, for more information.

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Other Income (Expense), Net

Other income (expense), net includes interest income, interest expense, gains and losses on fair value option investments, adjustments for observable price changes of investments, impairments of investments and foreign currency gains and losses, primarily resulting from intercompany balances with our subsidiaries that are denominated in foreign currencies.

Other income (expense), net for the three and nine months ended September 30, 2020 and 2019 was as follows (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Interest income	$	1,268	$	1,959	$	5,254	$	5,810
Interest expense	(9,408)		(6,029)		(24,375)		(17,162)
Changes in fair value of investments	—		14		(1,405)		(68,971)
Foreign currency gains (losses), net	7,273		(13,197)		5,661		(12,279)
Impairment of investment	—		—		(6,684)		—
Other income (expense), net	$	(867)	$	(17,253)	$	(21,549)	$	(92,602)

Comparison of the Three Months Ended September 30, 2020 and 2019:

The change in Other income (expense), net for the three months ended September 30, 2020 as compared with the prior year period is primarily related to a change in foreign currency gains and losses of $20.5 million, partially offset by a $3.4 million increase in interest expense.

Comparison of the Nine Months Ended September 30, 2020 and 2019:

The change in Other income (expense), net for the nine months ended September 30, 2020 as compared with the prior year period is primarily related to a $67.6 million decrease in losses from changes in our fair value of investments and a change in foreign currency gains and losses of $17.9 million, partially offset by a $6.7 million impairment of an other equity investment and a $7.2 million increase in interest expense.

Provision (Benefit) for Income Taxes

Provision (benefit) for income taxes for the three and nine months ended September 30, 2020 and 2019 was as follows (dollars in thousands):

	Three Months Ended September 30,								Nine Months Ended September 30,
	2020			2019			% Change		2020			2019			% Change
Provision (benefit) for income taxes	$	(486)		$	2,069		(123.5)	%	$	(7,170)		$	591		(1,313.2)	%
Effective tax rate	2.9		%	(16.4)		%			2.3		%	(0.6)		%

Comparison of the Three Months Ended September 30, 2020 and 2019:

Our U.S. federal income tax rate is 21%. The primary factors impacting the effective tax rate for the three months ended September 30, 2020 and 2019 were the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets. We expect that our consolidated effective tax rate in future periods will continue to differ significantly from the U.S. federal income tax rate as a result of our tax obligations in jurisdictions with profits and valuation allowances in jurisdictions with losses. See Note 10, Income Taxes, for additional information relating to tax audits and assessments and regulatory and legal developments that may impact our business and results of operations in the future.

Comparison of the Nine Months Ended September 30, 2020 and 2019:

The primary factors impacting the effective tax rate for the nine months ended September 30, 2020 and 2019 were the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets and the reversals of reserves for uncertain tax positions due to the closure of tax audits. The nine months ended September 30, 2020 were also impacted by the carryback of federal net operating losses due to the

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income tax relief provided by the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). We expect that our consolidated effective tax rate in future periods will continue to differ significantly from the U.S. federal income tax rates as a result of our tax obligations in jurisdictions with profits and valuation allowances in jurisdictions with losses. See Note 10, Income Taxes, for additional information relating to tax audits and assessments and regulatory and legal developments that may impact our business and result of operations in the future.

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Non-GAAP Financial Measures

In addition to financial results reported in accordance with U.S. GAAP, we have provided the following non-GAAP financial measures: Adjusted EBITDA, free cash flow and foreign currency exchange rate neutral operating results. Those non-GAAP financial measures, which are presented on a continuing operations basis, are intended to aid investors in better understanding our current financial performance and prospects for the future as seen through the eyes of management. We believe that those non-GAAP financial measures facilitate comparisons with our historical results and with the results of peer companies who present similar measures (although other companies may define non-GAAP measures differently than we define them, even when similar terms are used to identify such measures). However, those non-GAAP financial measures are not intended to be a substitute for those reported in accordance with U.S. GAAP.

Adjusted EBITDA. Adjusted EBITDA is a non-GAAP performance measure that we define as net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, acquisition-related expense (benefit), net and other special charges and credits, including items that are unusual in nature or infrequently occurring. Our definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key measure used by our management and Board of Directors to evaluate operating performance, generate future operating plans and make strategic decisions for the allocation of capital. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors. However, Adjusted EBITDA is not intended to be a substitute for income (loss) from continuing operations.

We exclude stock-based compensation expense and depreciation and amortization because they are primarily non-cash in nature and we believe that non-GAAP financial measures excluding those items provide meaningful supplemental information about our operating performance and liquidity. 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. For the three and nine months ended September 30, 2020 and 2019, special charges and credits included charges related to our restructuring plan, goodwill and long-lived asset impairments, and strategic advisor costs. We exclude special charges and credits from Adjusted EBITDA because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons with our historical results.

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The following is a reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, Income (loss) from continuing operations for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Income (loss) from continuing operations	$	(16,561)	$	(14,685)	$	(300,533)	$	(93,500)
Adjustments:
Stock-based compensation	8,379		19,543		30,937		62,517
Depreciation and amortization	18,023		25,873		68,366		81,405
Acquisition-related expense (benefit), net	—		5		6		33
Restructuring and related charges (1)	20,559		(61)		61,037		(175)
Goodwill impairment	—		—		109,486		—
Long-lived asset impairment	—		—		22,351		—
Strategic advisor costs	—		—		3,626		—
Other (income) expense, net	867		17,253		21,549		92,602
Provision (benefit) for income taxes	(486)		2,069		(7,170)		591
Total adjustments	47,342		64,682		310,188		236,973
Adjusted EBITDA	$	30,781	$	49,997	$	9,655	$	143,473

(1)Restructuring and related charges includes $3.3 million and $17.2 million of long-lived asset impairments for the three and nine months ended September 30, 2020 and $0.3 million and $1.7 million of additional stock-based compensation for the three and nine months ended September 30, 2020.

Free cash flow. Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by operating activities from continuing operations less purchases of property and equipment and capitalized software. We use free cash flow to conduct and evaluate our business because, although it is similar to cash flow from continuing operations, we believe that it typically represents a more useful measure of cash flows because purchases of fixed assets, software developed for internal use and website development costs are necessary components of our ongoing operations. Free cash flow is not intended to represent the total increase or decrease in our cash balance for the applicable period.

Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. For example, free cash flow does not include cash payments for business acquisitions. In addition, free cash flow reflects the impact of the timing difference between when we are paid by customers and when we pay merchants and suppliers. Therefore, we believe it is important to view free cash flow as a complement to our entire condensed consolidated statements of cash flows. For a reconciliation of free cash flow to the most comparable U.S. GAAP financial measure, see Liquidity and Capital Resources below.

Foreign currency exchange rate neutral operating results. Foreign currency exchange rate neutral operating results show current period operating results as if foreign currency exchange rates had remained the same as those in effect in the prior year period. Those measures are intended to facilitate comparisons to our historical performance.

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The following table represents the effect on our condensed consolidated statements of operations from changes in exchange rates versus the U.S. dollar for the three and nine months ended September 30, 2020 (in thousands):

	Three Months Ended September 30, 2020
	At Avg. Q3 2019 Rates (1)		Exchange Rate Effect (2)		As Reported
Gross billings	$	583,887	$	13,236	$	597,123
Revenue	296,982		7,037		304,019
Cost of revenue	139,811		4,186		143,997
Gross profit	157,171		2,851		160,022
Marketing	30,767		619		31,386
Selling, general and administrative	122,017		2,240		124,257
Income (loss) from operations	(15,317)		(863)		(16,180)

	Nine Months Ended September 30, 2020
	At Avg. Q3 2019 Rates (1)		Exchange Rate Effect (2)		As Reported
Gross billings	$	1,975,069	$	11,176	$	1,986,245
Revenue	1,068,009		5,806		1,073,815
Cost of revenue	572,083		3,237		575,320
Gross profit	495,926		2,569		498,495
Marketing	116,319		439		116,758
Selling, general and administrative	473,860		1,157		475,017
Income (loss) from operations	(288,989)		2,835		(286,154)

(1)     Represents the financial statement balances that would have resulted had exchange rates in the reporting period been the same as those in effect in the prior year period.

(2)     Represents the increase or decrease in the reported amount resulting from changes in exchange rates from those in effect in the prior year period.

Liquidity and Capital Resources

Our principal sources of liquidity are cash flows from operations and cash balances, which primarily consisted of bank deposits and government money market funds. As of September 30, 2020, cash balances, including outstanding borrowings under the Credit Agreement, were $779.0 million.

Our net cash flows from operating, investing and financing activities from continuing operations for the three and nine months ended September 30, 2020 and 2019 were as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Cash provided by (used in):
Operating activities	$	4,792	$	18,584	$	(144,504)	$	(130,118)
Investing activities	(12,469)		(19,541)		(8,473)		(54,891)
Financing activities	(3,617)		(22,595)		180,557		(81,953)

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Our free cash flow for the three and nine months ended September 30, 2020 and 2019 and a reconciliation to the most comparable U.S. GAAP financial measure, Net cash provided by (used in) operating activities from continuing operations, for those periods are as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net cash provided by (used in) operating activities from continuing operations	$	4,792	$	18,584	$	(144,504)	$	(130,118)
Purchases of property and equipment and capitalized software from continuing operations	(11,745)		(17,693)		(36,662)		(51,854)
Free cash flow	$	(6,953)	$	891	$	(181,166)	$	(181,972)

Our revenue-generating transactions are primarily structured such that we collect cash up-front from customers and pay third-party merchants at a later date, either based on a fixed payment schedule or upon the customer's redemption of the related voucher. For merchants on fixed payment terms, we remit payments on an ongoing basis, generally bi-weekly, throughout the term of the merchant's offering. For purchases of merchandise inventory, our supplier payment terms generally range from net 30 to net 60 days. We have historically primarily paid merchants on fixed payment terms in North America and upon voucher redemption internationally. In prior periods, we began to increase our use of redemption payment terms with our North America merchants, and in the third quarter 2020, we accelerated these efforts and largely completed the transition to redemption payment terms.

Our cash balances fluctuate significantly throughout the year based on many variables, including gross billings growth rates, the timing of payments to merchants and suppliers, seasonality and the mix of transactions between Goods and Local. For example, we have historically generated strong cash inflows during the fourth quarter holiday season, followed by significant cash outflows in the following period when payments are made to merchants and suppliers.

For the nine months ended September 30, 2020, our net cash used in operating activities from continuing operations was $144.5 million, as compared with a $300.5 million net loss from continuing operations. That difference is primarily due to $267.3 million of non-cash items, including $109.5 million of goodwill impairment, $22.4 million of long-lived asset impairments, $17.2 million of restructuring-related impairments, depreciation and amortization and stock-based compensation, partially offset by a $111.2 million net decrease from changes in working capital and other assets and liabilities. The working capital impact was related to the seasonal timing of payments to inventory suppliers and the impact of COVID-19.

For the nine months ended September 30, 2019, our net cash used in operating activities from continuing operations was $130.1 million, as compared with a $93.5 million net loss from continuing operations. That difference was primarily due to $223.5 million of non-cash items, including depreciation and amortization, stock-based compensation and a $69.4 million loss from changes in fair value of our investment in Monster LP, partially offset by a $260.1 million decrease from changes in working capital and other assets and liabilities. The working capital impact was primarily related to the seasonal timing of payments to inventory suppliers and to a lesser extent a reduction in gross billings.

For the nine months ended September 30, 2020, our net cash used in investing activities from continuing operations was $8.5 million. Our net cash used in investing activities from continuing operations included purchases of property and equipment and capitalized software of $36.7 million, which was partially offset by proceeds from the sale of an investment of $31.6 million.

For the nine months ended September 30, 2019, our net cash used in investing activities from continuing operations was $54.9 million. Our net cash used in investing activities included purchases of property and equipment and capitalized software of $51.9 million.

For the nine months ended September 30, 2020, our net cash provided by financing activities was $180.6 million. Our net cash provided by financing activities included $200.0 million of borrowings under our revolving credit facility, partially offset by $8.8 million in taxes paid related to net share settlements of stock-based compensation awards, $7.4 million in payments of finance lease obligations and $3.0 million of distributions to noncontrolling interest holders.

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For the nine months ended September 30, 2019, our net cash used in financing activities was $82.0 million. Our net cash used in financing activities included $44.2 million in repurchases of common stock under our share repurchase program, $16.9 million in payments of finance lease obligations and $14.0 million in taxes paid related to net share settlements of stock-based compensation awards.

On July 17, 2020, we entered into an amendment of our Credit Agreement in order to, among other things, provide us operational flexibility and covenant relief through the end of the first quarter 2021 in light of the ongoing impacts of COVID-19 on our business. The Amended Credit Agreement provides for aggregate principal borrowings of up to $225.0 million and matures in May 2024. As of September 30, 2020, we had $200.0 million of borrowings and $20.6 million of letters of credit outstanding under the Credit Agreement. See Note 5, Financing Arrangements, for additional information.

We believe that our cash balances, excluding borrowings under the Amended Credit Agreement, and cash generated from operations will be sufficient to meet our working capital requirements and capital expenditures for at least the next 12 months. However, we expect a net loss and negative operating cash flows for the year ended December 31, 2020. We plan to continue to actively manage and optimize our cash balances and liquidity, working capital and operating expenses, although there can be no assurances that we will be able to do so. We have taken several steps to reduce costs and preserve cash in the near-term as described above in Overview.

As of September 30, 2020, we had $112.2 million in cash held by our international subsidiaries, which is primarily denominated in Euros, British Pounds Sterling, Canadian dollars, and, to a lesser extent, Australian dollars and Japanese yen. In general, it is our practice and intention to re-invest the earnings of our non-U.S. subsidiaries in those operations. We have not, nor do we anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business.

In May 2018, the Board authorized us to repurchase up to $300.0 million of our common stock under our share repurchase program. As of September 30, 2020, up to $245.0 million of common stock remained available for purchase under our program. The timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under the Amended Credit Agreement, share price, available cash and other factors, and the program may be terminated at any time. Repurchases will be made in compliance with SEC rules and other legal requirements and may be made, in part, under a Rule 10b5-1 plan, which permits share repurchases when we might otherwise be precluded from doing so.

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Contractual Obligations and Commitments

Our contractual obligations and commitments as of September 30, 2020 did not materially change from the amounts set forth in our 2019 Annual Report on Form 10-K, except as disclosed in Note 6, Commitments and Contingencies.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2020.

Critical Accounting Policies and Estimates

The preparation of condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts and classifications of assets and liabilities, revenue and expenses, and related disclosure of contingent liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. Our significant accounting policies are discussed in Item 2, Note 2, Summary of Significant Accounting Policies in our Annual Report on Form 10-K for the year ended December 31, 2019. In addition, refer to the critical accounting policies and estimates under Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2019.

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Recently Issued Accounting Standards

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes. This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The ASU will be effective for annual reporting periods beginning after December 15, 2020 and interim periods within those annual periods and early adoption is permitted. We believe that the adoption of this guidance will not have a material impact on our condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments. This ASU amends a wide variety of Topics in the Codification, including Fair Value Option measurement and disclosures, revolving-debt arrangements and allowance for credit losses related to leases. The ASU will be effective for annual reporting periods beginning after December 15, 2020 and interim periods within those annual periods and early adoption is permitted. We are still assessing the impact of ASU 2020-03 on our condensed consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity's own equity, and also improves and amends the related EPS guidance for both Subtopics. The ASU will be effective for annual reporting periods after December 15, 2021 and interim periods within those annual periods and early adoption is permitted. We are still assessing the impact of ASU 2020-06 on our condensed consolidated financial statements.

There are no other accounting standards that have been issued but not yet adopted that are expected to have a material impact on our condensed consolidated financial statements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of our business, including the effect of foreign currency fluctuations, interest rate changes and inflation. Information relating to quantitative and qualitative disclosures about these market risks is set forth below.

Foreign Currency Exchange Risk

We transact business in various foreign currencies other than the U.S. dollar, principally the euro, British pound sterling, Canadian dollar and Australian dollar, which exposes us to foreign currency risk. For the three and nine months ended September 30, 2020, we derived approximately 40.7% and 39.6% of our revenue from our International segment. Revenue and related expenses generated from our international operations are generally denominated in the local currencies of the corresponding countries. The functional currencies of our subsidiaries that either operate or support these markets are generally the same as the corresponding local currencies. However, the results of operations of, and certain of our intercompany balances associated with, our international operations are exposed to foreign currency exchange rate fluctuations. Upon consolidation, as exchange rates vary, our revenue and other operating results may differ materially from expectations, and we may record significant gains or losses on the re-measurement of intercompany balances.

We assess our foreign currency exchange risk based on hypothetical changes in rates utilizing a sensitivity analysis that measures the potential impact on working capital based on a 10% change (increase and decrease) in currency rates. We use a current market pricing model to assess the changes in the value of the U.S. dollar on foreign currency denominated monetary assets and liabilities. The primary assumption used in this model is a hypothetical 10% weakening or strengthening of the U.S. dollar against those currency exposures as of September 30, 2020 and December 31, 2019.

As of September 30, 2020, our net working capital deficit (defined as current assets less current liabilities) from subsidiaries that are subject to foreign currency translation risk was $104.9 million. The potential increase in this working capital deficit from a hypothetical 10% adverse change in quoted foreign currency exchange rates would be $10.5 million. This compares with a $69.2 million working capital deficit subject to foreign currency exposure as of December 31, 2019, for which a 10% adverse change would have resulted in a potential increase in this working capital deficit of $6.9 million.

Interest Rate Risk

Our cash balance as of September 30, 2020 consists of bank deposits and government money market funds, so exposure to market risk for changes in interest rates is limited. In April 2016, we issued convertible notes with an aggregate principal amount of $250.0 million (see Item 1, Note 5, Financing Arrangements). The convertible notes bear interest at a fixed rate, so we have no financial statement impact from changes in interest rates. However, changes in market interest rates impact the fair value of the convertible notes along with other variables such as our credit spreads and the market price and volatility of our common stock. In June 2020, we entered into the Amended Credit Agreement which provides for aggregate principal borrowings of up to $225.0 million. As of September 30, 2020, we had $200.0 million of borrowings outstanding and $20.6 million of outstanding letters of credit under the Amended Credit Agreement. See Item 2, Liquidity and Capital Resources for additional information. Because borrowings under the Amended Credit Agreement bear interest at a variable rate, we are exposed to market risk relating to changes in interest rates if we borrow under the Amended Credit Agreement. We also had $133.3 million of lease obligations as of September 30, 2020. Interest rates on existing leases typically do not change unless there is a modification to a lease agreement and as such, we do not believe that the interest rate risk on the lease obligations is significant.

Impact of Inflation

We believe that our results of operations are not materially impacted by moderate changes in the inflation rate. Inflation and changing prices did not have a material effect on our business, financial condition or results of operations for the three and nine months ended September 30, 2020.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q.

Based on this evaluation, our management concluded that, as of September 30, 2020, our disclosure controls and procedures are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal controls over financial reporting as a result of COVID-19 and related restrictions. We are continually monitoring and assessing the impact COVID-19 pandemic and related restrictions has on our internal controls to minimize the effect on their design and operating effectiveness.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, please see Item 1, Note 6, Commitments and Contingencies, to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A, Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2019, and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities

During the three months ended September 30, 2020, we did not issue any unregistered equity securities.

Issuer Purchases of Equity Securities

On May 7, 2018, the Board authorized us to repurchase up to $300.0 million of our common stock under our share repurchase program. As of September 30, 2020, up to $245.0 million of common stock remained available for purchase under our program. The timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under the Amended Credit Agreement, share price, available cash and other factors, and the share repurchase program may be terminated at any time. We will fund the repurchases, if any, through cash on hand, future cash flows and borrowings under our credit facility. Repurchases will be made in compliance with SEC rules and other legal requirements and may be made in part under a Rule 10b5-1 plan, which permits share repurchases when we might otherwise be precluded from doing so. See Item 1, Note 7, Stockholders' Equity and Compensation Arrangements, for information regarding our share repurchase program.

The following table provides information about purchases of shares of our common stock during the three months ended September 30, 2020 related to shares withheld upon vesting of restricted stock units for minimum tax withholding obligations:

Date	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under Program
July 1-31, 2020	4,533	$	16.99	—	—
August 1-31, 2020	16,235	23.59		—	—
September 1-30, 2020	17,518	31.74		—	—
Total	38,286	$	26.54	—	—

(1)Total number of shares delivered to us by employees to satisfy the mandatory tax withholding requirement upon vesting of stock-based compensation awards.

ITEM 5. OTHER INFORMATION

On November 4, 2020, Groupon, Inc. (the “Company”) entered into an amendment (the “Amendment”) to the Rights Agreement (the “Rights Agreement”) dated as of April 10, 2020, between the Company and Computershare Trust Company, N.A., as rights agent. The Amendment removes the provisions pertaining to persons “acting in concert” from the Rights Agreement. The foregoing description of the Amendment is qualified in its entirety by reference to the Amendment, a copy of which is attached hereto as Exhibit 4.1 and is incorporated herein by reference.

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ITEM 6. EXHIBITS

Exhibit Number	Description
4.1	Amendment No. 1 to Rights Agreement, dated as of November 4, 2020, between Groupon, Inc. and Computershare Trust Company, N.A. as Rights Agent.
31.1	Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS **	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104 **	Cover Page Interactive Data File

_____________________________________

** The XBRL Instance Document and Cover Page Interactive Data File do not appear in the Interactive Data File because their XBRL tags are embedded within the Inline XBRL document

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 5th day of November 2020.

GROUPON, INC.
By:	/s/ Melissa Thomas
	Name:	Melissa Thomas
	Title:	Chief Financial Officer

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EX-4.1

AMENDMENT NO. 1 TO RIGHTS AGREEMENT

This Amendment No. 1 to Rights Agreement (this “Amendment”), dated as of November 4, 2020, between Groupon, Inc., a Delaware corporation (the “Company”), and Computershare Trust Company, N.A., as Rights Agent (the “Rights Agent”), amends that certain Rights Agreement, dated as of April 10, 2020, by and between the Company and the Rights Agent (the “Rights Agreement”); all capitalized terms not defined herein shall have the meanings ascribed to such terms in the Rights Agreement.

WHEREAS, the Board of Directors of the Company has determined that it is desirable to amend the Rights Agreement as set forth herein;

WHEREAS, subject to certain limited exceptions, Section 27 of the Rights Agreement provides that the Company may, in its sole and absolute discretion, and the Rights Agent shall if the Company so directs, amend any provision of the Rights Agreement in any respect without the approval of any holders of the Rights;

WHEREAS, this Amendment is permitted by Section 27 of the Rights Agreement; and

WHEREAS, pursuant to Section 27 of the Rights Agreement, the Company hereby directs that the Rights Agreement shall be amended as set forth in this Amendment.

NOW THEREFORE, in consideration of the foregoing premises and mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Rights Agent hereby agree as follows:

Section 1. Amendments to Section 1.

(a)Section 1(b) of the Rights Agreement is hereby amended to read in its entirety “[intentionally omitted]”.

(b)Clause (A) of Section 1(d)(iii) of the Rights Agreement is hereby amended to read in its entirety “[intentionally omitted]”.

Section 2. Effective Date; Certification. This Amendment shall be deemed effective as of the date first written above, as if executed on such date. The duly authorized officer of the Company executing this Amendment hereby certifies to the Rights Agent that the amendment to the Rights Agreement set forth in this Amendment is in compliance with Section 27 of the Rights Agreement and the certification contained in this Section 2 shall constitute the certification required by Section 27 of the Rights Agreement.

Section 3. Governing Law. This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State.

Section 4. Severability. If any term, provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment shall remain in full force and

1

effect and shall in no way be affected, impaired or invalidated. If any such excluded term, provision, covenant or restriction shall affect the rights, immunities, duties or obligations of the Rights Agent in a materially adverse manner, then the Rights Agent shall be entitled to resign immediately upon written notice to the Company.

Section 5. Counterparts. This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. Delivery of an executed signature page of this Amendment by facsimile or other customary means of electronic transmission (e.g., “pdf”) shall be as effective as delivery of a manually executed counterpart hereof.

Section 6. No Modification. Except as expressly set forth herein, this Amendment shall not by implication or otherwise alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Rights Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect.

Section 7. Headings. The headings of the sections of this Amendment have been inserted for convenience of reference only and shall in no way restrict or otherwise modify any of the terms or provisions hereof.

[Signature Page Follows]

2

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date and year first above written.

GROUPON, INC.
By:	/s/ Melissa Thomas
Name: Melissa Thomas
Title: Chief Financial Officer
COMPUTERSHARE TRUST COMPANY, N.A.,
as Rights Agent
By:	/s/ Fred Papenmeier
Name: Fred Papenmeier
Title: Vice President & Manager

3

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Aaron Cooper, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Groupon, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 5, 2020                    /s/ Aaron Cooper

                            Aaron Cooper

                            Interim Chief Executive Officer

                            (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Melissa Thomas, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Groupon, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 5, 2020                        /s/ Melissa Thomas

                                Melissa Thomas

                                Chief Financial Officer

        (Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certifications Pursuant to

18 U.S.C. Section 1350

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Groupon, Inc. (the "Company") on Form 10-Q for the period ended September 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Aaron Cooper, Interim Chief Executive Officer of the Company, and Melissa Thomas, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to our knowledge, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:    /s/ Aaron Cooper

    Aaron Cooper

    Interim Chief Executive Officer

    (Principal Executive Officer)

By:    /s/ Melissa Thomas

    Melissa Thomas

    Chief Financial Officer

    (Principal Financial Officer)

Date: November 5, 2020

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2020	Nov. 02, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	1-35335
Entity Registrant Name	Groupon, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-0903295
Entity Address, Address Line One	600 W Chicago Avenue
Entity Address, Address Line Two	Suite 400
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60654
City Area Code	(312)
Local Phone Number	334-1579
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	GRPN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Smaller Reporting Company	false
Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		28,812,655
Entity Central Index Key	0001490281
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands		Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents		$ 778,967	$ 750,887
Accounts receivable, net		45,451	54,953
Prepaid expenses and other current assets		51,958	82,073
Total current assets		876,376	887,913
Property, equipment and software, net		88,488	124,950
Right-of-use assets - operating leases, net		79,008	108,390
Goodwill		213,009	325,017
Intangible assets, net		30,965	35,292
Investments		35,911	76,576
Other non-current assets		26,061	28,605
Total Assets		1,349,818	1,586,743
Current liabilities:
Short-term borrowings		200,000	0
Accounts payable		42,210	20,415
Accrued merchant and supplier payables		381,856	540,940
Accrued expenses and other current liabilities		257,298	260,192
Total current liabilities		881,364	821,547
Convertible senior notes, net		225,693	214,869
Operating lease obligations		94,142	110,294
Total other non-current liabilities		50,096	44,987
Total Liabilities		1,251,295	1,191,697
Stockholders' Equity
Common stock	[1]	4	4
Additional paid-in-capital	[1]	2,338,432	2,310,393
Treasury stock	[1]	(922,666)	(922,666)
Accumulated deficit		(1,334,864)	(1,032,876)
Accumulated other comprehensive income (loss)		17,702	39,081
Total Groupon, Inc. Stockholders' Equity		98,608	393,936
Noncontrolling interests		(85)	1,110
Total Equity		98,523	395,046
Total Liabilities and Equity		$ 1,349,818	$ 1,586,743

[1] Prior period share information and balances have been retroactively adjusted to reflect a reverse stock split. See Note 7, Stockholders' Equity and Compensation Arrangements for additional information.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Common stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	100,500,000	100,500,000
Common stock, shares issued (in shares)	39,084,960	38,584,854
Common stock, shares outstanding (in shares)	28,790,843	28,290,737
Treasury Stock
Treasury stock (in shares)	10,294,117	10,294,117

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenue:
Total revenue		$ 304,019	$ 495,612	$ 1,073,815	$ 1,606,599
Cost of revenue:
Total cost of revenue		143,997	217,672	575,320	730,511
Gross profit		160,022	277,940	498,495	876,088
Operating expenses:
Marketing		31,386	74,976	116,758	257,296
Selling, general and administrative		124,257	198,388	475,017	619,274
Goodwill impairment		0	0	109,486	0
Long-lived asset impairment		0	0	22,351	0
Restructuring and related charges		20,559	(61)	61,037	(175)
Total operating expenses		176,202	273,303	784,649	876,395
Income (loss) from operations		(16,180)	4,637	(286,154)	(307)
Other income (expense), net		(867)	(17,253)	(21,549)	(92,602)
Income (loss) from continuing operations before provision (benefit) for income taxes		(17,047)	(12,616)	(307,703)	(92,909)
Provision (benefit) for income taxes		(486)	2,069	(7,170)	591
Income (loss) from continuing operations		(16,561)	(14,685)	(300,533)	(93,500)
Income (loss) from discontinued operations, net of tax		0	0	382	2,162
Net income (loss)		(16,561)	(14,685)	(300,151)	(91,338)
Net (income) loss attributable to noncontrolling interests		291	(2,000)	(1,758)	(8,080)
Net income (loss) attributable to Groupon, Inc.		$ (16,270)	$ (16,685)	$ (301,909)	$ (99,418)
Basic and diluted net income (loss) per share:
Continuing operations (in usd per share)	[1]	$ (0.57)	$ (0.59)	$ (10.59)	$ (3.57)
Discontinued operations (in usd per share)	[1]	0	0	0.01	0.08
Basic and diluted net income (loss) per share (in usd per share)	[1]	$ (0.57)	$ (0.59)	$ (10.58)	$ (3.49)
Weighted average number of shares outstanding
Basic (in shares)	[1]	28,751,520	28,348,561	28,535,393	28,416,966
Diluted (in shares)	[1]	28,751,520	28,348,561	28,535,393	28,416,966
Comprehensive income (loss):
Net change in unrealized gain (loss) on foreign currency translation adjustments		$ (11,786)	$ 4,439	$ (21,379)	$ 4,426
Net change in unrealized gain (loss) on available-for-sale securities (net of tax effect of $0 and $(16) for the three months ended September 30, 2020 and 2019 and $0 and $(51) for the nine months ended September 30, 2020 and 2019)		0	(47)	0	(151)
Other comprehensive income (loss)		(11,786)	4,392	(21,379)	4,275
Comprehensive income (loss)		(28,347)	(10,293)	(321,530)	(87,063)
Comprehensive (income) loss attributable to noncontrolling interest		291	(2,000)	(1,758)	(8,080)
Comprehensive income (loss) attributable to Groupon, Inc.		(28,056)	(12,293)	(323,288)	(95,143)
Service
Revenue:
Total revenue		155,073	268,080	474,478	831,510
Cost of revenue:
Total cost of revenue		17,005	28,947	60,162	86,169
Product
Revenue:
Total revenue		148,946	227,532	599,337	775,089
Cost of revenue:
Total cost of revenue		126,992	188,725	515,158	644,342
Continuing Operations
Comprehensive income (loss):
Other comprehensive income (loss)		(11,786)	4,392	(21,379)	4,275
Discontinued Operations, Disposed of by Sale
Comprehensive income (loss):
Other comprehensive income (loss)		$ 0	$ 0	$ 0	$ 0

[1] All share and per share information has been retroactively adjusted to reflect a reverse stock split. See Note 7, Stockholders' Equity and Compensation Arrangements for additional information.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Net change in unrealized gain (loss) on available-for-sale securities, tax	$ 0	$ (16)	$ 0	$ (51)

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands		Total	Cumulative effect of change in accounting principle, net of tax	Common Stock		Additional Paid-in Capital		Treasury Stock		Accumulated Deficit	Accumulated Deficit Cumulative effect of change in accounting principle, net of tax	Accumulated Other Comprehensive Income (Loss)	Total Groupon, Inc. Stockholders' Equity	Total Groupon, Inc. Stockholders' Equity Cumulative effect of change in accounting principle, net of tax	Non-controlling Interests
Beginning balance (in shares) at Dec. 31, 2018	[1]			38,046,972				9,592,756
Beginning balance at Dec. 31, 2018		$ 382,612		$ 4	[1]	$ 2,234,633	[1]	$ (877,491)	[1]	$ (1,010,499)		$ 34,602	$ 381,249		$ 1,363
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)		(35,695)								(42,487)		3,313	(39,174)		3,479
Exercise in stock options (in shares)	[1]			625
Exercise of stock options		8				8	[1]						8
Vesting of restricted stock units and performance share units (in shares)	[1]			208,020
Vesting of restricted stock units and performance share units		0
Shares issued under employee stock purchase plan (in shares)	[1]			35,964
Shares issued under employee stock purchase plan		1,998				1,998	[1]						1,998
Tax withholdings related to net share settlements of stock-based compensation awards (in shares)	[1]			(79,286)
Tax withholdings related to net share settlements of stock-based compensation awards		(5,681)				(5,681)	[1]						(5,681)
Payments for repurchase of common stock (in shares)	[1]							(220,399)
Payments for repurchase of common stock		(15,055)						$ (15,055)	[1]				(15,055)
Stock-based compensation on equity-classified awards		17,731				17,731	[1]						17,731
Distributions to noncontrolling interest holders		(3,521)													(3,521)
Ending balance (in shares) at Mar. 31, 2019	[1]			38,212,295				9,813,155
Ending balance at Mar. 31, 2019		342,397		$ 4	[1]	2,248,689	[1]	$ (892,546)	[1]	(1,052,986)		37,915	341,076		1,321
Beginning balance (in shares) at Dec. 31, 2018	[1]			38,046,972				9,592,756
Beginning balance at Dec. 31, 2018		382,612		$ 4	[1]	2,234,633	[1]	$ (877,491)	[1]	(1,010,499)		34,602	381,249		1,363
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)		(87,063)
Ending balance (in shares) at Sep. 30, 2019				38,458,764				10,294,116	[1]
Ending balance at Sep. 30, 2019		301,127		$ 4		2,294,073	[1]	$ (922,666)	[1]	(1,109,917)		38,877	300,371		756
Beginning balance (in shares) at Mar. 31, 2019	[1]			38,212,295				9,813,155
Beginning balance at Mar. 31, 2019		342,397		$ 4	[1]	2,248,689	[1]	$ (892,546)	[1]	(1,052,986)		37,915	341,076		1,321
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)		(41,075)								(40,246)		(3,430)	(43,676)		2,601
Exercise in stock options (in shares)	[1]			1,500
Exercise of stock options		32				32	[1]						32
Vesting of restricted stock units and performance share units (in shares)	[1]			220,211
Vesting of restricted stock units and performance share units		0
Shares issued under employee stock purchase plan		0
Tax withholdings related to net share settlements of stock-based compensation awards (in shares)	[1]			(76,220)
Tax withholdings related to net share settlements of stock-based compensation awards		(5,387)				(5,387)	[1]						(5,387)
Payments for repurchase of common stock (in shares)	[1]							(211,407)
Payments for repurchase of common stock		(15,053)						$ (15,053)	[1]				(15,053)
Stock-based compensation on equity-classified awards		28,339				28,339	[1]						28,339
Distributions to noncontrolling interest holders		(3,113)													(3,113)
Ending balance (in shares) at Jun. 30, 2019	[1]			38,357,786				10,024,562
Ending balance at Jun. 30, 2019		306,140		$ 4	[1]	2,271,673	[1]	$ (907,599)	[1]	(1,093,232)		34,485	305,331		809
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)		(10,293)								(16,685)		4,392	(12,293)		2,000
Vesting of restricted stock units and performance share units (in shares)				99,306
Vesting of restricted stock units and performance share units		0
Shares issued under employee stock purchase plan (in shares)				38,335
Shares issued under employee stock purchase plan		2,085				2,085	[1]						2,085
Tax withholdings related to net share settlements of stock-based compensation awards (in shares)				(36,663)
Tax withholdings related to net share settlements of stock-based compensation awards		(2,049)				(2,049)							(2,049)
Payments for repurchase of common stock (in shares)	[1]							(269,554)
Payments for repurchase of common stock		(15,067)						$ (15,067)	[1]				(15,067)
Stock-based compensation on equity-classified awards		22,364				22,364	[1]						22,364
Distributions to noncontrolling interest holders		(2,053)													(2,053)
Ending balance (in shares) at Sep. 30, 2019				38,458,764				10,294,116	[1]
Ending balance at Sep. 30, 2019		301,127		$ 4		2,294,073	[1]	$ (922,666)	[1]	(1,109,917)		38,877	300,371		756
Beginning balance (in shares) at Dec. 31, 2019	[1]			38,584,854				10,294,117
Beginning balance at Dec. 31, 2019		395,046	$ (79)	$ 4	[1]	2,310,393	[1]	$ (922,666)	[1]	(1,032,876)	$ (79)	39,081	393,936	$ (79)	1,110
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)		(212,439)								(213,522)		(1,961)	(215,483)		3,044
Vesting of restricted stock units and performance share units (in shares)	[1]			165,705
Vesting of restricted stock units and performance share units		0
Shares issued under employee stock purchase plan (in shares)	[1]			28,621
Shares issued under employee stock purchase plan		1,163				1,163	[1]						1,163
Tax withholdings related to net share settlements of stock-based compensation awards (in shares)	[1]			(67,135)
Tax withholdings related to net share settlements of stock-based compensation awards		(3,684)				(3,684)	[1]						(3,684)
Stock-based compensation on equity-classified awards		15,345				15,345	[1]						15,345
Distributions to noncontrolling interest holders		(3,845)													(3,845)
Ending balance (in shares) at Mar. 31, 2020	[1]			38,712,045				10,294,117
Ending balance at Mar. 31, 2020		191,507		$ 4	[1]	2,323,217	[1]	$ (922,666)	[1]	(1,246,477)		37,120	191,198		309
Beginning balance (in shares) at Dec. 31, 2019	[1]			38,584,854				10,294,117
Beginning balance at Dec. 31, 2019		395,046	$ (79)	$ 4	[1]	2,310,393	[1]	$ (922,666)	[1]	(1,032,876)	$ (79)	39,081	393,936	$ (79)	1,110
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)		(321,530)
Ending balance (in shares) at Sep. 30, 2020				39,084,960				10,294,117	[1]
Ending balance at Sep. 30, 2020		98,523		$ 4		2,338,432	[1]	$ (922,666)	[1]	(1,334,864)		17,702	98,608		(85)
Beginning balance (in shares) at Mar. 31, 2020	[1]			38,712,045				10,294,117
Beginning balance at Mar. 31, 2020		191,507		$ 4	[1]	2,323,217	[1]	$ (922,666)	[1]	(1,246,477)		37,120	191,198		309
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)		(80,744)								(72,117)		(7,632)	(79,749)		(995)
Vesting of restricted stock units and performance share units (in shares)	[1]			430,100
Vesting of restricted stock units and performance share units		0
Shares issued under employee stock purchase plan		0
Tax withholdings related to net share settlements of stock-based compensation awards (in shares)	[1]			(164,468)
Tax withholdings related to net share settlements of stock-based compensation awards		(4,554)				(4,554)	[1]						(4,554)
Stock-based compensation on equity-classified awards		10,936				10,936	[1]						10,936
Receipts from noncontrolling interest holders		339													339
Ending balance (in shares) at Jun. 30, 2020	[1]			38,977,677				10,294,117
Ending balance at Jun. 30, 2020		117,484		$ 4	[1]	2,329,599	[1]	$ (922,666)	[1]	(1,318,594)		29,488	117,831		(347)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)		(28,347)								(16,270)		(11,786)	(28,056)		(291)
Vesting of restricted stock units and performance share units (in shares)				104,819
Vesting of restricted stock units and performance share units		0
Shares issued under employee stock purchase plan (in shares)				40,750
Shares issued under employee stock purchase plan		628				628	[1]						628
Tax withholdings related to net share settlements of stock-based compensation awards (in shares)				(38,286)
Tax withholdings related to net share settlements of stock-based compensation awards		(1,016)				(1,016)	[1]						(1,016)
Stock-based compensation on equity-classified awards		9,221				9,221	[1]						9,221
Receipts from noncontrolling interest holders		553													553
Ending balance (in shares) at Sep. 30, 2020				39,084,960				10,294,117	[1]
Ending balance at Sep. 30, 2020		$ 98,523		$ 4		$ 2,338,432	[1]	$ (922,666)	[1]	$ (1,334,864)		$ 17,702	$ 98,608		$ (85)

[1] All share information and balances have been retroactively adjusted to reflect a reverse stock split. See Note 7, Stockholders' Equity and Compensation Arrangements, for additional information.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2020	Sep. 30, 2019
Operating activities
Net income (loss)		$ (300,151)	$ (91,338)
Less: Income (loss) from discontinued operations, net of tax		382	2,162
Income (loss) from continuing operations		(300,533)	(93,500)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property, equipment and software		60,988	69,986
Amortization of acquired intangible assets		7,378	11,419
Impairment of goodwill		109,486	0
Impairment of long-lived assets		22,351	0
Restructuring-related impairment		17,199	0
Stock-based compensation		30,937	62,517
Impairment of investment		6,684	0
Deferred income taxes		0	816
(Gain) loss from changes in fair value of investments		1,405	68,971
Amortization of debt discount on convertible senior notes		10,824	9,772
Change in assets and liabilities, net of acquisitions and dispositions:
Accounts receivable		9,602	12,581
Prepaid expenses and other current assets		29,098	2,591
Right-of-use assets - operating leases		17,680	19,624
Accounts payable		20,733	(16,892)
Accrued merchant and supplier payables		(163,125)	(216,127)
Accrued expenses and other current liabilities		2,496	(63,392)
Operating lease obligations		(29,709)	(18,960)
Other, net		2,002	20,476
Net cash provided by (used in) operating activities from continuing operations		(144,504)	(130,118)
Net cash provided by (used in) operating activities from discontinued operations		0	0
Net cash provided by (used in) operating activities		(144,504)	(130,118)
Investing activities
Purchases of property and equipment and capitalized software		(36,662)	(51,854)
Proceeds from sale of investment		31,605	0
Acquisitions of intangible assets and other investing activities		(3,416)	(3,037)
Net cash provided by (used in) investing activities from continuing operations		(8,473)	(54,891)
Net cash provided by (used in) investing activities from discontinued operations		1,224	0
Net cash provided by (used in) investing activities		(7,249)	(54,891)
Financing activities
Proceeds from borrowings under revolving credit agreement		200,000	0
Payment of contingent consideration related to acquisition		(908)	0
Issuance costs for revolving credit agreement		(1,148)	(2,384)
Payments for repurchases of common stock		0	(44,162)
Taxes paid related to net share settlements of stock-based compensation awards		(8,787)	(13,975)
Proceeds from stock option exercises and employee stock purchase plan		1,791	4,123
Distributions to noncontrolling interest holders		(2,953)	(8,687)
Payments of finance lease obligations		(7,438)	(16,868)
Net cash provided by (used in) financing activities		180,557	(81,953)
Effect of exchange rate changes on cash, cash equivalents and restricted cash, including cash classified within current assets of discontinued operations		(716)	(9,153)
Net increase (decrease) in cash, cash equivalents and restricted cash, including cash classified within current assets of discontinued operations		28,088	(276,115)
Less: Net increase (decrease) in cash classified within current assets of discontinued operations		1,224	0
Net increase (decrease) in cash, cash equivalents and restricted cash		26,864	(276,115)
Cash, cash equivalents and restricted cash, beginning of period	[1]	752,657	844,728
Cash, cash equivalents and restricted cash, end of period	[1]	779,521	568,613
Non-cash investing and financing activities
Equipment acquired under finance lease arrangements		0	3,865
Liability for repurchases of common stock		0	(1,469)
Increase (decrease) in liabilities related to purchases of property and equipment and capitalized software		261	(201)
Restricted Cash [Abstract]
Cash, cash equivalents and restricted cash	[1]	$ 779,521	$ 844,728

[1] The following table provides a reconciliation of cash, cash equivalents and restricted cash shown above to amounts reported within the condensed consolidated balance sheets as of September 30, 2020, December 31, 2019 and December 31, 2018 and amounts previously reported within the condensed consolidated balance sheet in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2019 (in thousands): September 30, 2020December 31, 2019September 30, 2019December 31, 2018Cash and cash equivalents$778,967 $750,887 $567,285 $841,021 Restricted cash included in prepaid expenses and other current assets315 1,534 1,101 3,320 Restricted cash included in other non-current assets239 236 227 387 Cash, cash equivalents and restricted cash$779,521 $752,657 $568,613 $844,728 

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Company Information

Groupon, Inc. and its subsidiaries, which commenced operations in October 2008, is a global scaled two-sided marketplace that connect merchants to consumers by offering goods and services, generally at a discount. Customers access those marketplaces through our mobile applications and our websites, primarily localized groupon.com sites in many countries.

Our operations are organized into two segments: North America and International. See Note 13, Segment Information.

Reverse Stock Split

On June 10, 2020, we effectuated a reverse stock split of our common stock at a ratio of 1-for-20. See Note 7, Stockholders' Equity and Compensation Arrangements, for additional information. As a result, the number of shares and income (loss) per share disclosed throughout this Quarterly Report on Form 10-Q have been retrospectively adjusted to reflect the reverse stock split.

COVID-19 Pandemic

Since March 2020, the COVID-19 pandemic has led to significant disruption in our business as a result of the preventive and protective actions, such as consumer restrictions and merchant closures that governments, our merchants and consumers have implemented in response to the pandemic. The COVID-19 pandemic has had an adverse impact on our financial condition, results of operations and cash flows. The negative impact of COVID-19 on our business is expected to continue at least as long as our performance is impacted by market conditions as we rely on customers' purchases of vouchers for local experiences, including events and activities, beauty and wellness, travel and dining. We continue to monitor the impact of COVID-19 on our business, including increases in government restrictions and the potential for colder weather in certain North America and International markets to further exacerbate negative trends.

In light of the impact of COVID-19 on our business, we expect a net loss and negative operating cash flows for the year ending December 31, 2020. We plan to continue to actively manage and optimize our cash balances and liquidity, working capital and operating expenses, although there can be no assurances that we will be able to do so. We have taken several steps to reduce costs, preserve cash in the near-term and improve liquidity, including, but not limited to: reducing our workforce and furloughing staff; continuing to sell Goods on our platform instead of quickly exiting the category; reducing marketing expense by significantly shortening payback thresholds and delaying brand marketing investments; transitioning merchants to redemption payment terms, instead of fixed payment terms; implementing a hiring freeze; eliminating broad-based merit increases for employees; replacing cash compensation with equity compensation in 2020 for all members of our Board of Directors (the "Board"); and amending our Credit Agreement (as defined below) to, among other things, provide covenant relief through the first quarter of 2021. The future impact of COVID-19 on our business, results of operations, financial condition and liquidity is highly uncertain and will ultimately depend on future developments, including the magnitude and duration of the pandemic and the protective measures associated with reducing its spread.

In the first quarter 2020, we determined the significant deterioration in our financial performance due to the disruption in our operations from COVID-19 and the sustained decrease in our stock price required us to evaluate our long-lived assets and goodwill for impairment, which resulted in the impairment of our long-lived assets and goodwill. See Note 2, Goodwill and Long-Lived Assets. Additionally, the economic impacts of COVID-19 resulted in an impairment or a reduction in the fair value of certain of our investments during the first quarter 2020. See Note 3, Investments.

In April 2020, the Board approved multi-phase restructuring actions relating to our previously announced strategic shift and as part of the cost reduction measures we are implementing in response to the impact of

COVID-19. We expect to incur total pre-tax charges of $75.0 million to $105.0 million in connection with these multi-phase restructuring actions through the end of 2021. See Note 9, Restructuring and Related Charges, for additional information about restructuring charges incurred during the nine months ended September 30, 2020, which included employee severance and compensation benefits expenses, facilities-related costs and impairment charges, professional advisory fees and a rationalization of our country footprint.

Unaudited Interim Financial Information

We have prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the SEC for interim financial reporting. These condensed consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations and comprehensive income (loss), cash flows and stockholders' equity for the periods presented. These condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2019.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Groupon, Inc. and its wholly-owned subsidiaries, majority-owned subsidiaries over which we exercise control and variable interest entities for which we are the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation. Outside stockholders' interests in subsidiaries are shown on the condensed consolidated financial statements as Noncontrolling interests.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Estimates in our financial statements include, but are not limited to, the following: variable consideration from unredeemed vouchers, income taxes, leases, initial valuation and subsequent impairment testing of goodwill, other intangible assets and long-lived assets, investments, receivables, customer refunds and other reserves, contingent liabilities, and the useful lives of property, equipment and software and intangible assets. Actual results could differ materially from those estimates.

Reclassifications

Certain reclassifications have been made to the condensed consolidated financial statements of prior periods to conform to the current period presentation.

Adoption of New Accounting Standards

We adopted the guidance in ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses of Financial Instruments ("CECL") on January 1, 2020. This ASU requires entities to measure credit losses for financial assets measured at amortized cost based on expected losses over the lifetime of the asset rather than incurred losses. The adoption of ASU 2016-13 did not have a material impact on the condensed consolidated financial statements. See Note 8, Revenue Recognition, for additional information.

We adopted the guidance in ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment on January 1, 2020. This ASU eliminates Step 2 of the goodwill impairment test and requires a goodwill impairment to be measured as the amount by which a reporting unit's carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. During the first quarter 2020, we determined a triggering event occurred that required us to evaluate our goodwill for impairment, and we recorded an impairment charge as a result of that assessment. See Note 2, Goodwill and Long-Lived Assets, for additional information.

We adopted the guidance in ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement on January 1, 2020. This ASU modifies the disclosure requirements in Topic 820, Fair Value Measurements, by removing, modifying, or adding certain disclosures. The adoption of ASU 2018-13 did not have a material impact on the condensed consolidated financial statements.

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GOODWILL AND LONG-LIVED ASSETS

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND LONG-LIVED ASSETS

GOODWILL AND LONG-LIVED ASSETS

In accordance with ASC Topic 350, Intangibles — Goodwill and Other, we evaluate goodwill for impairment annually on October 1 or more frequently when an event occurs or circumstances change that indicates the carrying value may not be recoverable. We also review our long-lived assets, such as property, equipment and software, right-of-use assets and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. During the first quarter 2020, we determined the significant deterioration in our financial performance due to the disruption in our operations from COVID-19 and the sustained decrease in our stock price required us to evaluate our goodwill and long-lived assets for impairment. During the second and third quarters 2020, we determined that the actions taken under our restructuring plan changed how we used certain long-lived assets such that the carrying amount of those long-lived assets may not be recoverable, which required us to evaluate those long-lived assets for impairment.

Future events and changing market conditions due to the impact of COVID-19 may require us to re-evaluate the estimates used in our fair value measurements, which could result in additional impairment of long-lived assets or goodwill in future periods that may have a material effect on our operating results.

Goodwill

In order to evaluate goodwill for impairment in the first quarter 2020, we compared the fair values of our three reporting units (North America, EMEA and Asia Pacific) to their carrying values. In determining fair values for our reporting units, we used the discounted cash flow method and the market multiple valuation approach that use Level 3 inputs. The significant estimates used in the discounted cash flow models are the risk-adjusted discount rates; forecasted revenue, cost of revenue and operating expenses; forecasted capital expenditures and working capital needs; weighted average cost of capital; rates of long-term growth; and income tax rates. These estimates considered the recent deterioration in financial performance of the reporting units as well as the anticipated rate of recovery, and implied risk premiums based on the market prices of our equity and debt as of the assessment date. The significant estimates used in the market multiple valuation approach include identifying business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and earnings multiples. As a result of the interim quantitative assessment of goodwill in the first quarter 2020, we identified a partial impairment of goodwill in our EMEA reporting unit within the International segment and recognized goodwill impairment of $109.5 million. We did not recognize any goodwill impairment in our North America or Asia Pacific reporting units during the three months ended March 31, 2020.

During the second quarter 2020, we determined that we did not have a triggering event that required us to evaluate goodwill for impairment, and therefore we did not recognize goodwill impairment for any of our reporting units during the second quarter 2020.

During the third quarter 2020, we exited our operations in Japan and New Zealand, which represent the majority of the countries in our Asia Pacific reporting unit. As a result, we combined the remainder of the Asia Pacific reporting unit and the EMEA reporting unit into a single International reporting unit, consistent with how management reviews the operating results of the business. As a result of the change in reporting units, we performed a qualitative assessment of potential goodwill impairment for the new International reporting unit and performed separate qualitative assessments of potential goodwill impairment for our Asia Pacific and EMEA reporting units immediately prior to the change. Based on those assessments, which considered current market conditions and recent business performance, we determined that the likelihood of a goodwill impairment did not reach the more-likely-than not threshold. Accordingly, we concluded that goodwill relating to those reporting units was not impaired and further quantitative testing was not required to be performed. We did not identify any other triggering events that required us to evaluate goodwill impairment in our North America or International reporting units during the third quarter 2020 and therefore did not recognize goodwill impairment for any of our reporting units during the third quarter 2020.

The following table summarizes goodwill activity by segment for the nine months ended September 30, 2020 (in thousands):

	North America		International (1)		Consolidated
Balance as of December 31, 2019	$	178,685	$	146,332	$	325,017
Impairment loss	—		(109,486)		(109,486)
Foreign currency translation	—		(2,522)		(2,522)
Balance as of September 30, 2020	$	178,685	$	34,324	$	213,009

(1)As of September 30, 2020, the International reporting unit had a negative carrying value.

Long-Lived Assets

Following our review of long-lived assets for impairment in the first quarter 2020, we recognized long-lived asset impairment of $22.4 million within our International segment related to our EMEA operations.

During the second quarter 2020, we recognized long-lived asset impairments of $13.5 million and $0.4 million within our North America and International segments for certain asset groups due to actions taken under our restructuring plan. During the third quarter 2020, we recognized long-lived asset impairments of $0.8 million and $2.5 million within our North America and International segments for certain asset groups due to actions taken under our restructuring plan. See Note 9, Restructuring and Related Charges, for more information.

The assets that we deemed impaired were written down to fair value based on the discounted cash flow method that uses Level 3 inputs. The significant estimates used in the discounted cash flow models are the risk-adjusted discount rates; forecasted revenue, cost of revenue and operating expenses; forecasted capital expenditures and working capital needs; weighted average cost of capital; rates of long-term growth; and income tax rates.

Impairment charges are presented within the following line items of the condensed consolidated statements of operations for the three and nine months ended September 30, 2020 (in thousands):

	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
Long-lived asset impairment	$	—	$	22,351
Restructuring and related charges	3,296		17,199
Total impairment	$	3,296	$	39,550

The following table summarizes impairment for long-lived assets and restructuring and related charges by asset type through September 30, 2020 (in thousands):

Long-Lived Asset Category	Impairment
Property, equipment and software, net
Furniture and fixtures	$	413
Leasehold improvements (1)	7,749
Office equipment	198
Purchased software	14
Computer hardware	2,842
Right-of-use assets - finance leases, net	1,388
Capitalized software	304
Internally-developed software	2,988
Total Property, equipment and software, net	$	15,896
Right-of-use assets - operating leases, net (2)	22,680
Intangible assets, net	103
Other non-current assets	871
Total long-lived assets	$	39,550

(1)Includes long-lived asset impairment of $5.0 million presented within Restructuring and related charges during the nine months ended September 30, 2020. See Note 9, Restructuring and Related Charges, for more information.

(2)Includes right-of-use asset impairment of $12.2 million during the nine months ended September 30, 2020. See Note 9, Restructuring and Related Charges, for more information.

The following table summarizes intangible assets as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020						December 31, 2019
Intangible Asset Category	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships	$	16,200	$	16,200	$	—	$	16,200	$	16,200	$	—
Merchant relationships	21,668		10,557		11,111		22,193		8,268		13,925
Trade names	9,491		7,771		1,720		9,558		7,369		2,189
Developed technology	2,319		1,906		413		3,651		2,685		966
Patents	25,809		19,850		5,959		23,021		18,167		4,854
Other intangible assets	26,736		14,974		11,762		26,115		12,757		13,358
Total	$	102,223	$	71,258	$	30,965	$	100,738	$	65,446	$	35,292

Amortization of intangible assets is computed using the straight-line method over their estimated useful lives, which range from 1 to 10 years. Amortization expense related to intangible assets was $2.5 million and $3.7 million for the three months ended September 30, 2020 and 2019 and $7.4 million and $11.4 million for the nine months ended September 30, 2020 and 2019. As of September 30, 2020, estimated future amortization expense related to intangible assets is as follows (in thousands):

Remaining amounts in 2020	$	2,312
2021	8,173
2022	7,577
2023	6,426
2024	2,840
Thereafter	3,637
Total	$	30,965

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INVESTMENTS

9 Months Ended

Sep. 30, 2020

Schedule of Equity Method Investments [Abstract]

INVESTMENTS

INVESTMENTS

The following table summarizes investments as of September 30, 2020 and December 31, 2019 (dollars in thousands):

	September 30, 2020		Percent Ownership of Voting Stock			December 31, 2019		Percent Ownership of Voting Stock
Available-for-sale securities - redeemable preferred shares	$	—	19%	to	25%	$	—	19%	to	25%
Fair value option investments	—		10%	to	19%	1,405		10%	to	19%
Other equity investments	35,911		1%	to	19%	75,171		1%	to	19%
Total investments	$	35,911				$	76,576

Fair Value Option Investments    

In connection with the dispositions of controlling stakes in TMON Inc. ("TMON"), an entity based in the Republic of Korea and Groupon India in prior periods, we obtained minority investments in Monster Holdings LP ("Monster LP") and in Nearbuy Pte Ltd. ("Nearbuy"). We have made an irrevocable election to account for both of those investments at fair value with changes in fair value reported in earnings. We elected to apply fair value accounting to those investments because we believe that fair value is the most relevant measurement attribute for those investments, as well as to reduce operational and accounting complexity. Our election to apply fair value accounting to those investments has and may continue to cause fluctuations in our earnings from period to period.

There were no material changes in fair value of those investments for the three months ended September 30, 2020 and 2019. The following table summarizes gains and losses due to changes in fair value of those investments for the nine months ended September 30, 2020 and 2019 (in thousands):

	Nine Months Ended September 30,
	2020		2019
Monster LP	$	—	$	(69,408)
Nearbuy	(1,405)		437
Total	$	(1,405)	$	(68,971)

We determined that the fair value of our investment in Nearbuy was $0.0 million as of September 30, 2020 and $1.4 million as of December 31, 2019. During the first quarter 2020, we recognized a $1.4 million loss from changes in the fair value of our investment in Nearbuy due to revised cash flow projections and an increase in the discount rate applied to those forecasts, which increased to 30% as of March 31, 2020, as compared with 20% as of December 31, 2019. The revisions to the financial projections and the increase in the discount rate applied as of March 31, 2020 were due to the deterioration in the financial condition of Nearbuy as a result of COVID-19, which resulted in underperformance as compared with prior projections and an increase to financial projection risk.

We determined that the fair value of our investment in Monster LP was $0.0 million as of September 30, 2020 and December 31, 2019. During the first quarter 2019, we recognized a $41.5 million loss from changes in the fair value of our investment in Monster LP due to the revised cash flow projections provided by TMON in March 2019 and an increase in the discount rate applied to those forecasts, which increased to 26.0% as of March 31, 2019, as compared with 21.0% as of December 31, 2018. The increase in the discount rate applied as of March 31, 2019 was due to the deterioration in the financial condition of TMON and the competitive environment in the Korean e-commerce industry, which resulted in an increase to financial projection risk. During the second quarter 2019, we recognized an additional loss of $27.9 million from changes in the fair value of our investment in Monster LP due to revised financial projections provided by TMON in June 2019. The revisions to the financial projections were made as a result of TMON’s continued underperformance as compared with prior projections along with adjustments to their business model.

    Other Equity Investments

    Other equity investments represent equity investments without readily determinable fair values recorded at cost adjusted for observable price changes and impairments. During the first quarter 2020, we sold 50% of our shares in an other equity investment for total cash consideration of $34.0 million, which approximated cost adjusted for observable price changes as of December 31, 2019.

In addition, we recorded a $6.7 million impairment during the first quarter 2020 to an other equity method investment as a result of revised cash flow projections and a deterioration in financial condition due to COVID-19. We did not recognize any other impairments during the nine months ended September 30, 2020.

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SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION

9 Months Ended

Sep. 30, 2020

Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]

SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION

SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION

The following table summarizes other income (expense), net for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Interest income	$	1,268	$	1,959	$	5,254	$	5,810
Interest expense	(9,408)		(6,029)		(24,375)		(17,162)
Changes in fair value of investments	—		14		(1,405)		(68,971)
Foreign currency gains (losses), net	7,273		(13,197)		5,661		(12,279)
Impairment of investment	—		—		(6,684)		—
Other income (expense), net	$	(867)	$	(17,253)	$	(21,549)	$	(92,602)

The following table summarizes prepaid expenses and other current assets as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Merchandise inventories	$	4,944	$	25,426
Prepaid expenses	16,069		27,077
Income taxes receivable	13,585		4,791
Other	17,360		24,779
Total prepaid expenses and other current assets	$	51,958	$	82,073

The following table summarizes other non-current assets as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Deferred income tax	$	4,932	$	4,829
Debt issue costs, net	2,342		2,156
Deferred commissions expense	4,856		10,133
Deferred cloud implementation costs	10,175		7,372
Other	3,756		4,115
Total other non-current assets	$	26,061	$	28,605

The following table summarizes accrued merchant and supplier payables as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Accrued merchant payables	$	297,018	$	366,573
Accrued supplier payables (1)	84,838		174,367
Total accrued merchant and supplier payables	$	381,856	$	540,940

(1)Amounts include payables to suppliers of inventories and providers of shipping and fulfillment services.

The following table summarizes accrued expenses and other current liabilities as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Refund reserve	$	29,566	$	22,002
Compensation and benefits	37,711		49,009
Accrued marketing	10,256		41,110
Restructuring-related liabilities	19,753		—
Customer credits	50,830		13,764
Income taxes payable	1,221		5,044
Deferred revenue	10,635		17,951
Operating and finance lease obligations	38,055		40,768
Deferred cloud computing contract incentive	3,000		—
Other	56,271		70,544
Total accrued expenses and other current liabilities	$	257,298	$	260,192

The following table summarizes other non-current liabilities as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Contingent income tax liabilities	$	28,725	$	30,121
Finance lease obligations	1,126		5,831
Restructuring-related liabilities	714		—
Deferred income taxes	3,832		3,903
Deferred payroll taxes (1)	5,024		—
Deferred cloud computing contract incentive	5,000		—
Other	5,675		5,132
Total other non-current liabilities	$	50,096	$	44,987

(1)We have elected to defer certain payroll taxes under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act. These amounts are due beginning December 31, 2021.

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FINANCING ARRANGEMENTS

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

FINANCING ARRANGEMENTS

FINANCING ARRANGEMENTS

Convertible Senior Notes

On April 4, 2016, we issued $250.0 million in aggregate principal amount of convertible senior notes (the "Notes") in a private placement to A-G Holdings, L.P. ("AGH"). Michael Angelakis, the chairman and chief executive officer of Atairos Group, Inc. ("Atairos"), joined our Board of Directors (the "Board") in connection with the issuance of the Notes. Atairos controls the voting power of AGH. The net proceeds from this offering were $243.2 million after deducting issuance costs. The Notes bear interest at a rate of 3.25% per annum, payable annually in arrears on April 1 of each year, beginning on April 1, 2017. The Notes will mature on April 1, 2022, subject to earlier conversion or redemption.

Each $1,000 of principal amount of the Notes initially is convertible into 9.25926 shares of common stock, which is equivalent to an initial conversion price of $108.00 per share, subject to adjustment upon the occurrence of specified events. Upon conversion, we can elect to settle the conversion value in cash, shares of our common stock, or any combination of cash and shares of our common stock. Holders of the Notes may convert their Notes at their option at any time until the close of business on the scheduled trading day immediately preceding the maturity date. In addition, if specified corporate events occur prior to the maturity date, we may be required to increase the conversion rate for holders who elect to convert based on the effective date of such event and the applicable stock price attributable to the event, as set forth in a table contained in the indenture governing the Notes (the "Indenture"). Based on the closing price of the common stock of $20.40 as of September 30, 2020, the if-converted value of the Notes was less than the principal amount.

With certain exceptions, upon a fundamental change (as defined in the Indenture), the holders of the Notes may require us to repurchase all or a portion of their Notes for cash at a purchase price equal to the principal amount plus accrued and unpaid interest. In addition, we may redeem the Notes, at our option, at a purchase price equal to the principal amount plus accrued and unpaid interest on or after April 1, 2020, if the closing sale price of the common stock exceeds 150% of the then-current conversion price for 20 or more trading days in the 30 consecutive trading-day period preceding the exercise of this redemption right.

The Notes are senior unsecured obligations that rank equal in right of payment to all senior unsecured indebtedness and rank senior in right of payment to any indebtedness that is contractually subordinated to the Notes.

The Indenture includes customary events of default. If an event of default, as defined in the Indenture, occurs and is continuing, the principal amount of the Notes and any accrued and unpaid interest may be declared immediately due and payable. In the case of bankruptcy or insolvency, the principal amount of the Notes and any accrued and unpaid interest would automatically become immediately due and payable.

We have separated the Notes into their liability and equity components in the accompanying condensed consolidated balance sheets. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated conversion feature. The carrying amount of the equity component, representing the conversion option, was determined by deducting the fair value of the liability component from the principal amount of the Notes. The difference between the principal amount of the Notes and the liability component (the "debt discount") is amortized to interest expense at an effective interest rate of 9.75% over the term of the Notes. The equity component of the Notes is included in additional paid-in capital in the condensed consolidated balance sheets and is not remeasured as long as it continues to meet the conditions for equity classification.

We incurred transaction costs of approximately $6.8 million related to the issuance of the Notes. Those transaction costs were allocated to the liability and equity components in the same manner as the allocation of the proceeds from the Notes. Transaction costs attributable to the liability component of $4.8 million were recorded as a debt discount in the condensed consolidated balance sheet and are being amortized to interest expense over the term of the Notes. Transaction costs attributable to the equity component of $2.0 million were recorded in stockholders' equity as a reduction of the equity component.

The carrying amount of the Notes consisted of the following as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Liability component:
Principal amount	$	250,000	$	250,000
Less: debt discount	(24,307)		(35,131)
Net carrying amount of liability component	$	225,693	$	214,869
Net carrying amount of equity component	$	67,014	$	67,014

The estimated fair value of the Notes as of September 30, 2020 and December 31, 2019 was $251.8 million and $262.7 million, and was determined using a lattice model. We classified the fair value of the Notes as a Level 3 measurement due to the lack of observable market data over fair value inputs such as our stock price volatility over the term of the Notes and our cost of debt.

As of September 30, 2020, the remaining term of the Notes is approximately 1 years and 6 months. During the three and nine months ended September 30, 2020 and 2019, we recognized interest costs on the Notes as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Contractual interest (3.25% of the principal amount per annum)	$	2,032	$	2,032	$	6,096	$	6,096
Amortization of debt discount	3,701		3,341		10,824		9,772
Total	$	5,733	$	5,373	$	16,920	$	15,868

Note Hedges and Warrants

In May 2016, we purchased convertible note hedges with respect to our common stock for a cost of $59.1 million from certain bank counterparties. The convertible note hedges provide us with the right to purchase up to 2.3 million shares of our common stock at an initial strike price of $108.00 per share, which corresponds to the initial conversion price of the Notes, and are exercisable upon conversion of the Notes. The convertible note hedges are intended to reduce the potential economic dilution upon conversion of the Notes. The convertible note hedges are separate transactions and are not part of the terms of the Notes. Holders of the Notes do not have any rights with respect to the convertible note hedges.

In May 2016, we also sold warrants for total cash proceeds of $35.5 million to certain bank counterparties. The warrants provide the counterparties with the right to purchase up to 2.3 million shares of our common stock at a strike price of $170.00 per share. The warrants expire on various dates between July 1, 2022 and August 26, 2022 and are exercisable on their expiration dates. The warrants are separate transactions and are not part of the terms of the Notes or convertible note hedges. Holders of the Notes and convertible note hedges do not have any rights with respect to the warrants.

The amounts paid and received for the convertible note hedges and warrants were recorded in additional paid-in capital in the condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019. The convertible note hedges and warrants are not remeasured as long as they continue to meet the conditions for equity classification. The amounts paid for the convertible note hedges are tax deductible over the term of the Notes, while the proceeds received from the warrants are not taxable. 

Under the if-converted method, the shares of common stock underlying the conversion option in the Notes are included in the diluted earnings per share denominator and the interest expense on the Notes, net of tax, is added to the numerator. However, upon conversion, there will be no economic dilution from the Notes, as exercise of the convertible note hedges eliminates any dilution from the Notes that would have otherwise occurred when the price of our common stock exceeds the conversion price. Taken together, the purchase of the

convertible note hedges and sale of warrants are intended to offset any actual dilution from the conversion of the Notes and to effectively increase the overall conversion price from $108.00 to $170.00 per share.

Revolving Credit Agreement

In May 2019, we entered into a second amended and restated senior secured revolving credit agreement which provided for aggregate principal borrowings of up to $400.0 million (prior to the Amendment described below) and matures in May 2024.

On July 17, 2020, we entered into an amendment to the revolving credit agreement (the "Amendment" and the revolving credit agreement as amended, the "Amended Credit Agreement") in order to provide us with operational flexibility and covenant relief through the end of the first quarter of 2021 (the "Suspension Period") in light of the ongoing impacts of COVID-19 on our business. In addition to the covenant relief described below, the Amendment permanently reduces borrowing capacity under our senior secured revolving credit facility from $400.0 million to $225.0 million.

We deferred debt issuance costs of $3.2 million as a result of entering into the Amended Credit Agreement. Deferred debt issuance costs are included within Other non-current assets on the condensed consolidated balance sheet as of September 30, 2020 and are amortized to interest expense over the term of the respective agreement.

Pursuant to the Amendment, during the Suspension Period, the Company will be exempt from certain covenant restrictions, namely the requirements to maintain a maximum funded indebtedness to EBITDA ratio, a maximum senior secured indebtedness to EBITDA ratio, a minimum fixed charge coverage ratio, unrestricted cash of not less than $250.0 million and a minimum liquidity balance (including any undrawn amounts under the credit facility) of at least 70% of our accrued merchant and supplier payables balance (collectively, the "Existing Financial Covenants"). Additionally, the Amendment provides that, during the Suspension Period, we will be required to maintain specified minimum quarterly EBITDA levels and to maintain a monthly minimum liquidity balance (including any undrawn amounts under the credit facility) of at least 100% of our accrued merchant and supplier payables balance for such month plus $50.0 million. Following the Suspension Period, we will be subject to the Existing Financial Covenants.

In addition, under the Amended Credit Agreement, we are subject to various covenants, including customary restrictive covenants that limit our ability to, among other things: incur additional indebtedness; make dividend and other restricted payments, including limiting the amount of our share repurchases; enter into sale and leaseback transactions; make investments, loans or advances; grant or incur liens on assets; sell assets; engage in mergers, consolidations, liquidations or dissolutions; and engage in transactions with related parties and other affiliates. The Amendment further restricts certain of these negative covenants during the Suspension Period, including our ability to make share repurchases, acquisitions, investments and to incur additional indebtedness and liens.

Non-compliance with the covenants under the Amended Credit Agreement may result in termination of the commitments thereunder and any then outstanding borrowings may be declared due and payable immediately. We have the right to terminate the Amended Credit Agreement or reduce the available commitments at any time.

The Amendment also increases interest rates through the end of the first quarter of 2021, raising the alternative base rate and Canadian prime spreads to 1.50%, the fixed rate spreads to 2.50% and the commitment fee to 0.4% on the daily amount of the unused commitments under the Amended Credit Agreement. Following the Suspension Period, the applicable spread and commitment fee will revert to pre-Amendment levels, which provides for (a) interest at a rate per annum equal to (i) an adjusted LIBO rate or (ii) a customary base rate (with loans denominated in certain currencies bearing interest at rates specific to such currencies) plus an additional margin ranging between 0.50% and 2.00% and (b) commitment fees ranging from 0.25% to 0.35% on the daily amount of unused commitments. The Amended Credit Agreement also provides for the issuance of up to $75.0 million in letters of credit, provided that the sum of outstanding borrowings and letters of credit do not exceed the maximum funding commitment of $225.0 million.

The Amended Credit Agreement is secured by substantially all of our tangible and intangible assets, including a pledge of 100% of the outstanding capital stock of substantially all of our direct and indirect domestic

subsidiaries and 65% of the shares or equity interests of first-tier foreign subsidiaries and each U.S. entity whose assets substantially consist of capital stock and/or intercompany debt of one or more foreign subsidiaries, subject to certain exceptions. Certain of our domestic and foreign subsidiaries are guarantors under the Amended Credit Agreement.

We had $200.0 million of borrowings and $20.6 million of outstanding letters of credit under the Amended Credit Agreement as of September 30, 2020. We had $18.1 million of outstanding letters of credit under the credit agreement as of December 31, 2019. See Item 2. Management's Discussion of Financial Condition and Results of Operations - Liquidity and Capital Resources, for additional information.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Our contractual obligations and commitments and future operating income under our operating subleases as of September 30, 2020 and through the date of this report, did not materially change from the amounts set forth in our 2019 Annual Report on Form 10-K, except as disclosed below.

Purchase Obligations

During the nine months ended September 30, 2020, we entered into non-cancellable arrangements for cloud computing services and software. Future payments under these new contractual obligations are as follows (in thousands):

2020	$	5,810
2021	17,672
2022	17,118
2023 (1)	22,753
Total	$	63,353

(1)Includes $8.0 million in cloud computing arrangement costs for which the timing of settlement is based on usage. We expect to incur those costs over the three-year contract period ending in 2023.

Legal Matters and Other Contingencies

From time to time, we are party to various legal proceedings incident to the operation of our business. For example, we currently are involved in proceedings brought by merchants, employment and related matters, intellectual property infringement suits, customer lawsuits, stockholder claims relating to U.S. securities law, consumer class actions and suits alleging, among other things, violations of state consumer protection or privacy laws.

On April 28, 2020, an individual plaintiff filed a securities fraud class action complaint in the United States District Court for the Northern District of Illinois, and in July 2020, another individual was appointed as lead plaintiff. The lawsuit covers the time period from July 30, 2019 through February 18, 2020. The lead plaintiff alleges that Groupon and certain of its officers made materially false and/or misleading statements or omissions regarding its business, operations and prospects, specifically as it relates to reiterating its full year guidance on November 4, 2019 and the Groupon Select program. We intend to vigorously defend against these allegations, which we believe to be without merit.

In addition, third parties have from time to time claimed, and others may claim in the future, that we have infringed their intellectual property rights. We are subject to intellectual property disputes, including patent infringement claims, and expect that we will continue to be subject to intellectual property infringement claims as our services expand in scope and complexity. In the past, we have litigated such claims, and we are presently involved in several patent infringement and other intellectual property-related claims, including pending litigation or trademark disputes relating to, for example, our Goods category, some of which could involve potentially substantial claims for damages or injunctive relief. We may also become more vulnerable to third-party claims as laws such as the Digital Millennium Copyright Act are interpreted by the courts, and we become subject to laws in jurisdictions where the underlying laws with respect to the potential liability of online intermediaries are either

unclear or less favorable. We believe that additional lawsuits alleging that we have violated patent, copyright or trademark laws may be filed against us. Intellectual property claims, whether meritorious or not, are time consuming and often costly to resolve, could require expensive changes in our methods of doing business or the goods we sell, or could require us to enter into costly royalty or licensing agreements.

We also are subject to consumer claims or lawsuits relating to alleged violations of consumer protection or privacy rights and statutes, some of which could involve potentially substantial claims for damages, including statutory or punitive damages. Consumer and privacy related claims or lawsuits, whether meritorious or not, could be time consuming, result in costly litigation, damage awards, fines and penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, or require us to change our business practices, sometimes in expensive ways.

We are also subject to, or in the future may become subject to, a variety of regulatory inquiries, audits, and investigations across the jurisdictions where we conduct our business, including, for example, inquiries related to consumer protection, employment matters and/or hiring practices, marketing practices, tax, unclaimed property and privacy rules and regulations. Any regulatory actions against us, whether meritorious or not, could be time consuming, result in costly litigation, damage awards, fines and penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, require us to change our business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources, materially damage our brand or reputation, or otherwise harm our business.

We establish an accrued liability for loss contingencies related to legal and regulatory matters when the loss is both probable and reasonably estimable. Those accruals represent management's best estimate of probable losses and, in such cases, there may be an exposure to loss in excess of the amounts accrued. For certain of the matters described above, there are inherent and significant uncertainties based on, among other factors, the stage of the proceedings, developments in the applicable facts of law, or the lack of a specific damage claim. However, we believe that the amount of reasonably possible losses in excess of the amounts accrued for those matters would not have a material adverse effect on our business, condensed consolidated financial position, results of operations or cash flows. Our accrued liabilities for loss contingencies related to legal and regulatory matters may change in the future as a result of new developments, including, but not limited to, the occurrence of new legal matters, changes in the law or regulatory environment, adverse or favorable rulings, newly discovered facts relevant to the matter, or changes in the strategy for the matter. Regardless of the outcome, litigation and other regulatory matters can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Indemnifications

In connection with the disposition of our operations in Latin America in 2017, we recorded $5.4 million in indemnification liabilities for certain tax and other matters upon the closing of the transactions as an adjustment to the net loss on the dispositions within discontinued operations at their fair value. We estimated the indemnification liabilities using a probability-weighted expected cash flow approach. During the first quarter of 2020, we decreased our indemnification liabilities due to the expiration of certain indemnification obligations. The resulting benefit of $0.4 million is recorded within Income (loss) from discontinued operations on the condensed consolidated statement of operations for the nine months ended September 30, 2020. Our remaining indemnification liabilities were $2.8 million as of September 30, 2020. We estimate that the total amount of obligations that are reasonably possible to arise under the indemnifications in excess of amounts accrued as of September 30, 2020 is approximately $11.7 million.

In the normal course of business to facilitate transactions related to our operations, we indemnify certain parties, including employees, lessors, service providers, merchants, and counterparties to investment agreements and asset and stock purchase agreements with respect to various matters. We have agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or other claims made against those parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. We are also subject to increased exposure to various claims as a result of our divestitures and acquisitions, particularly in cases where we are entering into new businesses in connection with such acquisitions. We may also become more vulnerable to claims as we expand the range and scope of our services

and are subject to laws in jurisdictions where the underlying laws with respect to potential liability are either unclear or less favorable. In addition, we have entered into indemnification agreements with our officers, directors and underwriters, and our bylaws contain similar indemnification obligations that cover officers, directors, employees and other agents. 

Except as noted above, it is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, any payments that we have made under these agreements have not had a material impact on our operating results, financial position or cash flows.

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS

STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS

Reverse Stock Split

On June 9, 2020, our stockholders approved amendments to our Restated Certificate of Incorporation to effect a reverse stock split of our shares of common stock, and our Board approved a final reverse stock split ratio of 1-for-20 and a corresponding reduction in the number of authorized shares of our common stock. The reverse stock split became effective on June 10, 2020. On the effective date, every 20 shares of issued and outstanding common stock were combined and converted into one issued and outstanding share of common stock. The number of authorized shares of Common Stock was reduced proportionately. Fractional shares were cancelled and stockholders received cash in lieu thereof and the par value per share of common stock remains unchanged. A proportionate adjustment was also made to the maximum number of shares of common stock issuable under the Groupon, Inc. Stock Plans (the "Plans"), and the Groupon, Inc. 2012 Employee Stock Purchase Plan, as amended ("ESPP").

As a result, the number of shares and income (loss) per share disclosed throughout this Quarterly Report on Form 10-Q have been retrospectively adjusted to reflect the reverse stock split.

Common Stock

Pursuant to our restated certificate of incorporation, as of September 30, 2020, the Board had the authority to issue up to a total of 100,500,000 shares of common stock. Each holder of common stock is entitled to one vote per share on any matter that is submitted to a vote of stockholders. In addition, holders of our common stock will vote as a single class of stock on any matter that is submitted to a vote of stockholders.

Share Repurchase Program

In May 2018, the Board authorized us to repurchase up to $300.0 million of our common stock under our share repurchase program. During the three and nine months ended September 30, 2020, we did not purchase any shares under the program. As of September 30, 2020, up to $245.0 million of common stock remained available for purchase under our program. The timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under the Amended Credit Agreement, share price, available cash and other factors, and the program may be terminated at any time.

Groupon, Inc. Stock Plans

The Plans are administered by the Compensation Committee of the Board (the "Compensation Committee"). As of September 30, 2020, 2,899,062 shares of common stock were available for future issuance under the Plans.

The stock-based compensation expense related to stock awards issued under the Plans are presented within the following line items of the condensed consolidated statements of operations for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Cost of revenue	$	156	$	405	$	496	$	1,163
Marketing	377		1,671		1,218		4,586
Selling, general and administrative	7,846		17,467		29,223		56,768
Restructuring and related charges	311		—		1,735		—
Total stock-based compensation expense	$	8,690	$	19,543	$	32,672	$	62,517

We capitalized $1.1 million and $2.0 million of stock-based compensation for the three months ended September 30, 2020 and 2019, and $3.4 million and $5.5 million for the nine months ended September 30, 2020 and 2019 in connection with internally-developed software and cloud computing arrangements.

Employee Stock Purchase Plan

The ESPP authorizes us to grant up to 1,000,000 shares of common stock under that plan as of September 30, 2020. For the nine months ended September 30, 2020 and 2019, 69,371 and 74,300 shares of common stock were issued under the ESPP.

Restricted Stock Units

The restricted stock units granted under the Plans generally have vesting periods between one and four years and are amortized on a straight-line basis over their requisite service period.

The table below summarizes restricted stock unit activity under the Plans for the nine months ended September 30, 2020:

	Restricted Stock Units	Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2019	1,527,014	$	74.80
Granted	1,744,782	24.59
Vested	(596,183)	74.86
Forfeited	(720,949)	65.70
Unvested at September 30, 2020	1,954,664	33.41

As of September 30, 2020, $49.7 million of unrecognized compensation costs related to unvested restricted stock units are expected to be recognized over a remaining weighted-average period of 1.09 years.

Performance Share Units

We grant performance share units under the Plans that vest in shares of our common stock upon the achievement of financial and operational targets specified in the respective award agreement ("Performance Share Units"). During the nine months ended September 30, 2019, we also granted performance share units subject to a market condition ("Market-based Performance Share Units").

The Market-based Performance Share Units will vest if our average daily closing stock price is equal to or greater than $120.00 per share over a period of 30 consecutive trading days prior to December 31, 2022 or if a change in control occurs during the performance period at the specified stock price (and on a proportional basis for a change in control price between the grant date price and the specified stock price). We used a Monte Carlo simulation to calculate the grant date fair value of the awards and the related derived service period over which we recognized the expense. The key inputs used in the Monte Carlo simulation were the risk-free rate, our volatility of 49.8% and our cost of equity of 12.8%. We did not recognize any compensation costs related to our Market-based Performance Share Units during the three months ended September 30, 2020 as the derived service period ended during the first quarter 2020, at which time these awards were fully expensed.

Our Performance Share Units and Market-based Performance Share Units are subject to continued employment through the performance period dictated by the award and certification by the Compensation Committee that the specified performance conditions have been achieved.

The table below summarizes Performance Share Unit activity under the Plans for the nine months ended September 30, 2020:

	Performance Share Units	Weighted-Average Grant Date Fair Value (per unit)		Market-based Performance Share Units	Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2019	203,853	$	79.76	341,002	$	60.60
Granted	96,598	15.44		—	—
Vested	(104,441)	80.77		—	—
Forfeited	(71,128)	79.94		(91,668)	60.60
Unvested at September 30, 2020	124,882	29.78		249,334	60.60
Maximum shares issuable upon vesting at September 30, 2020	173,181			249,334

As of September 30, 2020, $1.5 million of unrecognized compensation costs related to unvested Performance Share Units are expected to be recognized over a remaining weighted-average period of 1.44 years. We have recognized all compensation costs related to our unvested Market-Based Performance Share Units.

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REVENUE RECOGNITION

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

REVENUE RECOGNITION

Refer to Note 13, Segment Information, for revenue summarized by reportable segment and category for the three and nine months ended September 30, 2020 and 2019.

Contract Balances

A substantial majority of our deferred revenue relates to product sales for which revenue will be recognized as the products are delivered to customers, generally within one week following the balance sheet date. Our deferred revenue was $10.6 million as of September 30, 2020. As of December 31, 2019, our deferred revenue was $18.0 million, all of which was recognized during the nine months ended September 30, 2020.

Customer Credits

We issue credits to customers that can be applied to future purchases through our online marketplaces. Credits are primarily issued as consideration for refunds. To a lesser extent, credits are issued for customer

relationship purposes. The following table summarizes the activity in the liability for customer credits for the nine months ended September 30, 2020 (in thousands):

	Customer Credits
Balance as of December 31, 2019	$	13,764
Credits issued	153,638
Credits redeemed (1)	(102,373)
Breakage revenue recognized	(15,055)
Foreign currency translation	856
Balance as of September 30, 2020	$	50,830

(1)Customer credits can be redeemed through our online marketplaces for goods or services provided by a third-party merchant or for merchandise inventory sold by us. When customer credits are redeemed for goods or services provided by a third-party merchant, service revenue is recognized on a net basis as the difference between the carrying amount of the customer credit liability derecognized and the amount due to the merchant for the related transaction. When customer credits are redeemed for merchandise inventory sold by us, product revenue is recognized on a gross basis equal to the amount of the customer credit liability derecognized. Customer credits are primarily used within one year of issuance.

Costs of Obtaining Contracts

Incremental costs to obtain contracts with third-party merchants, such as sales commissions, are deferred and recognized over the expected period of the merchant arrangement, generally from 12 to 18 months. Deferred contract acquisition costs are presented within the following line items of the condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Prepaid expenses and other current assets	$	1,132	$	2,501
Other non-current assets	4,856		10,133

The amortization of deferred contract acquisition costs is classified within Selling, general and administrative expense in the condensed consolidated statements of operations. We amortized $3.6 million and $5.0 million of deferred contract acquisition costs during the three months ended September 30, 2020 and 2019, and $12.3 million and $15.5 million during the nine months ended September 30, 2020 and 2019. We did not recognize any impairments in relation to the deferred contract acquisition costs during the three and nine months ended September 30, 2020 and 2019.

Allowance for Expected Credit Losses on Accounts Receivable

We establish an allowance for expected credit losses on accounts receivables based on identifying the following customer risk characteristics: size, type of customer, and payment terms offered in the normal course of business. Receivables with similar risk characteristics are grouped into pools. For each pool, we consider the historical credit loss experience, current economic conditions, bankruptcy filings, published or estimated credit default rates, age of the receivable and any recoveries in assessing the lifetime expected credit losses.

The following table summarizes the activity in the allowance for expected credit losses on accounts receivables for the nine months ended September 30, 2020 (in thousands):

	Allowance for Expected Credit Losses
Balance as of January 1, 2020	$	3,693
Change in Provision	8,683
Write-offs	(2,330)
Foreign currency translation	187
Balance as of September 30, 2020	$	10,233

Variable Consideration for Unredeemed Vouchers

For merchant agreements with redemption payment terms, the merchant is not paid its share of the sale price for a voucher sold through one of our online marketplaces until the customer redeems the related voucher. If the customer does not redeem a voucher with such merchant payment terms, we retain all of the gross billings for that voucher, rather than retaining only our net commission. We estimate the variable consideration from vouchers that will not ultimately be redeemed using our historical voucher redemption experience and recognize that amount as revenue at the time of sale. We only recognize amounts in variable consideration when we believe it is probable that a significant reversal of revenue will not occur in future periods, which requires us to make significant estimates of future redemptions. If actual redemptions differ from our estimates, the effects could be material to the condensed consolidated financial statements. As of September 30, 2020 and December 31, 2019, we constrained $41.0 million and $14.6 million in revenue from unredeemed vouchers that we may recognize in future periods when we determine it is probable that a significant amount of that revenue will not be subsequently reversed. We have increased our constraint on revenue from unredeemed vouchers due to variability in customer redemption behavior due to the impacts of COVID-19. In addition, the revenue we have constrained on unredeemed vouchers has increased in connection with our increased use of pay on redemption terms for our North America merchants.

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RESTRUCTURING AND RELATED CHARGES

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

RESTRUCTURING AND RELATED CHARGES

RESTRUCTURING AND RELATED CHARGES

In April 2020, the Board approved a multi-phase restructuring plan of up to $105.0 million of total pretax charges related to our previously announced strategic shift and as part of the cost cutting measures implemented in response to the impact of COVID-19 on our business. We expect to incur total pretax charges of $75.0 million to $105.0 million in connection with the multi-phase restructuring actions through the end of 2021. The first phase of the restructuring actions includes an overall reduction of approximately 1,300 positions globally and the exit or discontinuation of the use of certain leases and other assets by the end of 2020. The majority of the first phase of workforce reductions and impairments of our right-of-use and other long-lived assets occurred during the second quarter 2020. In the third quarter 2020, we initiated the second phase of our restructuring plan, which included additional workforce reductions and the exit of our operations in New Zealand and Japan. The majority of our restructuring charges are expected to be paid in cash and primarily relate to employee severance and benefits expenses, facilities-related costs and impairment charges and professional advisory fees. We will continue to evaluate our cost structure, including additional workforce reductions, as part of our restructuring plan. Costs incurred related to the restructuring plan are classified as Restructuring and related charges on the condensed consolidated statements of operations.

The following table summarizes costs incurred by segment related to the restructuring plans for both the three and nine months ended September 30, 2020 (in thousands):

	Three Months Ended September 30, 2020
	Employee Severance and Benefit Costs (1)		Legal and Advisory Costs		Property, Equipment and Software Impairments		Right-of-Use Asset Impairments and Lease-related Charges (Credits)		Total Restructuring Charges (Credits)
North America	$	1,489	$	435	$	70	$	736	$	2,730
International	14,400		18		195		3,216		17,829
Consolidated	$	15,889	$	453	$	265	$	3,952	$	20,559

(1)The employee severance and benefits costs for the three months ended September 30, 2020 are related to the termination of and planned termination of approximately 500 employees. Additional severance and benefits costs may be incurred in future periods. Substantially all of the remaining cash payments for the costs accrued as of September 30, 2020 are expected to be disbursed by the end of 2020.

	Nine Months Ended September 30, 2020
	Employee Severance and Benefit Costs (1)		Legal and Advisory Costs		Property, Equipment and Software Impairments		Right-of-Use Asset Impairments and Lease-related Charges (Credits)		Total Restructuring Charges (Credits)
North America	$	17,548	$	443	$	4,790	$	10,047	$	32,828
International	23,041		759		227		4,182		28,209
Consolidated	$	40,589	$	1,202	$	5,017	$	14,229	$	61,037

(1)The employee severance and benefits costs for the nine months ended September 30, 2020 are related to the termination and planned termination of approximately 1,200 employees. Additional severance and benefits costs may be incurred in future periods. Substantially all of the remaining cash payments for the costs accrued as of September 30, 2020 are expected to be disbursed by the end of 2020.

As a part of our restructuring plan, we vacated several of our leased facilities, and many of those facilities are being actively marketed for sublease or we are in negotiations with the landlord to potentially terminate or modify those leases. During the nine months ended September 30, 2020, we recognized $17.2 million in restructuring charges related to the impairment of right-of-use assets and leasehold improvements related to those leases as we reduced the carrying value of the those assets to their respective fair value. See Note 2, Goodwill and Long-Lived Assets for more information. Rent expense, including amortization of the right-of-use asset and accretion of the operating lease liability, sublease income and other variable lease costs related to the leased facilities vacated as part of our restructuring plan are presented within Restructuring and related charges in the condensed consolidated statements of operations. The current and non-current liabilities associated with these leases continue to be presented within Other current liabilities and Operating lease obligations in the condensed consolidated balance sheets.

The following table summarizes restructuring liability activity for the nine months ended September 30, 2020 (in thousands):

	Employee Severance and Benefit Costs		Legal and Advisory Costs		Total
Balance as of December 31, 2019 (1)	$	699	$	—	$	699
Charges payable in cash (2)	38,854		1,202		40,056
Cash payments	(20,319)		(753)		(21,072)
Foreign currency translation	722		62		784
Balance as of September 30, 2020	$	19,956	$	511	$	20,467

(1)Amounts included in the beginning balance are related to prior restructuring plans and the liabilities under those plans have been substantially settled.

(2)Excludes stock-based compensation of $1.7 million related to accelerated vesting of stock-based compensation awards for certain employees terminated as a result of our restructuring activities during the nine months ended September 30, 2020.

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INCOME TAXES

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items.

Provision (benefit) for income taxes and income (loss) from continuing operations before provision (benefit) for income taxes for the three and nine months ended September 30, 2020 and 2019 was as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Provision (benefit) for income taxes	$	(486)	$	2,069	$	(7,170)	$	591
Income (loss) from continuing operations before provision (benefit) for income taxes	(17,047)		(12,616)		(307,703)		(92,909)

Our U.S. Federal income tax rate is 21%. The primary factors impacting the effective tax rate for the three and nine months ended September 30, 2020 and 2019 were the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets. The nine months ended September 30, 2020 and 2019 were impacted by the reversals of reserves for uncertain tax positions due to the closure of tax audits. The nine months ended September 30, 2020 were also impacted by the carryback of federal net operating losses due to the income tax relief provided by the CARES Act. We expect that our consolidated effective tax rate in future periods will continue to differ significantly from the U.S. federal income tax rate as a result of our tax obligations in jurisdictions with profits and valuation allowances in jurisdictions with losses.

We are currently undergoing income tax audits in multiple jurisdictions. It is likely that the examination phase of some of those audits will conclude in the next 12 months. There are many factors, including factors outside of our control, which influence the progress and completion of those audits. We are subject to claims for tax assessments by foreign jurisdictions, including a proposed assessment for $119.1 million, inclusive of estimated incremental interest from the original assessment. We believe that the assessment, which primarily relates to transfer pricing on transactions occurring in 2011, is without merit and we intend to vigorously defend ourselves in that matter. In addition to any potential increases in our liabilities for uncertain tax positions from the ultimate resolution of that assessment, we believe that it is reasonably possible that reductions of up to $5.8 million in unrecognized tax benefits may occur within the 12 months following September 30, 2020 upon closing of income tax audits or the expiration of applicable statutes of limitations.

In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations. Additionally, while we did not incur the deemed repatriation tax, an actual repatriation from our non-U.S. subsidiaries could be subject to foreign and U.S. state income taxes. Aside from limited exceptions for which the related deferred tax liabilities recognized as of September 30, 2020 and December 31, 2019 are immaterial, we do not intend to distribute earnings of foreign subsidiaries for which we have an excess of the financial reporting basis over the tax basis of our investments and therefore have not recorded any deferred taxes related to such amounts. The actual tax cost resulting from a distribution would depend on income tax laws and circumstances at the time of distribution. Determination of the amount of unrecognized deferred tax liability related to the excess of the financial reporting basis over the tax basis of our foreign subsidiaries is not practical due to the complexities associated with the calculation.

Groupon uses a cost-sharing arrangement under which controlled members agree to share the costs and risks of developing intangible properties in accordance with their reasonably anticipated share of benefits from the intangibles. In 2019, the Ninth Circuit Court of Appeals entered a decision in Altera Corp. v. Commissioner requiring related parties in an intercompany cost-sharing arrangement to share expenses related to stock-based compensation. Altera then petitioned the United States Supreme Court to review the Ninth Circuit's decision. In June 2020, the Supreme Court denied this petition, and accordingly, the Ninth Circuit's Altera decision stands. The Altera decision did not have a material impact on our provision for income taxes for the year ended December 31, 2019, and is not expected to have an impact for the year ended December 31, 2020.

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

Fair value is defined under U.S. GAAP as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability.

To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs in valuation methodologies used to measure fair value:

Level 1 - Measurements that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Measurements that include other inputs that are directly or indirectly observable in the marketplace.

Level 3 - Measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. These fair value measurements require significant judgment.

In determining fair value, we use various valuation approaches within the fair value measurement framework. The valuation methodologies used for our assets and liabilities measured at fair value and their classification in the valuation hierarchy are summarized below:

Fair value option investments and available-for-sale securities. We use the discounted cash flow method, which is an income approach, to estimate the fair value of the investees. The key inputs to determining fair values under that approach are cash flow forecasts and discount rates. We also use a market approach valuation technique, which is based on market multiples of guideline companies, to determine the fair value of each entity.

We also have investments in redeemable preferred shares. We measure the fair value of those available-for-sale securities using the discounted cash flow method.

We have classified our fair value option investments and our investments in available-for-sale securities as Level 3 due to the lack of observable market data over fair value inputs such as cash flow projections and discount rates. Increases in projected cash flows and decreases in discount rates contribute to increases in the estimated fair values of the fair value option investments and available-for-sale securities, whereas decreases in projected cash flows and increases in discount rates contribute to decreases in their fair values. Our fair value option investments were $0.0 million and $1.4 million as of September 30, 2020 and December 31, 2019.

Contingent consideration. We are subject to a contingent consideration arrangement to transfer a maximum payout in cash of $2.5 million to the former owners of a business acquired on April 30, 2018.

Liabilities for contingent consideration are measured at fair value each reporting period, with the acquisition-date fair value included as part of the consideration transferred in the related business combination and subsequent changes in fair value recorded in earnings within Selling, general and administrative expense on the condensed consolidated statements of operations.

We use an income approach to value contingent consideration obligations based on the present value of probability-weighted future cash flows. We classify the contingent consideration liabilities as Level 3 due to the lack of relevant observable market data over fair value inputs such as probability-weighting of payment outcomes. We determined that the fair value of our contingent consideration was $0.3 million and $1.3 million as of September 30, 2020 and December 31, 2019.

The following table provides a roll forward of the fair value of recurring Level 3 fair value measurements for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Assets
Fair value option investments:
Beginning Balance	$	—	$	4,917	$	1,405	$	73,902
Total gains (losses) included in earnings	—		14		(1,405)		(68,971)
Ending Balance	$	—	$	4,931	$	—	$	4,931
Unrealized gains (losses) still held (1)	$	—	$	14	$	(1,405)	$	(68,971)
Available-for-sale securities - Redeemable preferred shares:
Beginning Balance	$	—	$	10,201	$	—	$	10,340
Total gains (losses) included in other comprehensive income (loss)	—		(63)		—		(202)
Ending Balance	$	—	$	10,138	$	—	$	10,138
Unrealized gains (losses) still held (1)	$	—	$	(63)	$	—	$	(202)
Liabilities
Contingent Consideration:
Beginning Balance	$	278	$	1,239	$	1,298	$	1,529
Settlements of contingent consideration liabilities	—		—		(908)		(312)
Total losses (gains) included in earnings	—		6		6		33
Foreign currency translation	13		(38)		(105)		(43)
Ending Balance	$	291	$	1,207	$	291	$	1,207
Unrealized gains (losses) still held (1)	$	—	$	6	$	6	$	33

(1)Represents the unrealized gains or losses recorded in earnings and/or other comprehensive income (loss) during the period for assets and liabilities classified as Level 3 that are still held (or outstanding) at the end of the period.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis, including assets that are written down to fair value as a result of an impairment or increased due to an observable price change in an orderly transaction.

We recognized $109.5 million in non-cash impairment charges related to goodwill and $39.6 million in non-cash impairment charges related to long-lived assets during the nine months ended September 30, 2020, of which $17.2 million is included in Restructuring and related charges on our condensed consolidated statement of operations. See Note 2, Goodwill and Long-Lived Assets, and Note 9, Restructuring and Related Charges, for additional information.

We recognized $6.7 million in impairment charges related to an other equity method investment during the nine months ended September 30, 2020. See Note 3, Investments, for additional information.

We did not record any other significant nonrecurring fair value measurements after initial recognition for the three and nine months ended September 30, 2020 and 2019.

Estimated Fair Value of Financial Assets and Liabilities Not Measured at Fair Value

Our financial instruments not carried at fair value consist primarily of accounts receivable, restricted cash, short-term borrowings, accounts payable, accrued merchant and supplier payables and accrued expenses. The carrying values of those assets and liabilities approximate their respective fair values as of September 30, 2020 and December 31, 2019 due to their short-term nature.

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INCOME (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

INCOME (LOSS) PER SHARE

INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of common shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities include stock options, restricted stock units, performance share units, performance bonus awards, ESPP shares, warrants and convertible senior notes. If dilutive, those potentially dilutive securities are reflected in diluted net income (loss) per share using the treasury stock method, except for the convertible senior notes, which are subject to the if-converted method.

The following table sets forth the computation of basic and diluted net income (loss) per share of common stock for the three and nine months ended September 30, 2020 and 2019 (in thousands, except share amounts and per share amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Basic and diluted net income (loss) per share:
Numerator
Net income (loss) - continuing operations	$	(16,561)	$	(14,685)	$	(300,533)	$	(93,500)
Less: Net income (loss) attributable to noncontrolling interests	(291)		2,000		1,758		8,080
Net income (loss) attributable to common stockholders - continuing operations	(16,270)		(16,685)		(302,291)		(101,580)
Net income (loss) attributable to common stockholders - discontinued operations	—		—		382		2,162
Net income (loss) attributable to common stockholders	$	(16,270)	$	(16,685)	$	(301,909)	$	(99,418)
Denominator
Weighted-average common shares outstanding	28,751,520		28,348,561		28,535,393		28,416,966
Basic and diluted net income (loss) per share:
Continuing operations	$	(0.57)	$	(0.59)	$	(10.59)	$	(3.57)
Discontinued operations	—		—		0.01		0.08
Basic and diluted net income (loss) per share	$	(0.57)	$	(0.59)	$	(10.58)	$	(3.49)

The following weighted-average potentially dilutive instruments are not included in the diluted net income (loss) per share calculations above because they would have had an antidilutive effect on the net income (loss) per share from continuing operations:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2020	2019	2020	2019
Restricted stock units	1,907,396	1,768,908	1,879,752	1,657,446
Performance share units and other stock-based compensation awards	151,110	78,055	199,849	81,545
Convertible senior notes	2,314,815	2,314,815	2,314,815	2,314,815
Warrants	2,314,815	2,314,815	2,314,815	2,314,815
Total	6,688,136	6,476,593	6,709,231	6,368,621

We had outstanding performance share units as of September 30, 2020 and 2019 that were eligible to vest into shares of common stock subject to the achievement of specified performance or market conditions. Contingently issuable shares are excluded from the computation of diluted earnings per share if, based on current period results, the shares would not be issuable if the end of the reporting period were the end of the contingency period. As of September 30, 2020, there were up to 268,654 shares of common stock issuable upon vesting of outstanding performance share units that were excluded from the table above as the performance or market conditions were not satisfied as of the end of the period.

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SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The segment information reported in the tables below reflects the operating results that are regularly reviewed by our chief operating decision maker to assess performance and make resource allocation decisions. Our operations are organized into two segments: North America and International. During the third quarter 2020, we changed our measure of segment profitability from operating income (loss) to contribution profit, defined as gross profit less marketing expense, which is consistent with how management reviews the operating results of the segments. Contribution profit measures the amount of marketing investment needed to generate gross profit. Other operating expenses are excluded from contribution profit as management does not review those expenses by segment. Prior period segment information has been retrospectively adjusted to reflect the change.

The following table summarizes revenue by reportable segment and category for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
North America
Service revenue:
Local	$	98,561	$	175,140	$	322,945	$	532,599
Goods	8,787		3,000		18,401		9,841
Travel	4,748		13,680		13,722		48,746
Total service revenue	112,096		191,820		355,068		591,186
Product revenue - Goods	68,215		111,776		293,729		394,235
Total North America revenue (1)	180,311		303,596		648,797		985,421
International
Service revenue:
Local	36,528		65,440		103,221		208,625
Goods	3,309		2,817		8,821		6,882
Travel	3,140		8,003		7,368		24,817
Total service revenue	42,977		76,260		119,410		240,324
Product revenue - Goods	80,731		115,756		305,608		380,854
Total International revenue (1)	$	123,708	$	192,016	$	425,018	$	621,178

(1)North America includes revenue from the United States of $177.3 million and $297.9 million for the three months ended September 30, 2020 and 2019, and $640.4 million and $965.9 million for the nine months ended September 30, 2020 and 2019. International includes revenue from the United Kingdom of $42.9 million and $69.4 million for the three months ended September 30, 2020 and 2019, and $151.1 million and $221.8 million for the nine months ended September 30, 2020 and 2019. There were no other individual countries that represented more than 10% of consolidated total revenue for the three and nine months ended September 30, 2020 and 2019. Revenue is attributed to individual countries based on the location of the customer.

The following table summarizes gross profit by reportable segment and category for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
North America
Service gross profit:
Local	$	87,507	$	155,032	$	283,004	$	473,787
Goods	7,440		2,280		14,851		7,838
Travel	3,874		10,717		9,726		38,791
Total service gross profit	98,821		168,029		307,581		520,416
Product gross profit - Goods	10,896		24,046		47,599		80,045
Total North America gross profit	109,717		192,075		355,180		600,461
International
Service gross profit:
Local	33,687		61,183		93,054		195,941
Goods	2,849		2,589		7,422		6,241
Travel	2,711		7,332		6,259		22,743
Total service gross profit	39,247		71,104		106,735		224,925
Product gross profit - Goods	11,058		14,761		36,580		50,702
Total International gross profit	$	50,305	$	85,865	$	143,315	$	275,627

The following table summarizes contribution profit by reportable segment for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
North America
Gross profit	$	109,717	$	192,075	$	355,180	$	600,461
Marketing	19,718		45,223		73,203		162,132
Contribution profit	89,999		146,852		281,977		438,329
International
Gross profit	50,305		85,865		143,315		275,627
Marketing	11,668		29,753		43,555		95,164
Contribution profit	38,637		56,112		99,760		180,463
Consolidated
Gross profit	160,022		277,940		498,495		876,088
Marketing	31,386		74,976		116,758		257,296
Contribution profit	128,636		202,964		381,737		618,792
Selling, general and administrative	124,257		198,388		475,017		619,274
Goodwill impairment	—		—		109,486		—
Long-lived asset impairment	—		—		22,351		—
Restructuring and related charges	20,559		(61)		61,037		(175)
Income (loss) from operations	$	(16,180)	$	4,637	$	(286,154)	$	(307)

The following table summarizes total assets by reportable segment as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Total assets:
North America (1)	$	1,071,325	$	1,045,500
International (1)	278,493		541,243
Consolidated total assets	$	1,349,818	$	1,586,743

(1)North America contains assets from the United States of $1,047.9 million and $1,020.0 million as of September 30, 2020 and December 31, 2019. International contains assets from Switzerland of $128.5 million and $175.2 million as of September 30, 2020 and December 31, 2019. There were no other individual countries that represented more than 10% of consolidated total assets as of September 30, 2020 and December 31, 2019.

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies)

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Groupon, Inc. and its wholly-owned subsidiaries, majority-owned subsidiaries over which we exercise control and variable interest entities for which we are the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation. Outside stockholders' interests in subsidiaries are shown on the condensed consolidated financial statements as Noncontrolling interests.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Estimates in our financial statements include, but are not limited to, the following: variable consideration from unredeemed vouchers, income taxes, leases, initial valuation and subsequent impairment testing of goodwill, other intangible assets and long-lived assets, investments, receivables, customer refunds and other reserves, contingent liabilities, and the useful lives of property, equipment and software and intangible assets. Actual results could differ materially from those estimates.

Reclassifications

Reclassifications

Certain reclassifications have been made to the condensed consolidated financial statements of prior periods to conform to the current period presentation.

Adoption of New Accounting Standards

Adoption of New Accounting Standards

We adopted the guidance in ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses of Financial Instruments ("CECL") on January 1, 2020. This ASU requires entities to measure credit losses for financial assets measured at amortized cost based on expected losses over the lifetime of the asset rather than incurred losses. The adoption of ASU 2016-13 did not have a material impact on the condensed consolidated financial statements. See Note 8, Revenue Recognition, for additional information.

We adopted the guidance in ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment on January 1, 2020. This ASU eliminates Step 2 of the goodwill impairment test and requires a goodwill impairment to be measured as the amount by which a reporting unit's carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. During the first quarter 2020, we determined a triggering event occurred that required us to evaluate our goodwill for impairment, and we recorded an impairment charge as a result of that assessment. See Note 2, Goodwill and Long-Lived Assets, for additional information.

We adopted the guidance in ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement on January 1, 2020. This ASU modifies the disclosure requirements in Topic 820, Fair Value Measurements, by removing, modifying, or adding certain disclosures. The adoption of ASU 2018-13 did not have a material impact on the condensed consolidated financial statements.

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GOODWILL AND LONG-LIVED ASSETS (Tables)

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table summarizes goodwill activity by segment for the nine months ended September 30, 2020 (in thousands):

	North America		International (1)		Consolidated
Balance as of December 31, 2019	$	178,685	$	146,332	$	325,017
Impairment loss	—		(109,486)		(109,486)
Foreign currency translation	—		(2,522)		(2,522)
Balance as of September 30, 2020	$	178,685	$	34,324	$	213,009

(1)As of September 30, 2020, the International reporting unit had a negative carrying value.

Schedule of Impairment

Impairment charges are presented within the following line items of the condensed consolidated statements of operations for the three and nine months ended September 30, 2020 (in thousands):

	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
Long-lived asset impairment	$	—	$	22,351
Restructuring and related charges	3,296		17,199
Total impairment	$	3,296	$	39,550

The following table summarizes impairment for long-lived assets and restructuring and related charges by asset type through September 30, 2020 (in thousands):

Long-Lived Asset Category	Impairment
Property, equipment and software, net
Furniture and fixtures	$	413
Leasehold improvements (1)	7,749
Office equipment	198
Purchased software	14
Computer hardware	2,842
Right-of-use assets - finance leases, net	1,388
Capitalized software	304
Internally-developed software	2,988
Total Property, equipment and software, net	$	15,896
Right-of-use assets - operating leases, net (2)	22,680
Intangible assets, net	103
Other non-current assets	871
Total long-lived assets	$	39,550

(1)Includes long-lived asset impairment of $5.0 million presented within Restructuring and related charges during the nine months ended September 30, 2020. See Note 9, Restructuring and Related Charges, for more information.

(2)Includes right-of-use asset impairment of $12.2 million during the nine months ended September 30, 2020. See Note 9, Restructuring and Related Charges, for more information.

Schedule of Intangible Assets

The following table summarizes intangible assets as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020						December 31, 2019
Intangible Asset Category	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships	$	16,200	$	16,200	$	—	$	16,200	$	16,200	$	—
Merchant relationships	21,668		10,557		11,111		22,193		8,268		13,925
Trade names	9,491		7,771		1,720		9,558		7,369		2,189
Developed technology	2,319		1,906		413		3,651		2,685		966
Patents	25,809		19,850		5,959		23,021		18,167		4,854
Other intangible assets	26,736		14,974		11,762		26,115		12,757		13,358
Total	$	102,223	$	71,258	$	30,965	$	100,738	$	65,446	$	35,292

Schedule of Estimated Future Amortization Expense

As of September 30, 2020, estimated future amortization expense related to intangible assets is as follows (in thousands):

Remaining amounts in 2020	$	2,312
2021	8,173
2022	7,577
2023	6,426
2024	2,840
Thereafter	3,637
Total	$	30,965

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INVESTMENTS (Tables)

9 Months Ended

Sep. 30, 2020

Schedule of Equity Method Investments [Abstract]

Summary of Investments

The following table summarizes investments as of September 30, 2020 and December 31, 2019 (dollars in thousands):

	September 30, 2020		Percent Ownership of Voting Stock			December 31, 2019		Percent Ownership of Voting Stock
Available-for-sale securities - redeemable preferred shares	$	—	19%	to	25%	$	—	19%	to	25%
Fair value option investments	—		10%	to	19%	1,405		10%	to	19%
Other equity investments	35,911		1%	to	19%	75,171		1%	to	19%
Total investments	$	35,911				$	76,576

Schedule of Gains and Losses due to Changes in Fair Value of Investments

There were no material changes in fair value of those investments for the three months ended September 30, 2020 and 2019. The following table summarizes gains and losses due to changes in fair value of those investments for the nine months ended September 30, 2020 and 2019 (in thousands):

	Nine Months Ended September 30,
	2020		2019
Monster LP	$	—	$	(69,408)
Nearbuy	(1,405)		437
Total	$	(1,405)	$	(68,971)

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SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION (Tables)

9 Months Ended

Sep. 30, 2020

Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]

Schedule of Other Income (Expense)

The following table summarizes other income (expense), net for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Interest income	$	1,268	$	1,959	$	5,254	$	5,810
Interest expense	(9,408)		(6,029)		(24,375)		(17,162)
Changes in fair value of investments	—		14		(1,405)		(68,971)
Foreign currency gains (losses), net	7,273		(13,197)		5,661		(12,279)
Impairment of investment	—		—		(6,684)		—
Other income (expense), net	$	(867)	$	(17,253)	$	(21,549)	$	(92,602)

Schedule of Prepaid and Other Current Assets

The following table summarizes prepaid expenses and other current assets as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Merchandise inventories	$	4,944	$	25,426
Prepaid expenses	16,069		27,077
Income taxes receivable	13,585		4,791
Other	17,360		24,779
Total prepaid expenses and other current assets	$	51,958	$	82,073

Schedule of Other Non-Current Assets

The following table summarizes other non-current assets as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Deferred income tax	$	4,932	$	4,829
Debt issue costs, net	2,342		2,156
Deferred commissions expense	4,856		10,133
Deferred cloud implementation costs	10,175		7,372
Other	3,756		4,115
Total other non-current assets	$	26,061	$	28,605

Schedule of Accrued Merchant and Supplier Payables

The following table summarizes accrued merchant and supplier payables as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Accrued merchant payables	$	297,018	$	366,573
Accrued supplier payables (1)	84,838		174,367
Total accrued merchant and supplier payables	$	381,856	$	540,940

(1)Amounts include payables to suppliers of inventories and providers of shipping and fulfillment services.

Schedule of Accrued Expenses and Other Current Liabilities

The following table summarizes accrued expenses and other current liabilities as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Refund reserve	$	29,566	$	22,002
Compensation and benefits	37,711		49,009
Accrued marketing	10,256		41,110
Restructuring-related liabilities	19,753		—
Customer credits	50,830		13,764
Income taxes payable	1,221		5,044
Deferred revenue	10,635		17,951
Operating and finance lease obligations	38,055		40,768
Deferred cloud computing contract incentive	3,000		—
Other	56,271		70,544
Total accrued expenses and other current liabilities	$	257,298	$	260,192

Schedule of Other Non-current Liabilities

The following table summarizes other non-current liabilities as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Contingent income tax liabilities	$	28,725	$	30,121
Finance lease obligations	1,126		5,831
Restructuring-related liabilities	714		—
Deferred income taxes	3,832		3,903
Deferred payroll taxes (1)	5,024		—
Deferred cloud computing contract incentive	5,000		—
Other	5,675		5,132
Total other non-current liabilities	$	50,096	$	44,987

(1)We have elected to defer certain payroll taxes under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act. These amounts are due beginning December 31, 2021.

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FINANCING ARRANGEMENTS (Tables)

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Schedule of Notes

The carrying amount of the Notes consisted of the following as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Liability component:
Principal amount	$	250,000	$	250,000
Less: debt discount	(24,307)		(35,131)
Net carrying amount of liability component	$	225,693	$	214,869
Net carrying amount of equity component	$	67,014	$	67,014

Schedule of Convertible Debt Interest Expense

During the three and nine months ended September 30, 2020 and 2019, we recognized interest costs on the Notes as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Contractual interest (3.25% of the principal amount per annum)	$	2,032	$	2,032	$	6,096	$	6,096
Amortization of debt discount	3,701		3,341		10,824		9,772
Total	$	5,733	$	5,373	$	16,920	$	15,868

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COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Payments Under Contractual Obligations

During the nine months ended September 30, 2020, we entered into non-cancellable arrangements for cloud computing services and software. Future payments under these new contractual obligations are as follows (in thousands):

2020	$	5,810
2021	17,672
2022	17,118
2023 (1)	22,753
Total	$	63,353

(1)Includes $8.0 million in cloud computing arrangement costs for which the timing of settlement is based on usage. We expect to incur those costs over the three-year contract period ending in 2023.

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS (Tables)

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Share-based Payment Arrangement, Activity

The stock-based compensation expense related to stock awards issued under the Plans are presented within the following line items of the condensed consolidated statements of operations for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Cost of revenue	$	156	$	405	$	496	$	1,163
Marketing	377		1,671		1,218		4,586
Selling, general and administrative	7,846		17,467		29,223		56,768
Restructuring and related charges	311		—		1,735		—
Total stock-based compensation expense	$	8,690	$	19,543	$	32,672	$	62,517

We capitalized $1.1 million and $2.0 million of stock-based compensation for the three months ended September 30, 2020 and 2019, and $3.4 million and $5.5 million for the nine months ended September 30, 2020 and 2019 in connection with internally-developed software and cloud computing arrangements.

Schedule of Restricted Stock Unit Activity

The table below summarizes restricted stock unit activity under the Plans for the nine months ended September 30, 2020:

	Restricted Stock Units	Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2019	1,527,014	$	74.80
Granted	1,744,782	24.59
Vested	(596,183)	74.86
Forfeited	(720,949)	65.70
Unvested at September 30, 2020	1,954,664	33.41

Schedule of Performance and Market-based Performance Share Unit Activity

The table below summarizes Performance Share Unit activity under the Plans for the nine months ended September 30, 2020:

	Performance Share Units	Weighted-Average Grant Date Fair Value (per unit)		Market-based Performance Share Units	Weighted-Average Grant Date Fair Value (per unit)
Unvested at December 31, 2019	203,853	$	79.76	341,002	$	60.60
Granted	96,598	15.44		—	—
Vested	(104,441)	80.77		—	—
Forfeited	(71,128)	79.94		(91,668)	60.60
Unvested at September 30, 2020	124,882	29.78		249,334	60.60
Maximum shares issuable upon vesting at September 30, 2020	173,181			249,334

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REVENUE RECOGNITION (Tables)

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Schedule of Liability for Customer Credits

The following table summarizes the activity in the liability for customer credits for the nine months ended September 30, 2020 (in thousands):

	Customer Credits
Balance as of December 31, 2019	$	13,764
Credits issued	153,638
Credits redeemed (1)	(102,373)
Breakage revenue recognized	(15,055)
Foreign currency translation	856
Balance as of September 30, 2020	$	50,830

(1)Customer credits can be redeemed through our online marketplaces for goods or services provided by a third-party merchant or for merchandise inventory sold by us. When customer credits are redeemed for goods or services provided by a third-party merchant, service revenue is recognized on a net basis as the difference between the carrying amount of the customer credit liability derecognized and the amount due to the merchant for the related transaction. When customer credits are redeemed for merchandise inventory sold by us, product revenue is recognized on a gross basis equal to the amount of the customer credit liability derecognized. Customer credits are primarily used within one year of issuance.

Schedule of Costs of Obtaining Contracts

Incremental costs to obtain contracts with third-party merchants, such as sales commissions, are deferred and recognized over the expected period of the merchant arrangement, generally from 12 to 18 months. Deferred contract acquisition costs are presented within the following line items of the condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Prepaid expenses and other current assets	$	1,132	$	2,501
Other non-current assets	4,856		10,133

Schedule of Expected Credit Losses on Accounts Receivable

The following table summarizes the activity in the allowance for expected credit losses on accounts receivables for the nine months ended September 30, 2020 (in thousands):

	Allowance for Expected Credit Losses
Balance as of January 1, 2020	$	3,693
Change in Provision	8,683
Write-offs	(2,330)
Foreign currency translation	187
Balance as of September 30, 2020	$	10,233

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RESTRUCTURING AND RELATED CHARGES (Tables)

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Costs by Segment

The following table summarizes costs incurred by segment related to the restructuring plans for both the three and nine months ended September 30, 2020 (in thousands):

	Three Months Ended September 30, 2020
	Employee Severance and Benefit Costs (1)		Legal and Advisory Costs		Property, Equipment and Software Impairments		Right-of-Use Asset Impairments and Lease-related Charges (Credits)		Total Restructuring Charges (Credits)
North America	$	1,489	$	435	$	70	$	736	$	2,730
International	14,400		18		195		3,216		17,829
Consolidated	$	15,889	$	453	$	265	$	3,952	$	20,559

(1)The employee severance and benefits costs for the three months ended September 30, 2020 are related to the termination of and planned termination of approximately 500 employees. Additional severance and benefits costs may be incurred in future periods. Substantially all of the remaining cash payments for the costs accrued as of September 30, 2020 are expected to be disbursed by the end of 2020.

	Nine Months Ended September 30, 2020
	Employee Severance and Benefit Costs (1)		Legal and Advisory Costs		Property, Equipment and Software Impairments		Right-of-Use Asset Impairments and Lease-related Charges (Credits)		Total Restructuring Charges (Credits)
North America	$	17,548	$	443	$	4,790	$	10,047	$	32,828
International	23,041		759		227		4,182		28,209
Consolidated	$	40,589	$	1,202	$	5,017	$	14,229	$	61,037

(1)The employee severance and benefits costs for the nine months ended September 30, 2020 are related to the termination and planned termination of approximately 1,200 employees. Additional severance and benefits costs may be incurred in future periods. Substantially all of the remaining cash payments for the costs accrued as of September 30, 2020 are expected to be disbursed by the end of 2020.

Schedule of Restructuring Liability Activity

The following table summarizes restructuring liability activity for the nine months ended September 30, 2020 (in thousands):

	Employee Severance and Benefit Costs		Legal and Advisory Costs		Total
Balance as of December 31, 2019 (1)	$	699	$	—	$	699
Charges payable in cash (2)	38,854		1,202		40,056
Cash payments	(20,319)		(753)		(21,072)
Foreign currency translation	722		62		784
Balance as of September 30, 2020	$	19,956	$	511	$	20,467

(1)Amounts included in the beginning balance are related to prior restructuring plans and the liabilities under those plans have been substantially settled.

(2)Excludes stock-based compensation of $1.7 million related to accelerated vesting of stock-based compensation awards for certain employees terminated as a result of our restructuring activities during the nine months ended September 30, 2020.

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INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

Provision (benefit) for income taxes and income (loss) from continuing operations before provision (benefit) for income taxes for the three and nine months ended September 30, 2020 and 2019 was as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Provision (benefit) for income taxes	$	(486)	$	2,069	$	(7,170)	$	591
Income (loss) from continuing operations before provision (benefit) for income taxes	(17,047)		(12,616)		(307,703)		(92,909)

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of Recurring Level 3 Fair Value Measurements

The following table provides a roll forward of the fair value of recurring Level 3 fair value measurements for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Assets
Fair value option investments:
Beginning Balance	$	—	$	4,917	$	1,405	$	73,902
Total gains (losses) included in earnings	—		14		(1,405)		(68,971)
Ending Balance	$	—	$	4,931	$	—	$	4,931
Unrealized gains (losses) still held (1)	$	—	$	14	$	(1,405)	$	(68,971)
Available-for-sale securities - Redeemable preferred shares:
Beginning Balance	$	—	$	10,201	$	—	$	10,340
Total gains (losses) included in other comprehensive income (loss)	—		(63)		—		(202)
Ending Balance	$	—	$	10,138	$	—	$	10,138
Unrealized gains (losses) still held (1)	$	—	$	(63)	$	—	$	(202)
Liabilities
Contingent Consideration:
Beginning Balance	$	278	$	1,239	$	1,298	$	1,529
Settlements of contingent consideration liabilities	—		—		(908)		(312)
Total losses (gains) included in earnings	—		6		6		33
Foreign currency translation	13		(38)		(105)		(43)
Ending Balance	$	291	$	1,207	$	291	$	1,207
Unrealized gains (losses) still held (1)	$	—	$	6	$	6	$	33

(1)Represents the unrealized gains or losses recorded in earnings and/or other comprehensive income (loss) during the period for assets and liabilities classified as Level 3 that are still held (or outstanding) at the end of the period.

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INCOME (LOSS) PER SHARE (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share

The following table sets forth the computation of basic and diluted net income (loss) per share of common stock for the three and nine months ended September 30, 2020 and 2019 (in thousands, except share amounts and per share amounts):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Basic and diluted net income (loss) per share:
Numerator
Net income (loss) - continuing operations	$	(16,561)	$	(14,685)	$	(300,533)	$	(93,500)
Less: Net income (loss) attributable to noncontrolling interests	(291)		2,000		1,758		8,080
Net income (loss) attributable to common stockholders - continuing operations	(16,270)		(16,685)		(302,291)		(101,580)
Net income (loss) attributable to common stockholders - discontinued operations	—		—		382		2,162
Net income (loss) attributable to common stockholders	$	(16,270)	$	(16,685)	$	(301,909)	$	(99,418)
Denominator
Weighted-average common shares outstanding	28,751,520		28,348,561		28,535,393		28,416,966
Basic and diluted net income (loss) per share:
Continuing operations	$	(0.57)	$	(0.59)	$	(10.59)	$	(3.57)
Discontinued operations	—		—		0.01		0.08
Basic and diluted net income (loss) per share	$	(0.57)	$	(0.59)	$	(10.58)	$	(3.49)

Schedule of Weighted-Average Potentially Dilutive Instruments

The following weighted-average potentially dilutive instruments are not included in the diluted net income (loss) per share calculations above because they would have had an antidilutive effect on the net income (loss) per share from continuing operations:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2020	2019	2020	2019
Restricted stock units	1,907,396	1,768,908	1,879,752	1,657,446
Performance share units and other stock-based compensation awards	151,110	78,055	199,849	81,545
Convertible senior notes	2,314,815	2,314,815	2,314,815	2,314,815
Warrants	2,314,815	2,314,815	2,314,815	2,314,815
Total	6,688,136	6,476,593	6,709,231	6,368,621

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SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Schedule of Revenue by Reportable Segment

The following table summarizes revenue by reportable segment and category for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
North America
Service revenue:
Local	$	98,561	$	175,140	$	322,945	$	532,599
Goods	8,787		3,000		18,401		9,841
Travel	4,748		13,680		13,722		48,746
Total service revenue	112,096		191,820		355,068		591,186
Product revenue - Goods	68,215		111,776		293,729		394,235
Total North America revenue (1)	180,311		303,596		648,797		985,421
International
Service revenue:
Local	36,528		65,440		103,221		208,625
Goods	3,309		2,817		8,821		6,882
Travel	3,140		8,003		7,368		24,817
Total service revenue	42,977		76,260		119,410		240,324
Product revenue - Goods	80,731		115,756		305,608		380,854
Total International revenue (1)	$	123,708	$	192,016	$	425,018	$	621,178

(1)North America includes revenue from the United States of $177.3 million and $297.9 million for the three months ended September 30, 2020 and 2019, and $640.4 million and $965.9 million for the nine months ended September 30, 2020 and 2019. International includes revenue from the United Kingdom of $42.9 million and $69.4 million for the three months ended September 30, 2020 and 2019, and $151.1 million and $221.8 million for the nine months ended September 30, 2020 and 2019. There were no other individual countries that represented more than 10% of consolidated total revenue for the three and nine months ended September 30, 2020 and 2019. Revenue is attributed to individual countries based on the location of the customer.

Schedule of Gross Profit by Reportable Segment

The following table summarizes gross profit by reportable segment and category for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
North America
Service gross profit:
Local	$	87,507	$	155,032	$	283,004	$	473,787
Goods	7,440		2,280		14,851		7,838
Travel	3,874		10,717		9,726		38,791
Total service gross profit	98,821		168,029		307,581		520,416
Product gross profit - Goods	10,896		24,046		47,599		80,045
Total North America gross profit	109,717		192,075		355,180		600,461
International
Service gross profit:
Local	33,687		61,183		93,054		195,941
Goods	2,849		2,589		7,422		6,241
Travel	2,711		7,332		6,259		22,743
Total service gross profit	39,247		71,104		106,735		224,925
Product gross profit - Goods	11,058		14,761		36,580		50,702
Total International gross profit	$	50,305	$	85,865	$	143,315	$	275,627

Schedule of Operating Income by Reportable Segment

The following table summarizes contribution profit by reportable segment for the three and nine months ended September 30, 2020 and 2019 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
North America
Gross profit	$	109,717	$	192,075	$	355,180	$	600,461
Marketing	19,718		45,223		73,203		162,132
Contribution profit	89,999		146,852		281,977		438,329
International
Gross profit	50,305		85,865		143,315		275,627
Marketing	11,668		29,753		43,555		95,164
Contribution profit	38,637		56,112		99,760		180,463
Consolidated
Gross profit	160,022		277,940		498,495		876,088
Marketing	31,386		74,976		116,758		257,296
Contribution profit	128,636		202,964		381,737		618,792
Selling, general and administrative	124,257		198,388		475,017		619,274
Goodwill impairment	—		—		109,486		—
Long-lived asset impairment	—		—		22,351		—
Restructuring and related charges	20,559		(61)		61,037		(175)
Income (loss) from operations	$	(16,180)	$	4,637	$	(286,154)	$	(307)

Schedule of Total Assets by Segment

The following table summarizes total assets by reportable segment as of September 30, 2020 and December 31, 2019 (in thousands):

	September 30, 2020		December 31, 2019
Total assets:
North America (1)	$	1,071,325	$	1,045,500
International (1)	278,493		541,243
Consolidated total assets	$	1,349,818	$	1,586,743

(1)North America contains assets from the United States of $1,047.9 million and $1,020.0 million as of September 30, 2020 and December 31, 2019. International contains assets from Switzerland of $128.5 million and $175.2 million as of September 30, 2020 and December 31, 2019. There were no other individual countries that represented more than 10% of consolidated total assets as of September 30, 2020 and December 31, 2019.

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details) $ in Thousands		3 Months Ended		9 Months Ended		15 Months Ended	21 Months Ended
	Jun. 10, 2020	Sep. 30, 2020 USD ($) segment	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) segment	Sep. 30, 2019 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments | segment		2		2
Stock split ratio, common stock	0.05
Restructuring Cost and Reserve [Line Items]
Restructuring and related charges		$ 20,559	$ (61)	$ 61,037	$ (175)
Forecast
Restructuring Cost and Reserve [Line Items]
Restructuring and related charges							$ 105,000
Forecast | Minimum
Restructuring Cost and Reserve [Line Items]
Restructuring and related charges						$ 75,000
Forecast | Maximum
Restructuring Cost and Reserve [Line Items]
Restructuring and related charges						$ 105,000

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GOODWILL AND LONG-LIVED ASSETS - Narrative (Details)	3 Months Ended				9 Months Ended
	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) segment	Sep. 30, 2019 USD ($)
Finite-Lived Intangible Assets [Line Items]
Number of reporting units | segment					3
Goodwill impairment	$ 0			$ 0	$ 109,486,000	$ 0
Long-lived asset impairment	0				22,351,000
Intangible asset amortization expense	2,500,000			$ 3,700,000	7,400,000	$ 11,400,000
International
Finite-Lived Intangible Assets [Line Items]
Goodwill impairment	0	$ 0	$ 109,500,000		109,486,000
Long-lived asset impairment	2,500,000	400,000
North America
Finite-Lived Intangible Assets [Line Items]
Goodwill impairment	0	0	0		$ 0
Long-lived asset impairment	$ 800,000	$ 13,500,000
Asia Pacific
Finite-Lived Intangible Assets [Line Items]
Goodwill impairment			0
EMEA
Finite-Lived Intangible Assets [Line Items]
Long-lived asset impairment			$ 22,400,000
Minimum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, useful life					1 year
Maximum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, useful life					10 years

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GOODWILL AND LONG-LIVED ASSETS - Schedule of Goodwill (Details) - USD ($)	3 Months Ended				9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Goodwill [Roll Forward]
Goodwill, beginning balance			$ 325,017,000		$ 325,017,000
Impairment loss	$ 0			$ 0	(109,486,000)	$ 0
Foreign currency translation					(2,522,000)
Goodwill, ending balance	213,009,000				213,009,000
North America
Goodwill [Roll Forward]
Goodwill, beginning balance			178,685,000		178,685,000
Impairment loss	0	$ 0	0		0
Foreign currency translation					0
Goodwill, ending balance	178,685,000				178,685,000
International
Goodwill [Roll Forward]
Goodwill, beginning balance			146,332,000		146,332,000
Impairment loss	0	$ 0	$ (109,500,000)		(109,486,000)
Foreign currency translation					(2,522,000)
Goodwill, ending balance	$ 34,324,000				$ 34,324,000

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GOODWILL AND LONG-LIVED ASSETS - Schedule of Impairment on Statement of Operations (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Long-lived asset impairment	$ 0	$ 22,351
Restructuring and related charges	3,296	17,199
Total impairment	$ 3,296	$ 39,550

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GOODWILL AND LONG-LIVED ASSETS - Long-Lived Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Schedule of Impaired Long-Lived Assets [Line Items]
Impairment of long-lived assets	$ 0	$ 0	$ 22,351	$ 0
Furniture and fixtures
Schedule of Impaired Long-Lived Assets [Line Items]
Impairment of long-lived assets			413
Leasehold improvements
Schedule of Impaired Long-Lived Assets [Line Items]
Impairment of long-lived assets			7,749
Leasehold improvements | Other Restructuring
Schedule of Impaired Long-Lived Assets [Line Items]
Impairment of long-lived assets			5,000
Office equipment
Schedule of Impaired Long-Lived Assets [Line Items]
Impairment of long-lived assets			198
Purchased software
Schedule of Impaired Long-Lived Assets [Line Items]
Impairment of long-lived assets			14
Computer hardware
Schedule of Impaired Long-Lived Assets [Line Items]
Impairment of long-lived assets			2,842
Right-of-use assets - finance leases, net
Schedule of Impaired Long-Lived Assets [Line Items]
Impairment of long-lived assets			1,388
Capitalized software
Schedule of Impaired Long-Lived Assets [Line Items]
Impairment of long-lived assets			304
Internally-developed software
Schedule of Impaired Long-Lived Assets [Line Items]
Impairment of long-lived assets			2,988
Total Property, equipment and software, net
Schedule of Impaired Long-Lived Assets [Line Items]
Impairment of long-lived assets			15,896
Right-of-use assets - operating leases, net
Schedule of Impaired Long-Lived Assets [Line Items]
Impairment of long-lived assets			22,680
Right-of-use assets - operating leases, net | Other Restructuring
Schedule of Impaired Long-Lived Assets [Line Items]
Impairment of long-lived assets			12,200
Intangible assets, net
Schedule of Impaired Long-Lived Assets [Line Items]
Impairment of long-lived assets			103
Other non-current assets
Schedule of Impaired Long-Lived Assets [Line Items]
Impairment of long-lived assets			871
Long-lived assets
Schedule of Impaired Long-Lived Assets [Line Items]
Impairment of long-lived assets			$ 39,550

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GOODWILL AND LONG-LIVED ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 102,223	$ 100,738
Accumulated Amortization	71,258	65,446
Net Carrying Value	30,965	35,292
Customer relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	16,200	16,200
Accumulated Amortization	16,200	16,200
Net Carrying Value	0	0
Merchant relationships
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	21,668	22,193
Accumulated Amortization	10,557	8,268
Net Carrying Value	11,111	13,925
Trade names
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	9,491	9,558
Accumulated Amortization	7,771	7,369
Net Carrying Value	1,720	2,189
Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	2,319	3,651
Accumulated Amortization	1,906	2,685
Net Carrying Value	413	966
Patents
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	25,809	23,021
Accumulated Amortization	19,850	18,167
Net Carrying Value	5,959	4,854
Other intangible assets
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	26,736	26,115
Accumulated Amortization	14,974	12,757
Net Carrying Value	$ 11,762	$ 13,358

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GOODWILL AND LONG-LIVED ASSETS - Schedule of Estimated Future Amortization Expense (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Remaining amounts in 2020	$ 2,312
2021	8,173
2022	7,577
2023	6,426
2024	2,840
Thereafter	3,637
Total	$ 30,965

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INVESTMENTS - Summary of Investments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Schedule of Equity Method Investments [Line Items]
Investments	$ 35,911		$ 35,911		$ 76,576
Gain (loss) from changes in fair value	0	$ 14	(1,405)	$ (68,971)
Redeemable Preferred Stock
Schedule of Equity Method Investments [Line Items]
Available-for-sale securities	0		0		0
Fair Value Option Investments
Schedule of Equity Method Investments [Line Items]
Equity method investments	0		0		1,405
Other Equity Investments
Schedule of Equity Method Investments [Line Items]
Equity method investments	$ 35,911		$ 35,911		$ 75,171
Minimum
Schedule of Equity Method Investments [Line Items]
Available for sale securities, percent ownership of voting stock	19.00%		19.00%		19.00%
Minimum | Fair Value Option Investments
Schedule of Equity Method Investments [Line Items]
Equity method investment, percent ownership of voting stock	10.00%		10.00%		10.00%
Minimum | Other Equity Investments
Schedule of Equity Method Investments [Line Items]
Equity method investment, percent ownership of voting stock	1.00%		1.00%		1.00%
Maximum
Schedule of Equity Method Investments [Line Items]
Available for sale securities, percent ownership of voting stock	25.00%		25.00%		25.00%
Maximum | Fair Value Option Investments
Schedule of Equity Method Investments [Line Items]
Equity method investment, percent ownership of voting stock	19.00%		19.00%		19.00%
Maximum | Other Equity Investments
Schedule of Equity Method Investments [Line Items]
Equity method investment, percent ownership of voting stock	19.00%		19.00%		19.00%

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INVESTMENTS - Narrative (Details) - USD ($) $ in Thousands					3 Months Ended					9 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Schedule of Equity Method Investments [Line Items]
Gain (loss) from changes in fair value					$ 0		$ 14			$ (1,405)	$ (68,971)
Other than temporary impairments on equity method investments										6,700
Nearbuy
Schedule of Equity Method Investments [Line Items]
Gain (loss) from changes in fair value						$ (1,400)				(1,405)	437
Discount rate	30.00%	20.00%
Equity method investments		$ 1,400			0					0
Monster LP
Schedule of Equity Method Investments [Line Items]
Gain (loss) from changes in fair value								$ (27,900)	$ (41,500)	0	$ (69,408)
Discount rate			26.00%	21.00%
Equity method investments		0			0					0
Other Equity Investments
Schedule of Equity Method Investments [Line Items]
Equity method investments		$ 75,171			$ 35,911					$ 35,911
Percentage of other equity investment shares sold in transaction						50.00%
Proceeds from sale of other equity investment						$ 34,000
Other than temporary impairments on equity method investments						$ 6,700

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SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Other Income (Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Interest income	$ 1,268	$ 1,959	$ 5,254	$ 5,810
Interest expense	(9,408)	(6,029)	(24,375)	(17,162)
Changes in fair value of investments	0	14	(1,405)	(68,971)
Foreign currency gains (losses), net	7,273	(13,197)	5,661	(12,279)
Impairment of investment	0	0	(6,684)	0
Other income (expense), net	$ (867)	$ (17,253)	$ (21,549)	$ (92,602)

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SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Merchandise inventories	$ 4,944	$ 25,426
Prepaid expenses	16,069	27,077
Income taxes receivable	13,585	4,791
Other	17,360	24,779
Total prepaid expenses and other current assets	$ 51,958	$ 82,073

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SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Other Non-Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Deferred income tax	$ 4,932	$ 4,829
Debt issue costs, net	2,342	2,156
Deferred commissions expense	4,856	10,133
Deferred cloud implementation costs	10,175	7,372
Other	3,756	4,115
Total other non-current assets	$ 26,061	$ 28,605

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SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Accrued Merchant and Supplier Payables (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Accrued merchant payables	$ 297,018	$ 366,573
Accrued supplier payables	84,838	174,367
Total accrued merchant and supplier payables	$ 381,856	$ 540,940

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SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Accrued Expense and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Refund reserve	$ 29,566	$ 22,002
Compensation and benefits	37,711	49,009
Accrued marketing	10,256	41,110
Restructuring-related liabilities	19,753	0
Customer credits	50,830	13,764
Income taxes payable	1,221	5,044
Deferred revenue	10,635	17,951
Operating and finance lease obligations	38,055	40,768
Deferred cloud computing contract incentive	3,000	0
Other	56,271	70,544
Total accrued expenses and other current liabilities	$ 257,298	$ 260,192

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SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION - Schedule of Other Non-current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Supplemental Consolidated Balance Sheet & Statement of Operations Information [Abstract]
Contingent income tax liabilities	$ 28,725	$ 30,121
Finance lease obligations	1,126	5,831
Restructuring-related liabilities	714	0
Deferred income taxes	3,832	3,903
Deferred payroll taxes (1)	5,024	0
Deferred cloud computing contract incentive	5,000	0
Other	5,675	5,132
Total other non-current liabilities	$ 50,096	$ 44,987

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FINANCING ARRANGEMENTS - Convertible Senior Notes (Details) - USD ($)	Apr. 04, 2016	Sep. 30, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Net proceeds	$ 243,200,000
Stated interest rate	3.25%
Principal amount converted initially	$ 1,000
Number of shares converted (in shares)	9.25926
Closing price of stock, trigger price (in usd per share)	150.00%
Number of threshold trading days	20
Consecutive trading days	30
Effective interest rate		9.75%
Debt related commitment fees and issuance costs	$ 6,800,000
Debt issuance costs	4,800,000	$ 24,307,000	$ 35,131,000
Equity component of convertible debt	$ 2,000,000.0
Estimated fair value of convertible notes		$ 251,800,000	$ 262,700,000
Senior Notes
Debt Instrument [Line Items]
Conversion price (in usd per share)	$ 108.00
Share price (in usd per share)		$ 20.40
Senior Notes | 2019 Credit Agreement
Debt Instrument [Line Items]
Aggregate principal amount of convertible senior notes	$ 250,000,000.0

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FINANCING ARRANGEMENTS - Schedule of Notes (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019	Apr. 04, 2016
Debt Instrument [Line Items]
Principal amount	$ 250,000	$ 250,000
Less: debt discount	(24,307)	(35,131)	$ (4,800)
Net carrying amount of liability component	225,693	214,869
Additional Paid-in Capital
Debt Instrument [Line Items]
Net carrying amount of equity component	$ 67,014	$ 67,014

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FINANCING ARRANGEMENTS - Schedule of Convertible Debt Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Apr. 04, 2016
Debt Disclosure [Abstract]
Stated interest rate					3.25%
Contractual interest (3.25% of the principal amount per annum)	$ 2,032	$ 2,032	$ 6,096	$ 6,096
Amortization of debt discount	3,701	3,341	10,824	9,772
Total	$ 5,733	$ 5,373	$ 16,920	$ 15,868

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FINANCING ARRANGEMENTS - Note Hedges and Warrants (Details) $ / shares in Units, shares in Millions, $ in Millions	1 Months Ended
	May 31, 2016 USD ($) $ / shares shares
Debt Disclosure [Abstract]
Cost of convertible note hedges | $	$ 59.1
Number of shares available to be purchased (in shares) | shares	2.3
Strike price (in usd per share) | $ / shares	$ 108.00
Cash proceeds from issuance of warrants | $	$ 35.5
Exercise price (in usd per share) | $ / shares	$ 170.00

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FINANCING ARRANGEMENTS - Revolving Credit Facility (Details) - USD ($)	Jul. 17, 2020	Sep. 30, 2020	Dec. 31, 2019	May 30, 2019
2019 Credit Agreement
Debt Instrument [Line Items]
Aggregate principal amount				$ 400,000,000.0
Outstanding amount of lines of credit		$ 20,600,000	$ 18,100,000
Debt issuance costs		3,200,000
Amount of borrowings		200,000,000.0
2020 Amended Credit Agreement
Debt Instrument [Line Items]
Aggregate principal amount	$ 225,000,000.0
Unused commitment fee percentage	0.40%
Minimum liquidity required under debt agreement	$ 250,000,000.0
Minimum liquidity as a percentage of accrued merchant and supplier payables required under debt agreement	70.00%
Monthly liquidity required as a percentage of accrued merchant and supplier payables required under debt agreement	100.00%
Monthly liquidity required in addition to minimum	$ 50,000,000.0
Maximum funding commitment	$ 225,000,000.0
Minimum | 2020 Amended Credit Agreement
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
Commitment fee percentage, daily amount of unused commitments	0.25%
Maximum | 2020 Amended Credit Agreement
Debt Instrument [Line Items]
Commitment fee percentage, daily amount of unused commitments	0.35%
Canadian Prime Rate | 2020 Amended Credit Agreement
Debt Instrument [Line Items]
Basis spread on variable rate	1.50%
Fixed Rate | 2020 Amended Credit Agreement
Debt Instrument [Line Items]
Basis spread on variable rate	2.50%
LIBOR | Maximum | 2020 Amended Credit Agreement
Debt Instrument [Line Items]
Basis spread on variable rate	2.00%
Letter of Credit | 2019 Credit Agreement
Debt Instrument [Line Items]
Aggregate principal amount		$ 75,000,000.0
Geographic Distribution, Domestic | 2019 Credit Agreement
Debt Instrument [Line Items]
Outstanding stock percentage		100.00%
Geographic Distribution, Foreign | 2019 Credit Agreement
Debt Instrument [Line Items]
Outstanding stock percentage		65.00%

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COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2020	Dec. 31, 2017
Recorded Unconditional Purchase Obligation [Line Items]
Gain on expiration of indemnity liability	$ 0.4
Indemnification liabilities	2.8
Maximum exposure of indemnification liability	$ 11.7
Groupon Latin America
Recorded Unconditional Purchase Obligation [Line Items]
Estimated indemnification liability		$ 5.4

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COMMITMENTS AND CONTINGENCIES - Schedule of Future Payments Under Contractual Obligations (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)
Recorded Unconditional Purchase Obligation [Line Items]
2020	$ 5,810
2021	17,672
2022	17,118
2023	22,753
Total	$ 63,353
Contract term	3 years
Cloud Computing Arrangement Costs
Recorded Unconditional Purchase Obligation [Line Items]
2023	$ 8,000

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS - Narrative (Details)	Jun. 10, 2020	Sep. 30, 2020 USD ($) shares	Sep. 30, 2019 USD ($)
Share-based Payment Arrangement [Abstract]
Stock split ratio, common stock	0.05
Number of shares available for issuance (in shares) | shares		100,500,000
Authorized repurchase amount | $			$ 300,000,000.0
Value of common stock remaining available for repurchase | $		$ 245,000,000.0
Number of shares available for future issuance (in shares) | shares		2,899,062

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 8,690	$ 19,543	$ 32,672	$ 62,517
Capitalized amount of stock-based compensation	1,100	2,000	3,400	5,500
Cost of revenue
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	156	405	496	1,163
Marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	377	1,671	1,218	4,586
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	7,846	17,467	29,223	56,768
Restructuring and related charges
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 311	$ 0	$ 1,735	$ 0

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS - ESPP (Details) - shares	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for issuance (in shares)	100,500,000
Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for issuance (in shares)	1,000,000
Shares issued under employee stock purchase plan (in shares)	69,371	74,300

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS - RSU (Details) - Restricted stock units - USD ($) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (in shares)	1,527,014
Granted (in shares)	1,744,782
Vested (in shares)	(596,183)
Forfeited (in shares)	(720,949)
Ending balance (in shares)	1,954,664
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Beginning balance (in dollars per share)	$ 74.80
Granted (in dollars per share)	24.59
Vested (in dollars per share)	74.86
Forfeited (in dollars per share)	65.70
Ending balance (in dollars per share)	$ 33.41
Unrecognized compensation costs	$ 49.7
Weighted-average period of recognition	1 year 1 month 2 days
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	4 years

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STOCKHOLDERS' EQUITY AND COMPENSATION ARRANGEMENTS - PSU (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Stock-based compensation expense	$ 8,690	$ 19,543	$ 32,672	$ 62,517
Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (in shares)			203,853
Granted (in shares)			96,598
Vested (in shares)			(104,441)
Forfeited (in shares)			(71,128)
Ending balance (in shares)	124,882		124,882
Maximum shares issuable (in shares)			173,181
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Beginning balance (in dollars per share)			$ 79.76
Granted (in dollars per share)			15.44
Vested (in dollars per share)			80.77
Forfeited (in dollars per share)			79.94
Ending balance (in dollars per share)	$ 29.78		$ 29.78
Unrecognized compensation costs	$ 1,500		$ 1,500
Weighted-average period of recognition			1 year 5 months 8 days
Market-based Performance Share Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share price (in dollars per share)	$ 120.00		$ 120.00
Volatility rate			49.80%
Cost of equity rate			12.80%
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (in shares)			341,002
Granted (in shares)			0
Vested (in shares)			0
Forfeited (in shares)			(91,668)
Ending balance (in shares)	249,334		249,334
Maximum shares issuable (in shares)			249,334
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Beginning balance (in dollars per share)			$ 60.60
Granted (in dollars per share)			0
Vested (in dollars per share)			0
Forfeited (in dollars per share)			60.60
Ending balance (in dollars per share)	$ 60.60		$ 60.60
Stock-based compensation expense			$ 0

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REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Revenue from Contract with Customer [Abstract]
Deferred revenue	$ 10.6		$ 10.6		$ 18.0
Revenue recognized previously recorded in deferred revenue			18.0
Amortization of deferred contract costs	3.6	$ 5.0	12.3	$ 15.5
Revenue constrained and to be recognized in future periods	$ 41.0		$ 41.0		$ 14.6

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REVENUE RECOGNITION - Customer Credits (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)
Customer Credits [Roll Forward]
Customer credits, beginning balance	$ 13,764
Credits issued	153,638
Credits redeemed	(102,373)
Breakage revenue recognized	(15,055)
Foreign currency translation	856
Customer credits, ending balance	$ 50,830

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REVENUE RECOGNITION - Deferred contract acquisition costs (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Minimum
Capitalized Contract Cost [Line Items]
Deferred contract acquisition cost recognition period	12 months
Maximum
Capitalized Contract Cost [Line Items]
Deferred contract acquisition cost recognition period	18 months
Prepaid expenses and other current assets
Capitalized Contract Cost [Line Items]
Deferred contract acquisition costs	$ 1,132	$ 2,501
Other non-current assets
Capitalized Contract Cost [Line Items]
Deferred contract acquisition costs	$ 4,856	$ 10,133

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REVENUE RECOGNITION - Allowance for Credit Losses (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Allowance for credit loss on accounts receivable, beginning balance	$ 3,693
Change in Provision	8,683
Write-offs	(2,330)
Foreign currency translation	187
Allowance for credit loss on accounts receivable, ending balance	$ 10,233

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RESTRUCTURING AND RELATED CHARGES - Narrative (Details) $ in Thousands	3 Months Ended		9 Months Ended			15 Months Ended	21 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2020 numberofemployees	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)
Restructuring Cost and Reserve [Line Items]
Restructuring and related charges	$ 20,559	$ (61)		$ 61,037	$ (175)
Restructuring charges related to impairment of right-of-use assets				$ 17,200
Forecast
Restructuring Cost and Reserve [Line Items]
Restructuring and related charges							$ 105,000
Reduction in number of positions (in employees) | numberofemployees			1,300
Minimum | Forecast
Restructuring Cost and Reserve [Line Items]
Restructuring and related charges						$ 75,000
Maximum | Forecast
Restructuring Cost and Reserve [Line Items]
Restructuring and related charges						$ 105,000

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RESTRUCTURING AND RELATED CHARGES - Schedule of Restructuring Costs by Segment (Details) $ in Thousands	3 Months Ended		9 Months Ended		21 Months Ended
	Sep. 30, 2020 USD ($) numberofemployees	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) numberofemployees	Sep. 30, 2019 USD ($)	Dec. 31, 2021 USD ($)
Restructuring Cost and Reserve [Line Items]
Employee benefit and severance costs	$ 15,889		$ 40,589
Legal and advisory costs	453		1,202
Property, equipment and software impairments	265		5,017
Right-of-use asset impairments and lease-related charges (credits)	3,952		14,229
Total restructuring charges (credits)	$ 20,559	$ (61)	$ 61,037	$ (175)
Number of positions eliminated | numberofemployees	500		1,200
Forecast
Restructuring Cost and Reserve [Line Items]
Total restructuring charges (credits)					$ 105,000
North America
Restructuring Cost and Reserve [Line Items]
Employee benefit and severance costs	$ 1,489		$ 17,548
Legal and advisory costs	435		443
Property, equipment and software impairments	70		4,790
Right-of-use asset impairments and lease-related charges (credits)	736		10,047
Total restructuring charges (credits)	2,730		32,828
International
Restructuring Cost and Reserve [Line Items]
Employee benefit and severance costs	14,400		23,041
Legal and advisory costs	18		759
Property, equipment and software impairments	195		227
Right-of-use asset impairments and lease-related charges (credits)	3,216		4,182
Total restructuring charges (credits)	$ 17,829		$ 28,209

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RESTRUCTURING AND RELATED CHARGES - Schedule of Restructuring Liability Activity (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	$ 699
Charges payable in cash	40,056
Cash payments	(21,072)
Foreign currency translation	784
Restructuring reserve, ending balance	20,467
Stock-based compensation expense related to accelerated vesting of awards	30,937	$ 62,517
Employee Severance and Benefit Costs
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	699
Charges payable in cash	38,854
Cash payments	(20,319)
Foreign currency translation	722
Restructuring reserve, ending balance	19,956
Stock-based compensation expense related to accelerated vesting of awards	1,700
Legal And Advisory Costs
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning balance	0
Charges payable in cash	1,202
Cash payments	(753)
Foreign currency translation	62
Restructuring reserve, ending balance	$ 511

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Taxes [Line Items]
Provision (benefit) for income taxes	$ (486)	$ 2,069	$ (7,170)	$ 591
Income (loss) from continuing operations before provision (benefit) for income taxes	(17,047)	$ (12,616)	(307,703)	$ (92,909)
International
Income Taxes [Line Items]
Proposed assessment for claims			119,100
Decrease in unrecognized tax benefits reasonably possible	$ 5,800		$ 5,800

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FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($)	3 Months Ended				9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018	Apr. 30, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration										$ 2,500,000
Impairment loss	$ 0			$ 0	$ (109,486,000)	$ 0
Non-cash impairment charges related to long-lived assets	3,296,000				39,550,000
Restructuring charges related to impairment of right-of-use assets					17,200,000
Other than temporary impairments on equity method investments					6,700,000
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of contingent consideration	291,000	$ 278,000		$ 1,207,000	291,000	$ 1,207,000	$ 1,298,000	$ 1,239,000	$ 1,529,000
Fair Value, Measurements, Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value option investments	0.0				0.0		1,400,000
Fair value of contingent consideration	300,000				300,000		$ 1,300,000
International
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment loss	$ 0	$ 0	$ (109,500,000)		$ (109,486,000)

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FAIR VALUE MEASUREMENTS - Fair Value, Assets and Liabilities, Reconciliation of Level 3 Inputs (Details) - Level 3 - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Contingent Consideration [Roll Forward]
Contingent consideration, beginning balance	$ 278	$ 1,239	$ 1,298	$ 1,529
Settlements of contingent consideration liabilities	0	0	(908)	(312)
Total losses (gains) included in earnings	0	6	6	33
Foreign currency translation	13	(38)	(105)	(43)
Contingent consideration, ending balance	291	1,207	291	1,207
Unrealized gains (losses) still held	0	6	6	33
Fair Value Option Investments
Equity Method Investments [Roll Forward]
Fair value option investments, beginning balance	0	4,917	1,405	73,902
Total gains (losses) included in earnings	0	14	(1,405)	(68,971)
Fair value option investments, ending balance	0	4,931	0	4,931
Unrealized gains (losses) still held	0	14	(1,405)	(68,971)
Redeemable Preferred Stock
Equity Method Investments [Roll Forward]
Unrealized gains (losses) still held	0	(63)	0	(202)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value [Roll Forward]
Available-for-sale securities, redeemable preferred shares, beginning balance	0	10,201	0	10,340
Total gains (losses) included in other comprehensive income (loss)	0	(63)	0	(202)
Available-for-sale securities, redeemable preferred shares, ending balance	$ 0	$ 10,138	$ 0	$ 10,138

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INCOME (LOSS) PER SHARE - Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Earnings Per Share [Abstract]
Net income (loss) - continuing operations		$ (16,561)	$ (14,685)	$ (300,533)	$ (93,500)
Less: Net income (loss) attributable to noncontrolling interests		(291)	2,000	1,758	8,080
Net income (loss) attributable to common stockholders - continuing operations		(16,270)	(16,685)	(302,291)	(101,580)
Income (loss) from discontinued operations, net of tax		0	0	382	2,162
Net income (loss) attributable to common stockholders		$ (16,270)	$ (16,685)	$ (301,909)	$ (99,418)
Weighted-average common shares outstanding (in shares)		28,751,520	28,348,561	28,535,393	28,416,966
Basic and diluted net income (loss) per share:
Continuing operations (in usd per share)	[1]	$ (0.57)	$ (0.59)	$ (10.59)	$ (3.57)
Discontinued operations (in usd per share)	[1]	0	0	0.01	0.08
Basic and diluted net income (loss) per share (in usd per share)	[1]	$ (0.57)	$ (0.59)	$ (10.58)	$ (3.49)

[1] All share and per share information has been retroactively adjusted to reflect a reverse stock split. See Note 7, Stockholders' Equity and Compensation Arrangements for additional information.

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INCOME (LOSS) PER SHARE - Schedule of Weighted-Average Potentially Dilutive Instruments (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	6,688,136	6,476,593	6,709,231	6,368,621
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	1,907,396	1,768,908	1,879,752	1,657,446
Performance share units and other stock-based compensation awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	151,110	78,055	199,849	81,545
Convertible senior notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	2,314,815	2,314,815	2,314,815	2,314,815
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	2,314,815	2,314,815	2,314,815	2,314,815
Market-based Performance Share Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares issuable upon vesting of outstanding performance share units (in shares)			268,654

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SEGMENT INFORMATION - Schedule of Revenue by Segment (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($) segment	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) segment	Sep. 30, 2019 USD ($)
Schedule of Revenue by Segment [Line Items]
Number of operating segments | segment	2		2
Total revenue	$ 304,019	$ 495,612	$ 1,073,815	$ 1,606,599
North America
Schedule of Revenue by Segment [Line Items]
Total revenue	180,311	303,596	648,797	985,421
International
Schedule of Revenue by Segment [Line Items]
Total revenue	123,708	192,016	425,018	621,178
UNITED STATES
Schedule of Revenue by Segment [Line Items]
Total revenue	177,300	297,900	640,400	965,900
UNITED KINGDOM
Schedule of Revenue by Segment [Line Items]
Total revenue	42,900	69,400	151,100	221,800
Product
Schedule of Revenue by Segment [Line Items]
Total revenue	148,946	227,532	599,337	775,089
Product | Goods | North America
Schedule of Revenue by Segment [Line Items]
Total revenue	68,215	111,776	293,729	394,235
Product | Goods | International
Schedule of Revenue by Segment [Line Items]
Total revenue	80,731	115,756	305,608	380,854
Service
Schedule of Revenue by Segment [Line Items]
Total revenue	155,073	268,080	474,478	831,510
Service | North America
Schedule of Revenue by Segment [Line Items]
Total revenue	112,096	191,820	355,068	591,186
Service | International
Schedule of Revenue by Segment [Line Items]
Total revenue	42,977	76,260	119,410	240,324
Service | Local | North America
Schedule of Revenue by Segment [Line Items]
Total revenue	98,561	175,140	322,945	532,599
Service | Local | International
Schedule of Revenue by Segment [Line Items]
Total revenue	36,528	65,440	103,221	208,625
Service | Goods | North America
Schedule of Revenue by Segment [Line Items]
Total revenue	8,787	3,000	18,401	9,841
Service | Goods | International
Schedule of Revenue by Segment [Line Items]
Total revenue	3,309	2,817	8,821	6,882
Service | Travel | North America
Schedule of Revenue by Segment [Line Items]
Total revenue	4,748	13,680	13,722	48,746
Service | Travel | International
Schedule of Revenue by Segment [Line Items]
Total revenue	$ 3,140	$ 8,003	$ 7,368	$ 24,817

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SEGMENT INFORMATION - Schedule of Gross Profit by Segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Segment Reporting Information [Line Items]
Gross profit	$ 160,022	$ 277,940	$ 498,495	$ 876,088
North America
Segment Reporting Information [Line Items]
Gross profit	109,717	192,075	355,180	600,461
International
Segment Reporting Information [Line Items]
Gross profit	50,305	85,865	143,315	275,627
Service | North America
Segment Reporting Information [Line Items]
Gross profit	98,821	168,029	307,581	520,416
Service | International
Segment Reporting Information [Line Items]
Gross profit	39,247	71,104	106,735	224,925
Service | Local | North America
Segment Reporting Information [Line Items]
Gross profit	87,507	155,032	283,004	473,787
Service | Local | International
Segment Reporting Information [Line Items]
Gross profit	33,687	61,183	93,054	195,941
Service | Goods | North America
Segment Reporting Information [Line Items]
Gross profit	7,440	2,280	14,851	7,838
Service | Goods | International
Segment Reporting Information [Line Items]
Gross profit	2,849	2,589	7,422	6,241
Service | Travel | North America
Segment Reporting Information [Line Items]
Gross profit	3,874	10,717	9,726	38,791
Service | Travel | International
Segment Reporting Information [Line Items]
Gross profit	2,711	7,332	6,259	22,743
Product | Goods | North America
Segment Reporting Information [Line Items]
Gross profit	10,896	24,046	47,599	80,045
Product | Goods | International
Segment Reporting Information [Line Items]
Gross profit	$ 11,058	$ 14,761	$ 36,580	$ 50,702

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SEGMENT INFORMATION - Schedule of Contribution Profit by Segment (Details) - USD ($)	3 Months Ended				9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Schedule of Operating Income (Loss) by Segment
Gross profit	$ 160,022,000			$ 277,940,000	$ 498,495,000	$ 876,088,000
Marketing	31,386,000			74,976,000	116,758,000	257,296,000
Contribution profit	128,636,000			202,964,000	381,737,000	618,792,000
Selling, general and administrative	124,257,000			198,388,000	475,017,000	619,274,000
Goodwill impairment	0			0	109,486,000	0
Long-lived asset impairment	0			0	22,351,000	0
Restructuring and related charges	20,559,000			(61,000)	61,037,000	(175,000)
Income (loss) from operations	(16,180,000)			4,637,000	(286,154,000)	(307,000)
North America
Schedule of Operating Income (Loss) by Segment
Gross profit	109,717,000			192,075,000	355,180,000	600,461,000
Marketing	19,718,000			45,223,000	73,203,000	162,132,000
Contribution profit	89,999,000			146,852,000	281,977,000	438,329,000
Goodwill impairment	0	$ 0	$ 0		0
Restructuring and related charges	2,730,000				32,828,000
International
Schedule of Operating Income (Loss) by Segment
Gross profit	50,305,000			85,865,000	143,315,000	275,627,000
Marketing	11,668,000			29,753,000	43,555,000	95,164,000
Contribution profit	38,637,000			$ 56,112,000	99,760,000	$ 180,463,000
Goodwill impairment	0	$ 0	$ 109,500,000		109,486,000
Restructuring and related charges	$ 17,829,000				$ 28,209,000

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SEGMENT INFORMATION - Schedule of Total Assets by Segment (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	$ 1,349,818	$ 1,586,743
North America
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	1,071,325	1,045,500
International
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	278,493	541,243
UNITED STATES
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	1,047,900	1,020,000
SWITZERLAND
Segment Reporting, Asset Reconciling Item [Line Items]
Assets	$ 128,500	$ 175,200

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Label	Element	Value
Restricted Cash, Current	us-gaap_RestrictedCashCurrent	$ 3,320,000
Restricted Cash, Current	us-gaap_RestrictedCashCurrent	315,000
Restricted Cash, Current	us-gaap_RestrictedCashCurrent	1,101,000
Restricted Cash, Current	us-gaap_RestrictedCashCurrent	1,534,000
Restricted Cash, Noncurrent	us-gaap_RestrictedCashNoncurrent	387,000
Restricted Cash, Noncurrent	us-gaap_RestrictedCashNoncurrent	239,000
Restricted Cash, Noncurrent	us-gaap_RestrictedCashNoncurrent	236,000
Restricted Cash, Noncurrent	us-gaap_RestrictedCashNoncurrent	$ 227,000