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Groupon Earnings Released, Revenue Up 27%

Groupon just released its earnings for the third quarter with revenue up 27% year-over-year at $757.1 million, GAAP loss per share of $0.03, and non-GAAP earnings per share of $0.03. The company beat ...
Groupon Earnings Released, Revenue Up 27%
Written by Chris Crum
  • Groupon just released its earnings for the third quarter with revenue up 27% year-over-year at $757.1 million, GAAP loss per share of $0.03, and non-GAAP earnings per share of $0.03.

    The company beat Wall Street expectations.

    “We had another record quarter, with worldwide billings increasing 39 percent and reaching their highest level ever,” said CEO Eric Lefkofsky. “We also made significant progress in our strategy to become the leading mobile commerce destination, with double-digit growth in our North American Local business, double-digit gross margins in North American Goods and positive Adjusted EBITDA in every segment for the first time in over a year.”

    Gross billings totaled $1.86 billion for the quarter. At the end of the quarter, active deals were 300,000 globally, compared to 240,000 at the end of the second quarter. Active customers grew 24% year-over-year.

    Here’s the release in its entirety:

    CHICAGO–(BUSINESS WIRE)– Groupon, Inc. (NASDAQ: GRPN) today announced financial results for the quarter ended September 30, 2014.

    “We had another record quarter, with worldwide billings increasing 39 percent and reaching their highest level ever,” said Eric Lefkofsky, CEO of Groupon. “We also made significant progress in our strategy to become the leading mobile commerce destination, with double-digit growth in our North American Local business, double-digit gross margins in North American Goods and positive Adjusted EBITDA in every segment for the first time in over a year.”

    Third Quarter 2014 Summary

    • Gross billings, which reflect the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds, increased 39% globally to $1.86 billion in the third quarter 2014, compared with $1.34 billion in the third quarter 2013. North America billings increased 16%, EMEA increased 10% and Rest of World increased 155%, driven by the first-quarter acquisition of Ticket Monster.
    • Revenue increased 27%, to $757.1 million in the third quarter 2014, compared with $595.1 million in the third quarter 2013.North America revenue increased 16%, EMEA increased 56% and Rest of World increased 26%.
    • Gross profit was $380.1 million in the third quarter 2014, compared with $359.6 million in the third quarter 2013.
    • Adjusted EBITDA, a non-GAAP financial measure, was $67.0 million in the third quarter 2014, compared with $62.3 million in the third quarter 2013, reflecting SG&A expense related to the Ticket Monster and ideel acquisitions, as well as an increase in overall marketing expense.
    • Third quarter 2014 net loss attributable to common stockholders was $21.2 million, or $0.03 per share. Earnings per share excluding stock compensation, amortization of acquired intangible assets, and acquisition-related costs of $46.1 million (or$38.7 million net of tax), a non-GAAP financial measure, was $0.03 per share.
    • Third quarter results included $18.6 million of pre-tax non-operating foreign currency losses and a $7.7 million decrease in liabilities for uncertain tax positions.
    • Operating cash flow for the trailing twelve months ended September 30, 2014 was $180.3 million. Free cash flow, a non-GAAP financial measure, was $25.4 million in the third quarter 2014, bringing free cash flow for the trailing twelve months endedSeptember 30, 2014 to $92.9 million.
    • At the end of the quarter, Groupon had $855.2 million in cash and cash equivalents.

    Definitions and reconciliations of all non-GAAP financial measures are included below in the section titled ”Non-GAAP Financial Measures” and in the accompanying tables.

    Highlights

    • Units: Global units, defined as vouchers and products sold before cancellations and refunds, increased 92% year-over-year to 88 million in the third quarter 2014. North America units increased 11%, EMEA units increased 30% and Rest of World units increased 316%.
    • Active deals: At the end of the third quarter 2014, on average, active deals were approximately 300,000 globally, compared with more than 240,000 at the end of the second quarter 2014. North American active deals increased to over 120,000.
    • Active customers: Active customers, or customers that have purchased a voucher or product within the last twelve months, grew 24% year-over-year, to 52.7 million as of September 30, 2014, comprising 23.5 million in North America, 14.9 million in EMEA, and 14.3 million in Rest of World.
    • Customer spend: Third quarter 2014 trailing twelve month billings per average active customer was $149, compared with$141 in the second quarter 2014.
    • Mobile: Mobile mix, as measured by transactions completed on mobile devices, remains over half of the business. Over 100 million people have now downloaded Groupon mobile apps worldwide.
    • Marketplace: The rollout of Groupon’s marketplace (“Pull”) continued to gain traction. In the third quarter 2014, approximately 10% of total traffic in North America searched, with customers who searched spending significantly more than those who did not.
    • Rest of World: Rest of World billings grew 155% in the third quarter 2014, driven by Ticket Monster. As a result of the significant growth opportunities that exist for Ticket Monster, as well as for the Asian business more broadly, the company has hired financial advisers to evaluate a range of financing and strategic alternatives for those businesses that would, if pursued, unlock shareholder value.

    Share Repurchase Program

    During the third quarter 2014, Groupon repurchased 1,349,712 shares of its Class A common stock at an average price of $6.16 per share, for an aggregate purchase price of $8.3 million. Under the existing authorization, Groupon has repurchased a total of 26,087,004 shares at an average price of $7.30 per share, for an aggregate purchase price of $190.4 million. Groupon is authorized to repurchase up to an additional $109.6 million of Class A common stock under the August 2013 share repurchase authorization. The program, which is intended to partially offset dilution from employee stock grants, terminates in August 2015.

    2014 Investor and Analyst Day

    Groupon will be hosting its first Investor and Analyst Day on Tuesday, November 11, 2014 in Chicago. A live webcast of the event will be available on the company’s investor relations website at http://investor.groupon.com.

    Outlook

    Significant movement in foreign exchange rates, the Euro in particular, has led to an approximately $7 million negative impact on Groupon’s Adjusted EBITDA estimate since the company last provided full year guidance.

    For the fourth quarter 2014, reflecting current foreign exchange rates, Groupon expects revenue of between $875 million and $925 million, Adjusted EBITDA of between $80 million and $100 million, and non-GAAP earnings per share excluding stock compensation, amortization of acquired intangible assets, and acquisition-related expenses, net of tax, of between $0.02 and $0.04.

    Conference Call

    A conference call will be webcast live today at 4:00 p.m. CT / 5:00 p.m. ET, and will be available on Groupon’s investor relations website at http://investor.groupon.com. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

    Groupon encourages investors to use its investor relations website as a way of easily finding information about the company.Groupon promptly makes available on this website, free of charge, the reports that the company files or furnishes with the SEC, corporate governance information (including Groupon’s Global Code of Conduct), and select press releases and social media postings.

    Non-GAAP Financial Measures

    In addition to financial results reported in accordance with U.S. generally accepted accounting principles (U.S. GAAP), we have provided the following non-GAAP financial measures in this release and the accompanying tables: foreign exchange rate neutral operating results, Adjusted EBITDA, free cash flow and earnings (loss) per share excluding stock-based compensation, amortization of acquired intangible assets, and acquisition-related expense (benefit), net. These non-GAAP financial measures are presented to aid investors in better understanding Groupon’s performance and to facilitate comparisons to many of our peers who present similar measures. However, these measures are not intended to be a substitute for those reported in accordance with U.S. GAAP. These measures may be different from non-GAAP financial measures used by other companies, even when similar terms are used to identify such measures. For reconciliations of these measures to the most applicable financial measures under U.S. GAAP, see ”Non-GAAP Reconciliation Schedules” and ”Supplemental Financial Information and Business Metrics” included in the tables accompanying this release.

    We exclude the following items from one or more of our non-GAAP financial measures:

    Stock-based compensation. We exclude stock-based compensation because it is primarily non-cash in nature and we believe that non-GAAP financial measures excluding this item provide meaningful supplemental information about our operating performance and liquidity.

    Acquisition-related expense (benefit), net. Acquisition-related expense (benefit), net is comprised of the change in the fair value of contingent consideration arrangements and, beginning in the fourth quarter of 2013, also includes external transaction costs related to business combinations, primarily consisting of legal and advisory fees. External transaction costs were not material for periods prior to the fourth quarter of 2013 presented in this release and the accompanying tables. The composition of our contingent consideration arrangements and the impact of those arrangements on our operating results vary over time based on a number of factors, including the terms of our business combinations and the timing of those transactions. We exclude acquisition-related expense (benefit), net because we believe that non-GAAP financial measures excluding this item provide meaningful supplemental information about our operating performance and facilitate comparisons to our historical operating results.

    Depreciation and amortization. We exclude depreciation and amortization expenses because they are non-cash in nature and we believe that non-GAAP financial measures excluding these items provide meaningful supplemental information about our operating performance and liquidity.

    Descriptions of the non-GAAP financial measures included in this release and the accompanying tables are as follows:

    Foreign exchange rate neutral operating results show our current period operating results as if foreign currency exchange rates had remained the same as those in effect in the comparable prior-year period.

    Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, and acquisition-related expense (benefit), net. Our definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key measure used by our management and Board of Directors to evaluate operating performance, generate future plans and make strategic decisions regarding the allocation of capital. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors.

    Earnings (loss) per share excluding stock-based compensation, amortization of acquired intangible assets, and acquisition-related expense (benefit), net is a non-GAAP financial measure that adjusts our earnings (loss) per share to exclude the impact of stock-based compensation expense, amortization of acquired intangible assets, and acquisition-related expense (benefit), net, and the income tax effect of those items. We believe that this non-GAAP financial measure provides useful supplemental information for evaluating our operating performance.

    We previously changed our non-GAAP earnings (loss) per share measure, effective beginning with the first quarter 2014, to exclude amortization of acquired intangible assets, net of tax, in addition to stock compensation and acquisition-related expenses, which we excluded historically. Due to our significant acquisition activity in January 2014 and potential acquisition activity in the future, we believe that excluding the impact of this item from our non-GAAP earnings (loss) per share measure enables more meaningful comparisons with our historical results.

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

    Note on Forward-Looking Statements

    The statements contained in this release that refer to plans and expectations for the next quarter, the full year or the future are forward-looking statements that involve a number of risks and uncertainties, and actual results could differ materially from those discussed. The risks and uncertainties that could cause our results to differ materially from those included in the forward-looking statements include, but are not limited to, volatility in our revenue and operating results; risks related to our business strategy; including our marketing strategy and spend; responding to changes in the market; effectively dealing with challenges arising from our international operations; retaining existing customers and adding new customers; retaining and adding new and high quality merchants; cyber security breaches; incurring expenses as we expand our business; competing against smaller competitors and competitors with more financial resources than us; maintaining favorable terms with our business partners; maintaining a strong brand; managing inventory and order fulfillment risks; integrating our technology platforms; managing refund risks; retaining our executive team; litigation; regulations, including the CARD Act and regulation of the Internet; tax liabilities; tax legislation; maintaining our information technology infrastructure; protecting our intellectual property; handling acquisitions, joint ventures and strategic investments effectively; seasonality; payment-related risks; customer and merchant fraud; global economic uncertainty; compliance with rules and regulations associated with being a public company; and our ability to raise capital if necessary. We urge you to refer to the factors included under the headings ”Risk Factors” and ”Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, copies of which may be obtained by visiting the company’s Investor Relations web site at http://investor.groupon.com or the SEC’sweb site at www.sec.gov. Groupon’s actual results could differ materially from those predicted or implied and reported results should not be considered an indication of future performance.

    You should not rely upon forward-looking statements as predictions of future events. Although Groupon believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither the company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. The forward-looking statements reflect Groupon’s expectations as of October 30, 2014. Groupon undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in its expectations.

    About Groupon

    Groupon (NASDAQ: GRPN) is a global leader of local commerce and the place you start when you want to buy just about anything, anytime, anywhere. By leveraging the company’s global relationships and scale, Groupon offers consumers a vast marketplace of unbeatable deals all over the world. Shoppers discover the best a city has to offer on the web or on mobile with Groupon Local, enjoy vacations with Groupon Getaways, and find a curated selection of electronics, fashion, home furnishings and more with Groupon Goods.

    Groupon is redefining how traditional small businesses attract, retain and interact with customers by providing merchants with a suite of products and services, including customizable deal campaigns, credit card payment processing capabilities, and point-of-sale solutions that help businesses grow and operate more effectively. To search for great deals or subscribe to Groupon emails, visitwww.Groupon.com. To download Groupon’s five-star mobile apps, visit www.groupon.com/mobile. To learn more about the company’s merchant solutions and how to work with Groupon, visit www.GrouponWorks.com.

    Groupon, Inc.
    Summary Consolidated and Segment Results
    (in thousands, except share and per share amounts)
    (unaudited)
    Three Months Ended Y/Y % Nine Months Ended Y/Y %
    September 30, Growth September 30, Growth
    Y/Y % excluding Y/Y % excluding
    2014 2013 Growth FX Effect (2) FX (2) 2014 2013 Growth FX Effect (2) FX (2)
    Gross Billings (1):
    North America $ 774,286 $ 664,999 16.4 % $ (484 ) 16.5 % $ 2,354,900 $ 2,058,523 14.4 % $ (1,995 ) 14.5 %
    EMEA 489,423 443,318 10.4 % 2,156 9.9 % 1,486,266 1,417,886 4.8 % 38,788 2.1 %
    Rest of World 597,026 234,331 154.8 % 18,080 147.1 % 1,655,826 687,814 140.7 % 1,949 140.5 %
    Consolidated gross billings $ 1,860,735 $ 1,342,648 38.6 % $ 19,752 37.1 % $ 5,496,992 $ 4,164,223 32.0 % $ 38,742 31.1 %
    Revenue:
    North America $ 418,494 $ 360,838 16.0 % $ (109 ) 16.0 % $ 1,273,487 $ 1,077,574 18.2 % $ (601 ) 18.2 %
    EMEA 230,072 147,950 55.5 % 881 54.9 % 688,655 491,710 40.1 % 18,079 36.4 %
    Rest of World 108,488 86,271 25.8 % (430 ) 26.3 % 304,125 235,924 28.9 % (12,854 ) 34.4 %
    Consolidated revenue $ 757,054 $ 595,059 27.2 % $ 342 27.2 % $ 2,266,267 $ 1,805,208 25.5 % $ 4,624 25.3 %
    (Loss) income from operations $ (5,429 ) $ 13,812 (139.3 ) % $ (159 ) (138.2 ) % $ (33,236 ) $ 62,402 (153.3 ) % $ 2,325 (157.0 ) %
    Net loss attributable to Groupon, Inc. $ (21,208 ) $ (2,580 ) $ (81,878 ) $ (14,146 )
    Net loss per share
    Basic $ (0.03 ) $ (0.00 ) $ (0.12 ) $ (0.02 )
    Diluted $ (0.03 ) $ (0.00 ) $ (0.12 ) $ (0.02 )
    Weighted average number of shares outstanding
    Basic 669,526,524 666,432,848 675,814,535 662,531,567
    Diluted 669,526,524 666,432,848 675,814,535 662,531,567
    (1) Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.
    (2) Represents the change in financial measures that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three and nine months ended September 30, 2013.
    Groupon, Inc.
    Condensed Consolidated Statements of Cash Flows
    (in thousands)
    (unaudited)
    Three Months Ended Nine Months Ended
    September 30, September 30,
    2014 2013 2014 2013
    Operating activities
    Net loss $ (19,018 ) $ (1,292 ) $ (75,303 ) $ (10,085 )
    Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
    Depreciation and amortization of property, equipment and software 26,317 17,816 71,476 49,186
    Amortization of acquired intangible assets 11,829 5,333 36,068 16,131
    Stock-based compensation 34,574 26,870 89,958 89,223
    Deferred income taxes (2,472 ) (659 ) (1,956 ) (1,225 )
    Excess tax benefits on stock-based compensation (2,641 ) (8,348 ) (12,573 ) (12,116 )
    Loss on equity method investments 91 25 459 58
    Net gain from changes in fair value of contingent consideration (1,020 ) (1,529 ) (1,059 ) (2,276 )
    Impairment of investments 1,448 2,036
    Change in assets and liabilities, net of acquisitions:
    Restricted cash 6,040 (3,348 ) 6,961 (81 )
    Accounts receivable (2,002 ) 11,940 (29,267 ) 8,999
    Prepaid expenses and other current assets (26,499 ) (2,846 ) (32,397 ) 13,146
    Accounts payable (3,811 ) (3,036 ) (8,964 ) (25,867 )
    Accrued merchant and supplier payables (19,274 ) (34,315 ) (61,219 ) (72,290 )
    Accrued expenses and other current liabilities 9,790 (20,553 ) (27,091 ) (27,790 )
    Other, net 32,114 2,037 44,873 15,144
    Net cash provided by (used in) operating activities 45,466 (11,905 ) 2,002 40,157
    Net cash used in investing activities (20,461 ) (26,444 ) (193,567 ) (72,985 )
    Net cash used in financing activities (16,823 ) (8,970 ) (173,068 ) (26,253 )
    Effect of exchange rate changes on cash and cash equivalents (21,102 ) 5,165 (20,671 ) (10,351 )
    Net decrease in cash and cash equivalents (12,920 ) (42,154 ) (385,304 ) (69,432 )
    Cash and cash equivalents, beginning of period 868,088 1,182,011 1,240,472 1,209,289
    Cash and cash equivalents, end of period $ 855,168 $ 1,139,857 $ 855,168 $ 1,139,857
    Groupon, Inc.
    Condensed Consolidated Statements of Operations
    (in thousands, except share and per share amounts)
    (unaudited)
    Three Months Ended September 30, Nine Months Ended September 30,
    2014 2013 2014 2013
    Revenue:
    Third party and other $ 399,803 $ 394,987 $ 1,232,173 $ 1,252,966
    Direct 357,251 200,072 1,034,094 552,242
    Total revenue 757,054 595,059 2,266,267 1,805,208
    Cost of revenue:
    Third party and other 61,497 54,001 182,226 179,524
    Direct 315,413 181,436 928,314 502,359
    Total cost of revenue 376,910 235,437 1,110,540 681,883
    Gross profit 380,144 359,622 1,155,727 1,123,325
    Operating expenses:
    Marketing 59,935 53,265 203,134 158,319
    Selling, general and administrative 325,942 294,074 983,751 904,880
    Acquisition-related (benefit) expense, net (304 ) (1,529 ) 2,078 (2,276 )
    Total operating expenses 385,573 345,810 1,188,963 1,060,923
    (Loss) income from operations (5,429 ) 13,812 (33,236 ) 62,402
    Other (expense) income, net (1) (20,023 ) 832 (21,886 ) (9,830 )
    (Loss) income before (benefit) provision for income taxes (25,452 ) 14,644 (55,122 ) 52,572
    (Benefit) provision for income taxes (6,434 ) 15,936 20,181 62,657
    Net loss (19,018 ) (1,292 ) (75,303 ) (10,085 )
    Net income attributable to noncontrolling interests (2,190 ) (1,288 ) (6,575 ) (4,061 )
    Net loss attributable to Groupon, Inc. $ (21,208 ) $ (2,580 ) $ (81,878 ) $ (14,146 )
    Net loss per share
    Basic $ (0.03 ) $ (0.00 ) $ (0.12 ) $ (0.02 )
    Diluted $ (0.03 ) $ (0.00 ) $ (0.12 ) $ (0.02 )
    Weighted average number of shares outstanding
    Basic 669,526,524 666,432,848 675,814,535 662,531,567
    Diluted 669,526,524 666,432,848 675,814,535 662,531,567
    (1) Other (expense) income, net includes foreign currency (losses) gains of ($18,638) and $326 for the three months endedSeptember 30, 2014 and 2013, respectively, and ($20,108) and ($11,156) for the nine months ended September 30, 2014 and 2013, respectively.
    Groupon, Inc.
    Condensed Consolidated Balance Sheets
    (in thousands, except share and per share amounts)
    September 30, 2014 December 31, 2013
    (unaudited)
    Assets
    Current assets:
    Cash and cash equivalents $ 855,168 $ 1,240,472
    Accounts receivable, net 124,598 83,673
    Deferred income taxes 26,564 27,938  
    Prepaid expenses and other current assets 243,750 210,415
    Total current assets 1,250,080 1,562,498
    Property, equipment and software, net 170,534 134,423
    Goodwill 441,290 220,827
    Intangible assets, net 119,810 28,443
    Investments 23,639 20,652
    Deferred income taxes, non-current 44,709 35,941
    Other non-current assets 22,103 39,226
    Total Assets $ 2,072,165 $ 2,042,010  
    Liabilities and Equity
    Current liabilities:
    Accounts payable $ 25,848 $ 27,573
    Accrued merchant and supplier payables 754,628 752,943
    Accrued expenses 223,677 226,986
    Deferred income taxes 44,787 47,558
    Other current liabilities 134,116 132,718
    Total current liabilities 1,183,056 1,187,778
    Deferred income taxes, non-current 9,668 10,853
    Other non-current liabilities 151,486 131,697
    Total Liabilities 1,344,210 1,330,328
    Commitments and contingencies
    Stockholders’ Equity
    Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized, 694,272,530 shares issued and 668,185,526 shares outstanding atSeptember 30, 2014 and 670,149,976 shares issued and 665,717,176 shares outstanding at December 31, 2013 70 67
    Class B common stock, par value $0.0001 per share, 10,000,000 shares authorized, 2,399,976 shares issued and outstanding at September 30, 2014 and December 31, 2013
    Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized, no shares issued and outstanding at September 30, 2014 and December 31, 2013
    Additional paid-in capital 1,814,040 1,584,211
    Treasury stock, at cost, 26,087,004 shares at September 30, 2014 and 4,432,800 shares at December 31, 2013 (190,355 ) (46,587 )
    Accumulated deficit (930,748 ) (848,870 )
    Accumulated other comprehensive income 34,948 24,830
    Total Groupon, Inc. Stockholders’ Equity 727,955 713,651
    Noncontrolling interests (1,969 )
    Total Equity 727,955 711,682
    Total Liabilities and Equity $ 2,072,165 $ 2,042,010
    Groupon, Inc.
    Segment Information
    (in thousands)
    (unaudited)
    Three Months Ended September 30, Nine Months Ended September 30,
    2014 2013 2014 2013
    North America
    Gross billings (1) $ 774,286 $ 664,999 $ 2,354,900 $ 2,058,523
    Revenue $ 418,494 $ 360,838 $ 1,273,487 $ 1,077,574
    Segment cost of revenue and operating expenses (2) 405,910 335,670 1,234,973 962,532
    Segment operating income (2) $ 12,584 $ 25,168 $ 38,514 $ 115,042
    Segment operating income as a percent of segment gross billings 1.6 % 3.8 % 1.6 % 5.6 %
    Segment operating income as a percent of segment revenue 3.0 % 7.0 % 3.0 % 10.7 %
    EMEA
    Gross billings (1) $ 489,423 $ 443,318 $ 1,486,266 $ 1,417,886
    Revenue $ 230,072 $ 147,950 $ 688,655 $ 491,710
    Segment cost of revenue and operating expenses (2) 207,643 132,346 619,594 417,222
    Segment operating income (2) $ 22,429 $ 15,604 $ 69,061 $ 74,488
    Segment operating income as a percent of segment gross billings 4.6 % 3.5 % 4.6 % 5.3 %
    Segment operating income as a percent of segment revenue 9.7 % 10.5 % 10.0 % 15.1 %
    Rest of World
    Gross billings (1) $ 597,026 $ 234,331 $ 1,655,826 $ 687,814
    Revenue $ 108,488 $ 86,271 $ 304,125 $ 235,924
    Segment cost of revenue and operating expenses (2) 114,660 87,890 352,900 276,105
    Segment operating loss (2) $ (6,172 ) $ (1,619 ) $ (48,775 ) $ (40,181 )
    Segment operating loss as a percent of segment gross billings (1.0 ) % (0.7 ) % (2.9 ) % (5.8 ) %
    Segment operating loss as a percent of segment revenue (5.7 ) % (1.9 ) % (16.0 ) % (17.0 ) %
    (1) Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.
    (2) Segment cost of revenue and operating expenses and segment operating income (loss) exclude stock-based compensation and acquisition-related (benefit) expense, net.
    Groupon, Inc.
    Non-GAAP Reconciliation Schedules
    (in thousands, except share and per share amounts)
    (unaudited)
    Adjusted EBITDA and earnings per share excluding stock-based compensation, amortization of acquired intangible assets and acquisition-related (benefit) expense, net of tax, are non-GAAP financial measures. The Company reconciles Adjusted EBITDA to the most comparable U.S. GAAP financial measure, ”Net loss,” for the periods presented and the Company reconciles earnings per share excluding stock-based compensation, amortization of acquired intangible assets and acquisition-related (benefit) expense, net to the most comparable U.S. GAAP financial measure, ”Diluted net loss per share,” for the periods presented.
    The following is a quarterly reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, ”Net loss.”
    Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
    Net loss $ (1,292 ) $ (78,861 ) $ (35,363 ) $ (20,922 ) $ (19,018 )
    Adjustments:
    Stock-based compensation 26,870 32,239 23,729 31,655 34,574
    Acquisition-related (benefit) expense, net (1,529 ) 2,265 1,785 597 (304 )
    Depreciation and amortization 23,149 24,132 34,740 34,658 38,146
    Other (income) expense, net (832 ) 84,833 840 1,023 20,023
    Provision (benefit) for income taxes 15,936 7,380 14,570 12,045 (6,434 )
    Total adjustments 63,594 150,849 75,664 79,978 86,005
    Adjusted EBITDA $ 62,302 $ 71,988 $ 40,301 $ 59,056 $ 66,987
    The following is a reconciliation of diluted net loss per share to diluted earnings per share excluding stock-based compensation, amortization of acquired intangible assets and acquisition-related (benefit) expense, net for the three and nine months endedSeptember 30, 2014:
    Three Months Ended Nine Months Ended
    September 30, 2014 September 30, 2014
    Net loss attributable to common stockholders $ (21,208 ) $ (81,878 )
    Stock-based compensation 34,574 89,958
    Amortization of acquired intangible assets 11,829 36,068
    Acquisition-related (benefit) expense, net (304 ) 2,078
    Income tax effect of adjustments (7,361 ) (31,090 )
    Net earnings attributable to common stockholders excluding stock-based compensation,
    amortization of acquired intangible assets and acquisition-related (benefit) expense, net $ 17,530 $ 15,136
    Diluted shares 669,526,524 675,814,535
    Incremental diluted shares 8,907,050 10,317,632
    Adjusted diluted shares 678,433,574 686,132,167
    Diluted net loss per share $ (0.03 ) $ (0.12 )
    Impact of stock-based compensation, amortization of acquired intangible assets
    and acquisition-related (benefit) expense, net (1) 0.06 0.14
    Diluted earnings per share excluding stock-based compensation, amortization of acquired
    intangible assets and acquisition-related (benefit) expense, net (1) $ 0.03 $ 0.02
    (1) The sum of per share amounts for quarterly periods may not equal year-to-date amounts due to rounding.
    Foreign exchange rate neutral operating results are non-GAAP financial measures. The Company reconciles foreign exchange rate neutral operating results to the most comparable U.S. GAAP financial measures, ”Gross billings,” ”Revenue” and ”(Loss) income from operations,” respectively, for the periods presented. The Company reconciles ”foreign exchange rate neutral Gross billings growth” and ”foreign exchange rate neutral Revenue growth” to year-over-year growth rates for the most comparable U.S. GAAP financial measures, ”Gross billings growth” and ”Revenue growth,” respectively, for the periods presented.
    The effect on the Company’s gross billings, revenue and loss from operations from changes in exchange rates versus the U.S. Dollar for the three months ended September 30, 2014 was as follows:
    Three Months Ended September 30, 2014 Three Months Ended September 30, 2014
    At Avg. Exchange At Avg. Exchange
    Q3 2013 Rate As Q2 2014 Rate As
    Rates (1) Effect (2) Reported Rates (3) Effect (2) Reported
    Gross billings $ 1,840,983 $ 19,752 $ 1,860,735 $ 1,877,385 $ (16,650 ) $ 1,860,735
    Revenue $ 756,712 $ 342 $ 757,054 $ 765,015 $ (7,961 ) $ 757,054
    Loss from operations $ (5,270 ) $ (159 ) $ (5,429 ) $ (5,335 ) $ (94 ) $ (5,429 )
    The effect on the Company’s gross billings, revenue and (loss) income from operations from changes in exchange rates versus the U.S. Dollar for the nine months ended September 30, 2014 was as follows:
    Nine Months Ended September 30, 2014 Nine Months Ended September 30, 2014
    At Avg. Exchange At Avg. Exchange
    Q3 2013 YTD Rate As Q4’13 – Q2’14 Rate As
    Rates (1) Effect (2) Reported Rates (3) Effect (2) Reported
    Gross billings $ 5,458,250 $ 38,742 $ 5,496,992 $ 5,503,487 $ (6,495 ) $ 5,496,992
    Revenue $ 2,261,643 $ 4,624 $ 2,266,267 $ 2,273,122 $ (6,855 ) $ 2,266,267
    (Loss) income from operations $ (35,561 ) $ 2,325 $ (33,236 ) $ (33,353 ) $ 117 $ (33,236 )
    (1) Represents the financial statement balances that would have resulted had average exchange rates in the reporting period been the same as those in effect during the three and nine months ended September 30, 2013.
    (2) Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable period.
    (3) Represents the financial statement balances that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three and nine months ended June 30, 2014.
    The following is a quarterly reconciliation of foreign exchange rate neutral Gross billings growth from the comparable quarterly periods of the prior year to reported Gross billings growth from the comparable quarterly periods of the prior year.
    Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
    EMEA Gross billings growth, excluding FX 9 % 3 % 1 % (4 ) % 10 %
    FX Effect 3 % 3 % 3 % 4 % %
    EMEA Gross billings growth 12 % 6 % 4 % % 10 %
    Rest of World Gross billings growth, excluding FX (4 ) % (2 ) % 133 % 141 % 147 %
    FX Effect (9 ) % (9 ) % (10 ) % 4 % 8 %
    Rest of World Gross billings growth (13 ) % (11 ) % 123 % 145 % 155 %
    Consolidated Gross billings growth, excluding FX 11 % 5 % 30 % 27 % 37 %
    FX Effect (1 ) % % (1 ) % 2 % 2 %
    Consolidated Gross billings growth 10 % 5 % 29 % 29 % 39 %
    The following is a quarterly reconciliation of foreign exchange rate neutral Revenue growth from the comparable quarterly periods of the prior year to reported Revenue growth from the comparable quarterly periods of the prior year.
    Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
    EMEA Revenue growth, excluding FX (23 ) % 38 % 22 % 36 % 55 %
    FX Effect 2 % 5 % 4 % 6 % 1 %
    EMEA Revenue growth (21 ) % 43 % 26 % 42 % 56 %
    Rest of World Revenue growth, excluding FX 7 % (6 ) % 35 % 44 % 26 %
    FX Effect (11 ) % (9 ) % (12 ) % (4 ) % %
    Rest of World Revenue growth (4 ) % (15 ) % 23 % 40 % 26 %
    Consolidated Revenue growth, excluding FX 6 % 20 % 26 % 22 % 27 %
    FX Effect (1 ) % % % 2 % %
    Consolidated Revenue growth 5 % 20 % 26 % 24 % 27 %
    Groupon, Inc.
    Supplemental Financial Information and Business Metrics (11)
    (financial data in thousands; active customers in millions)
    (unaudited)
    Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
    Segments
    North America Segment:
    Gross Billings (1):
    Local (2) Gross Billings $ 405,913 $ 439,131 $ 456,952 $ 461,366 $ 446,573
    Goods Gross Billings 194,565 286,039 242,896 247,618 242,893
    Travel (2) Gross Billings 64,521 63,551 81,921 89,861 84,820
    Total Gross Billings $ 664,999 $ 788,721 $ 781,769 $ 798,845 $ 774,286
    Year-over-year growth 20 % 10 % 15 % 12 % 16 %
    % Third Party and Other 72 % 67 % 70 % 70 % 69 %
    % Direct 28 % 33 % 30 % 30 % 31 %
    Gross Billings Trailing Twelve Months (TTM) $ 2,777,475 $ 2,847,244 $ 2,947,694 $ 3,034,334 $ 3,143,621
    Revenue (3):
    Local Revenue $ 162,346 $ 161,601 $ 177,247 $ 164,500 $ 161,912
    Goods Revenue 185,914 268,281 237,435 241,626 238,955
    Travel Revenue 12,578 13,902 16,380 17,805 17,627
    Total Revenue $ 360,838 $ 443,784 $ 431,062 $ 423,931 $ 418,494
    Year-over-year growth 24 % 18 % 27 % 12 % 16 %
    % Third Party and Other 49 % 41 % 45 % 43 % 43 %
    % Direct 51 % 59 % 55 % 57 % 57 %
    Revenue TTM $ 1,452,925 $ 1,521,358 $ 1,612,866 $ 1,659,615 $ 1,717,271
    Gross Profit (4):
    Local Gross Profit $ 138,890 $ 140,944 $ 152,622 $ 142,674 $ 138,189
    % of North America Total Local Gross Billings 34.2 % 32.1 % 33.4 % 30.9 % 30.9 %
    Goods Gross Profit 21,609 21,030 12,604 22,961 23,953
    % of North America Total Goods Gross Billings 11.1 % 7.4 % 5.2 % 9.3 % 9.9 %
    Travel Gross Profit 11,070 12,352 14,442 14,365 14,000
    % of North America Total Travel Gross Billings 17.2 % 19.4 % 17.6 % 16.0 % 16.5 %
    Total Gross Profit $ 171,569 $ 174,326 $ 179,668 $ 180,000 $ 176,142
    Year-over-year growth 7 % 15 % 4 % (7 ) % 3 %
    % Third Party and Other 90 % 91 % 94 % 88 % 87 %
    % Direct 10 % 9 % 6 % 12 % 13 %
    % of North America Total Gross Billings 25.8 % 22.1 % 23.0 % 22.5 % 22.7 %
    EMEA Segment:
    Gross Billings:
    Local Gross Billings $ 207,803 $ 277,472 $ 262,141 $ 227,266 $ 218,615
    Goods Gross Billings 169,849 219,880 183,013 190,957 191,006
    Travel Gross Billings 65,666 68,361 68,434 65,032 79,802
    Total Gross Billings $ 443,318 $ 565,713 $ 513,588 $ 483,255 $ 489,423
    Year-over-year growth 12 % 6 % 4 % % 10 %
    Year-over-year growth, excluding FX (5) 9 % 3 % 1 % (4 ) % 10 %
    % Third Party and Other 98 % 83 % 83 % 80 % 78 %
    % Direct 2 % 17 % 17 % 20 % 22 %
    Gross Billings TTM $ 1,950,367 $ 1,983,599 $ 2,004,869 $ 2,005,874 $ 2,051,979
    Revenue:
    Local Revenue $ 92,141 $ 116,061 $ 109,120 $ 96,485 $ 90,002
    Goods Revenue 41,279 119,274 106,889 115,413 123,110
    Travel Revenue 14,530 15,870 14,884 15,792 16,960
    Total Revenue $ 147,950 $ 251,205 $ 230,893 $ 227,690 $ 230,072
    Year-over-year growth (21 ) % 43 % 26 % 42 % 56 %
    Year-over-year growth, excluding FX (23 ) % 38 % 22 % 36 % 55 %
    % Third Party and Other 94 % 61 % 61 % 57 % 53 %
    % Direct 6 % 39 % 39 % 43 % 47 %
    Revenue TTM $ 667,988 $ 742,915 $ 790,010 $ 857,738 $ 939,860
    Gross Profit:
    Local Gross Profit $ 81,808 $ 105,210 $ 100,066 $ 90,373 $ 83,956
    % of EMEA Total Local Gross Billings 39.4 % 37.9 % 38.2 % 39.8 % 38.4 %
    Goods Gross Profit 28,943 33,526 27,302 35,432 32,252
    % of EMEA Total Goods Gross Billings 17.0 % 15.2 % 14.9 % 18.6 % 16.9 %
    Travel Gross Profit 12,930 14,457 13,669 14,894 15,440
    % of EMEA Total Travel Gross Billings 19.7 % 21.1 % 20.0 % 22.9 % 19.3 %
    Total Gross Profit $ 123,681 $ 153,193 $ 141,037 $ 140,699 $ 131,648
    Year-over-year growth (24 ) % 7 % (8 ) % 1 % 6 %
    % Third Party and Other 99 % 91 % 92 % 85 % 85 %
    % Direct 1 % 9 % 8 % 15 % 15 %
    % of EMEA Total Gross Billings 27.9 % 27.1 % 27.5 % 29.1 % 26.9 %
    Rest of World Segment:
    Gross Billings:
    Local Gross Billings $ 118,718 $ 116,824 $ 167,833 $ 170,237 $ 190,254
    Goods Gross Billings 78,973 89,451 283,091 281,300 289,210
    Travel Gross Billings 36,640 32,398 70,930 85,409 117,562
    Total Gross Billings $ 234,331 $ 238,673 $ 521,854 $ 536,946 $ 597,026
    Year-over-year growth (13 ) % (11 ) % 123 % 145 % 155 %
    Year-over-year growth, excluding FX (4 ) % (2 ) % 133 % 141 % 147 %
    % Third Party and Other 97 % 97 % 99 % 99 % 98 %
    % Direct 3 % 3 % 1 % 1 % 2 %
    Gross Billings TTM $ 956,833 $ 926,487 $ 1,214,209 $ 1,531,804 $ 1,894,499
    Revenue:
    Local Revenue $ 51,900 $ 40,847 $ 43,814 $ 42,711 $ 45,085
    Goods Revenue 25,061 26,158 41,855 45,537 48,889
    Travel Revenue 9,310 6,453 10,013 11,707 14,514
    Total Revenue $ 86,271 $ 73,458 $ 95,682 $ 99,955 $ 108,488
    Year-over-year growth (4 ) % (15 ) % 23 % 40 % 26 %
    Year-over-year growth, excluding FX 7 % (6 ) % 35 % 44 % 26 %
    % Third Party and Other 91 % 90 % 94 % 93 % 90 %
    % Direct 9 % 10 % 6 % 7 % 10 %
    Revenue TTM $ 322,597 $ 309,382 $ 327,014 $ 355,366 $ 377,583
    Gross Profit:
    Local Gross Profit $ 44,435 $ 33,596 $ 34,748 $ 35,618 $ 38,592
    % of Rest of World Total Local Gross Billings 37.4 % 28.8 % 20.7 % 20.9 % 20.3 %
    Goods Gross Profit 12,016 11,781 22,135 24,623 22,877
    % of Rest of World Total Goods Gross Billings 15.2 % 13.2 % 7.8 % 8.8 % 7.9 %
    Travel Gross Profit 7,921 5,312 8,133 8,922 10,885
    % of Rest of World Total Travel Gross Billings 21.6 % 16.4 % 11.5 % 10.4 % 9.3 %
    Total Gross Profit $ 64,372 $ 50,689 $ 65,016 $ 69,163 $ 72,354
    Year-over-year growth 1 % (16 ) % 23 % 37 % 12 %
    % Third Party and Other 99 % 101 % 102 % 100 % 102 %
    % Direct 1 % (1 ) % (2 ) % % (2 ) %
    % of Rest of World Total Gross Billings 27.5 % 21.2 % 12.5 % 12.9 % 12.1 %
    Consolidated Results of Operations:
    Gross Billings:
    Local Gross Billings $ 732,434 $ 833,427 $ 886,926 $ 858,869 $ 855,442
    Goods Gross Billings 443,387 595,370 709,000 719,875 723,109
    Travel Gross Billings 166,827 164,310 221,285 240,302 282,184
    Total Gross Billings $ 1,342,648 $ 1,593,107 $ 1,817,211 $ 1,819,046 $ 1,860,735
    Year-over-year growth 10 % 5 % 29 % 29 % 39 %
    Year-over-year growth, excluding FX 11 % 5 % 30 % 27 % 37 %
    % Third Party and Other 85 % 77 % 82 % 81 % 81 %
    % Direct 15 % 23 % 18 % 19 % 19 %
    Gross Billings TTM $ 5,684,675 $ 5,757,330 $ 6,166,772 $ 6,572,012 $ 7,090,099
    Year-over-year growth 12 % 7 % 14 % 18 % 25 %
    Revenue:
    Local Revenue $ 306,387 $ 318,509 $ 330,181 $ 303,696 $ 296,999
    Goods Revenue 252,254 413,713 386,179 402,576 410,954
    Travel Revenue 36,418 36,225 41,277 45,304 49,101
    Total Revenue $ 595,059 $ 768,447 $ 757,637 $ 751,576 $ 757,054
    Year-over-year growth 5 % 20 % 26 % 23 % 27 %
    Year-over-year growth, excluding FX 6 % 20 % 26 % 22 % 27 %
    % Third Party and Other 66 % 52 % 56 % 54 % 53 %
    % Direct 34 % 48 % 44 % 46 % 47 %
    Revenue TTM  $ 2,443,510 $ 2,573,655 $ 2,729,890 $ 2,872,719 $ 3,034,714
    Year-over-year growth 12 % 10 % 15 % 19 % 24 %
    Gross Profit:
    Local Gross Profit $ 265,133 $ 279,750 $ 287,436 $ 268,665 $ 260,737
    % of Total Consolidated Local Gross Billings 36.2 % 33.6 % 32.4 % 31.3 % 30.5 %
    Goods Gross Profit 62,568 66,337 62,041 83,016 79,082
    % of Total Consolidated Goods Gross Billings 14.1 % 11.1 % 8.8 % 11.5 % 10.9 %
    Travel Gross Profit 31,921 32,121 36,244 38,181 40,325
    % of Total Consolidated Travel Gross Billings 19.1 % 19.5 % 16.4 % 15.9 % 14.3 %
    Total Gross Profit $ 359,622 $ 378,208 $ 385,721 $ 389,862 $ 380,144
    Year-over-year growth (7 ) % 6 % 2 % 1 % 6 %
    % Third Party and Other 95 % 92 % 94 % 89 % 89 %
    % Direct 5 % 8 % 6 % 11 % 11 %
    % of Total Consolidated Gross Billings 26.8 % 23.7 % 21.2 % 21.4 % 20.4 %
    Adjusted EBITDA $ 62,302 $ 71,988 $ 40,301 $ 59,056 $ 66,987
    % of Total Consolidated Gross Billings 4.6 % 4.5 % 2.2 % 3.2 % 3.6 %
    % of Total Consolidated Revenue 10.5 % 9.4 % 5.3 % 7.9 % 8.8 %
    Free cash flow is a non-GAAP financial measure. The following is a reconciliation of free cash flow to the most comparable U.S. GAAP financial measure, ”Net cash provided by (used in) operating activities.”
    Net cash (used in) provided by operating activities $ (11,905 ) $ 178,275 $ (20,717 ) $ (22,747 ) $ 45,466
    Purchases of property and equipment and capitalized software (15,064 ) (19,931 ) (16,355 ) (31,053 ) (20,053 )
    Free cash flow $ (26,969 ) $ 158,344 $ (37,072 ) $ (53,800 ) $ 25,413
    Net cash provided by operating activities (TTM) $ 105,874 $ 218,432 $ 188,955 $ 122,906 $ 180,277
    Purchases of property and equipment and capitalized software (TTM) (83,608 ) (63,505 ) (65,392 ) (82,403 ) (87,392 )
    Free cash flow (TTM) $ 22,266 $ 154,927 $ 123,563 $ 40,503 $ 92,885
    Net cash used in investing activities $ (26,444 ) $ (23,330 ) $ (138,608 ) $ (34,498 ) $ (20,461 )
    Net cash used in financing activities $ (8,970 ) $ (55,444 ) $ (41,492 ) $ (114,753 ) $ (16,823 )
    Net cash used in investing activities (TTM) $ (125,738 ) $ (96,315 ) $ (204,244 ) $ (222,880 ) $ (216,897 )
    Net cash used in financing activities (TTM) $ (32,748 ) $ (81,697 ) $ (113,847 ) $ (220,659 ) $ (228,512 )
    Other Metrics:
    Active Customers (6)
    North America 19.9 20.8 21.8 22.6 23.5
    EMEA 14.0 14.2 14.5 14.5 14.9
    Rest of World (7) 8.7 8.7 14.1 14.5 14.3
    Total Active Customers (8) 42.6 43.7 50.4 51.6 52.7
    TTM Gross Billings / Average Active Customer (9)
    North America $ 155 $ 150 $ 147 $ 145 $ 145
    EMEA $ 137 $ 139 $ 141 $ 141 $ 142
    Rest of World (7) $ 109 $ 104 $ 106 $ 132 $ 165
    Consolidated (8) $ 139 $ 137 $ 135 $ 141 $ 149
    Headcount
    Sales (10) 4,801 4,834 5,231 5,057 4,929
    % North America 28 % 29 % 27 % 26 % 26 %
    % EMEA 37 % 37 % 37 % 39 % 39 %
    % Rest of World 35 % 34 % 36 % 35 % 35 %
    Other 6,453 6,449 7,099 6,888 6,827
    Total Headcount 11,254 11,283 12,330 11,945 11,756
    (1) Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.
    (2) Local represents deals from local merchants, deals with national merchants, and deals through local events. Other revenue transactions, which include advertising, payment processing, point of sale and commission revenue, were previously aggregated with our Travel category. During the three months ended March 31, 2014, the Company updated its presentation of category information to include gross billings, revenue and gross profit from those other revenue sources within the Local category, and prior period category information has been retrospectively adjusted to conform to the current period presentation.
    (3) Includes third party revenue, direct revenue and other revenue. Third party revenue is related to sales for which the Company acts as a marketing agent for the merchant. This revenue is recorded on a net basis. Direct revenue is primarily related to the sale of products for which the Company is the merchant of record. These revenues are accounted for on a gross basis, with the cost of inventory included in cost of revenue. Other revenue primarily consists of advertising revenue, payment processing revenue, point of sale revenue and commission revenue.
    (4) Represents third party revenue, direct revenue and other revenue reduced by cost of revenue. Cost of revenue is comprised of direct and certain indirect costs incurred to generate revenue. Third party cost of revenue includes estimated refunds for which the merchant’s share is not recoverable. Direct cost of revenue includes the cost of inventory, shipping and fulfillment costs and inventory markdowns. Other costs incurred to generate revenue are allocated to cost of third party and other revenue and direct revenue for each of our categories (Local, Goods, and Travel) in proportion to gross billings during the period.
    (5) Represents the change in financial measures that would have resulted had average exchange rates in the reporting periods been the same as those in effect in the prior year period.
    (6) Reflects the total number of unique user accounts who have purchased a voucher or product from us during the trailing twelve months.
    (7) Active customers in our Rest of World segment as of September 30, 2013, December 31, 2013, March 31, 2014, and June 30, 2014 have been reduced by 0.9 million, 1.2 million, 1.4 million, and 1.6 million, respectively, from the amounts previously reported to correct that operational information. Those adjustments increased TTM gross billings per average active customer in our Rest of World segment for the 12-month periods ended September 30, 2013, December 31, 2013, March 31, 2014, and June 30, 2014 by$7, $9, $9, and $13, respectively, from the amounts previously reported.
    (8) The adjustments of active customers in our Rest of World segment as of September 30, 2013, December 31, 2013, March 31, 2014, and June 30, 2014, described in footnote (7) above, reduced consolidated active customers by the same amounts. Those adjustments increased consolidated TTM gross billings per average active customer for the 12-month periods ended September 30, 2013, December 31, 2013, March 31, 2014, and June 30, 2014 by $2, $3, $3, and $4, respectively, from the amounts previously reported.
    (9) Reflects the total gross billings generated in the trailing twelve months per average active customer over that period.
    (10) Includes merchant sales representatives, as well as sales support.
    (11) The definition, methodology and appropriateness of each of our supplemental metrics is reviewed periodically. As a result, metrics are subject to removal and/or change.

     

    Groupon, Inc.

    Image via Groupon

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