WebProNews » Groupon http://www.webpronews.com Breaking News in Tech, Search, Social, & Business Sat, 18 May 2013 22:49:00 +0000 en hourly 1 http://wordpress.org/?v=3.3.2 Ex-Groupon CEO Andrew Mason Made an Album of ‘Motivational Business Music’ That’s Dropping in a Few Weeks http://www.webpronews.com/ex-groupon-ceo-andrew-mason-made-an-album-of-motivational-business-music-thats-dropping-in-a-few-weeks-2013-05 http://www.webpronews.com/ex-groupon-ceo-andrew-mason-made-an-album-of-motivational-business-music-thats-dropping-in-a-few-weeks-2013-05#comments Fri, 17 May 2013 14:43:40 +0000 Josh Wolford http://www.webpronews.com/?p=230568 Since his departure from the daily deals company, former Groupon CEO Andrew Mason says he’s been traveling, reading, and losing some weight. Oh, and also recording a 7-track album of “motivational business music.”

It’s called Hardly Workin’, and he says that it should be available on iTunes in the next few weeks.

I’ll let Mason explain his new venture:

I managed over 12,000 people at Groupon, most under the age of 25. One thing that surprised me was that many would arrive at orientation with minimal understanding of basic business wisdom. “Haven’t you read any business books? Good to Great? Winning? The One Minute Manager?” I’d ask. “Business books? Not really our thing,” was the typical response. I came to realize that there was a real need to present business wisdom in a format that is more accessible to the younger generation.

It was with this in mind that I spent a week in LA earlier this month recording Hardly Workin’, a seven song album of motivational business music targeted at people newly entering the workforce. These songs will help young people understand some of the ideas that I’ve found to be a key part of becoming a productive and effective employee. I’m really happy with the results and look forward to sharing them as soon as I figure out how to load music onto iTunes, hopefully in the next few weeks.

Mason also announced that he and his wife will be moving to San Francisco, and he’ll also be working at Y Combinator advising startups one day a week. We can’t wait for that album to drop, though. Can’t. Wait.

]]> http://www.webpronews.com/ex-groupon-ceo-andrew-mason-made-an-album-of-motivational-business-music-thats-dropping-in-a-few-weeks-2013-05/feed 0 That Groupon POS App Is Really The New Breadcrumb POS http://www.webpronews.com/that-groupon-pos-app-is-really-the-new-breadcrumb-pos-2013-05 http://www.webpronews.com/that-groupon-pos-app-is-really-the-new-breadcrumb-pos-2013-05#comments Tue, 14 May 2013 14:30:35 +0000 Chris Crum http://www.webpronews.com/?p=229805 On Monday, news came out that Groupon had a new POS app for the iPad available in the App Store. Well, it turns out there’s a little more to the story than that.

“What happened was that a limited beta version of the app that we’re announcing today slipped out into the store for a short period and was quickly taken down,” a spokesperson for the company tells WebProNews.

The official announcement is now out, and it’s really the new Breadcrumb POS. It’s a free iPad app for eateries, salons, spas and retail merchants to “replace their outdated cash registers”.

“Breadcrumb POS expands the number of merchants currently served by the company’s Breadcrumb family of POS products from restaurants and bars to include all brick-and-mortar businesses,” the company says.

“With this launch we can help every local business replace their outdated cash registers with a modern, affordable, money-saving tool that allows them to save on credit card transaction fees and run their businesses better,” said Mihir Shah, VP Merchant OS at Groupon. “The successful adoption of Breadcrumb Pro by restaurants and bars has been very encouraging, with some of the finest venues in the country using it to run their businesses. As a result, we decided to launch Breadcrumb POS and bring the power and simplicity of this product to more merchants.”

Rates are 1.8 percent plus $0.15 per transaction (MasterCard, Visa and Discover) with no hidden costs or monthly fees. Processing is free on the first $5,000 in credit card transactions (promotional offer).

More on the offering here.

]]> http://www.webpronews.com/that-groupon-pos-app-is-really-the-new-breadcrumb-pos-2013-05/feed 0 Groupon POS For iPad Launched In App Store [Updated] http://www.webpronews.com/groupon-pos-for-ipad-launched-in-app-store-2013-05 http://www.webpronews.com/groupon-pos-for-ipad-launched-in-app-store-2013-05#comments Mon, 13 May 2013 14:09:57 +0000 Chris Crum http://www.webpronews.com/?p=229508 Update: This was just an unintentional leak. Here’s what Groupon has really released.

Groupon has released a new POS solution for the iPad. The app, which can be found in the App Store, is described as “a beautiful and simple way to manage your business and accept payments at the lowest rates available today.”

Groupon has not put out any official announcements about the product so far, but one is likely on the way. Appsfire tweeted about the app, which was then picked up by TechCrunch and other outlets:


On the Groupon POS app page, Groupon describes it:

Setup your offerings in seconds, quickly check out customers, and view real time analytics. Start running your business more effectively.

Groupon POS works also works with an optional cash drawer and printer to automate and simplify your point of sale.

Groupon POS works for a wide variety of merchants from cafes and delis, to salons, spas, and florists.

Here are screen shots from the App Store:

Groupon POS

Groupon POS

The app appears to build off Breadcrumb, the POS app Groupon acquired last year, and has since been improving.

Groupon reported its Q1 earnings last weekend, beating Wall Street expectations for revenue.

]]> http://www.webpronews.com/groupon-pos-for-ipad-launched-in-app-store-2013-05/feed 0 Groupon Earnings Beat Expectations, Stock On The Rise http://www.webpronews.com/groupon-earnings-beat-expectations-stock-on-the-rise-2013-05 http://www.webpronews.com/groupon-earnings-beat-expectations-stock-on-the-rise-2013-05#comments Wed, 08 May 2013 20:29:55 +0000 Chris Crum http://www.webpronews.com/?p=228985 Groupon just released its first earnings report since CEO Andrew Mason was fired. Unlike last time, Groupon actually beat Wall Street expectations this time, and the stock is currently on the rise.

The company reported gross billings of $1.41 billion, revenue of $601.4 million, and GAAP operating income of $21.2 million.

Active customers are up 13% year-over-year.

Eric Lefkofsky, Chairman and co-CEO, said, “We are encouraged by our results, as our local revenues accelerated and our margins improved over the prior quarter. We had record mobile performance as 45% of our North American transactions came from mobile in March, and more than 7 million people downloaded our apps in the quarter.”

Meanwhile the hunt for Mason’s replacement continues.

Here’s the earnings report in its entirety:

CHICAGO–(BUSINESS WIRE)–Groupon, Inc. (NASDAQ: GRPN) today announced financial results for the quarter ended March 31, 2013:

“Management’s Discussion and Analysis of Financial Condition and Results of Operations”

  • Gross billings of $1.41 billion
  • Revenue of $601.4 million
  • GAAP operating income of $21.2 million, or $51.2 million excluding stock compensation
  • GAAP loss per share of $0.01, or earnings per share of $0.03 excluding stock compensation

“We are encouraged by our results, as our local revenues accelerated and our margins improved over the prior quarter,” said Eric Lefkofsky, Chairman and co-CEO of Groupon. “We had record mobile performance as 45% of our North American transactions came from mobile in March, and more than 7 million people downloaded our apps in the quarter.”

First Quarter 2013 Summary

Gross billings, which reflect the total dollar value of customer purchases of goods and services, excluding any applicable taxes and net of estimated refunds, increased 4% to $1.41 billion in the first quarter 2013, compared with $1.35 billion in the first quarter 2012. North America growth of 23% was offset by a decline of 9% in the International segment on a year-over-year basis.

Revenue increased 8% to $601.4 million in the first quarter 2013, compared with $559.3 million in the first quarter 2012. North America revenue growth of 42% was offset by a decline of 18% in the International segment on a year-over-year basis.

Gross profit was $379.0 million in the first quarter 2013, compared with $439.8 million in the first quarter 2012.

Operating income was $21.2 million in the first quarter 2013, compared with $39.6 million in the first quarter 2012. Operating income increased $34.0 million compared with fourth quarter 2012.

Operating income excluding stock compensation and acquisition-related costs, a non-GAAP financial measure, was $51.2 million in the first quarter 2013, compared with $67.6 million in the first quarter 2012. Operating income excluding stock compensation and acquisition-related costs increased $37.4 million compared with fourth quarter 2012.

First quarter 2013 net loss attributable to common stockholders was $4.0 million, or $0.01 per share, including stock compensation and acquisition-related costs of $30.0 million, or $20.9 million net of tax. Earnings per share excluding stock compensation and acquisition-related costs, net of tax, a non-GAAP financial measure, was $0.03 per share.

Operating cash flow for the trailing twelve months ended March 31, 2013 was $191.9 million. Free cash flow, a non-GAAP financial measure, was negative $5.7 million in the first quarter 2013, bringing free cash flow for the trailing twelve months ended March 31, 2013 to $94.7 million.

At the end of the quarter, Groupon had $1.2 billion in cash and cash equivalents.

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

First Quarter Operating Highlights

  • Global units: Consolidated units, defined as vouchers and products ordered before cancellations and refunds, increased 4% year-over-year to 45 million. North America units increased 37%, and International units decreased 18%.
  • Active deals: As of March 31, 2013, the number of active deals in North America increased to nearly 40,000, compared with nearly 37,000 at the end of the fourth quarter 2012.
  • Active customers: Active customers, or customers that have purchased a Groupon within the last twelve months, grew 13% year-over-year, to 41.7 million as of March 31, 2013, comprising 18.2 million in North America, and 23.5 million in International.
  • Customer spend: Trailing twelve month billings per average active customer decreased to $138 from $144 in the fourth quarter 2012, related primarily to seasonal strength in the fourth quarter holiday period.
  • Mobile: In March 2013, 45% of North American transactions were completed on mobile devices, compared with nearly 30% in March 2012. In the first quarter 2013, more than 7 million people downloaded Groupon mobile apps worldwide.
  • Marketplace: The rollout of Groupon’s marketplace (”Pull”) continued to gain momentum, as email accounted for less than 45% of North American transactions in the first quarter 2013.

Outlook

Groupon anticipates incremental investments of between $15 million and $30 million in customer incentives and marketing in the second quarter 2013. As a result, for the second quarter 2013, revenue is expected to be between $575 million and $625 million, and operating income excluding stock compensation and acquisition-related expenses is expected to be between $20 million and $40 million. Stock compensation is expected to be approximately $30 million, and tax expense is expected to be approximately $25 million. This outlook assumes no acquisitions or investments, or material changes in foreign exchange rates.

Groupon reaffirms its guidance that full year 2013 GAAP operating income will exceed $100 million.

Conference Call

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

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, operating income (loss) excluding stock-based compensation and acquisition-related expense (benefit), net, Adjusted EBITDA, earnings per share excluding stock-based compensation and acquisition-related expense (benefit), net, and free cash flow. 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 represents the change in the fair value of contingent consideration arrangements related to business combinations. 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 because it is 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 period.

Operating income (loss) excluding stock-based compensation and acquisition-related expense (benefit), net is a non-GAAP financial measure that comprises the consolidated total of the segment operating income (loss) of our two segments, North America and International. We use consolidated operating income (loss) excluding stock-based compensation and acquisition-related expense (benefit), net to allocate resources and evaluate performance internally.

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. Adjusted EBITDA is similar to Operating income (loss) excluding stock-based compensation and acquisition-related expense (benefit), net, except Adjusted EBITDA also excludes depreciation and amortization. Our definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. We believe that Adjusted EBITDA is a meaningful measure for evaluating our operating performance and liquidity.

Earnings per share excluding stock-based compensation 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, acquisition-related expense (benefit), net and the income tax effect of those items. We believe that this non-GAAP financial measure provides meaningful supplemental information for evaluating our operating performance.

Free cash flow is a non-GAAP financial measure that comprises net cash provided by 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 or the future are forward-looking statements that involve a number of risks and uncertainties, and actual results could differ materially from those discussed. The risks and uncertainties that could cause our results to differ materially from those included in the forward-looking statements include, but are not limited to, volatility in our revenue and operating results; risks related to our business strategy; responding to changes in the market; effectively dealing with challenges arising from our international operations; retaining existing customers and adding new customers; retaining existing merchant partners and adding new merchant partners; incurring expenses as we expand our business; competing against competitors with more financial resources than us; maintaining favorable terms with our business partners; maintaining a strong brand; managing inventory and order fulfillment; 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; security breaches; protecting our intellectual property; handling acquisitions, joint ventures and strategic investments effectively; seasonality; payment-related risks; customer and merchant partner fraud; global economic uncertainty; compliance with rules and regulations associated with being a public company; and our ability to raise capital if necessary. We urge you to refer to the factors included under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, copies of which may be obtained by visiting the company’s Investor Relations web site at http://investor.groupon.com or the SEC’s web site at www.sec.gov. Groupon’s actual results could differ materially from those predicted or implied and reported results should not be considered an indication of future performance.

You should not rely upon forward-looking statements as predictions of future events. Although Groupon believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither the company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. The forward-looking statements reflect Groupon’s expectations as of May 8, 2013. 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.

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.

About Groupon

Groupon (NASDAQ: GRPN) is a global leader in local commerce, making it easy for people around the world to search and discover great businesses at unbeatable prices. Groupon is reinventing the traditional small business world by providing merchants with a suite of products and services, including customizable deals, payments processing capabilities and point-of-sale solutions to help them attract more customers and run their operations more effectively. By leveraging the company’s global relationships and scale, Groupon offers consumers incredible deals on the best stuff to eat, see, do, and buy in 48 countries. With Groupon, shoppers discover the best a city has to offer with Groupon Local, enjoy vacations with GrouponGetaways, and find a curated selection of electronics, fashion, home furnishings and more with Groupon Goods. To subscribe to Groupon emails, visit www.Groupon.com. 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 
March 31,		 Y/Y %

Growth
2013 2012 Y/Y %
Growth		 FX Effect (2) excluding
FX(2)
Gross Billings (1)
North America $ 681,319 $ 553,557 23.1 % $ (59 ) 23.1 %
International 726,450 801,243 (9.3 ) % (12,460 ) (7.8 ) %
Consolidated gross billings $ 1,407,769 $ 1,354,800 3.9 % $ (12,519 ) 4.8 %
Revenue
North America $ 339,554 $ 238,565 42.3 % $ (27 ) 42.3 %
International 261,848 320,718 (18.4 ) % (4,540 ) (16.9 ) %
Consolidated revenue $ 601,402 $ 559,283 7.5 % $ (4,567 ) 8.3 %
Income from operations $ 21,178 $ 39,639 (46.6 ) % $ 2,377 (52.6 ) %
Net loss attributable to common stockholders $ (3,992 ) $ (11,695 ) 65.9 % $ 2,614 43.5 %
Net loss per share
Basic $ (0.01 ) $ (0.02 )
Diluted $ (0.01 ) $ (0.02 )
Weighted average basic shares outstanding 658,800,417 644,097,375
Weighted average diluted shares outstanding 658,800,417 644,097,375
(1) Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds. Includes direct billings and third party and other billings.
(2) Represents change in financial measures that would have resulted had average exchange rates in the reporting period been the same as those in effect during the three months ended March 31, 2012.
Groupon, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended 

March 31,
2013 2012
Operating activities
Net loss $ (3,242 ) $ (3,593 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 20,700 11,716
Stock-based compensation 29,907 28,003
Deferred income taxes (258 ) (876 )
Excess tax benefits on stock-based compensation (832 ) (2,881 )
Loss on equity method investments 19 5,128
Acquisition-related expense (benefit), net 68 (52 )
Change in assets and liabilities, net of acquisitions:
Restricted cash 2,523 (1,357 )
Accounts receivable (7,684 ) (11,878 )
Prepaid expenses and other current assets 12,527 (4,121 )
Accounts payable (19,606 ) (1,821 )
Accrued merchant and supplier payables (39,417 ) 46,000
Accrued expenses and other current liabilities 13,302 13,420
Other, net 753 6,026
Net cash provided by operating activities 8,760 83,714
Net cash used in investing activities (30,679 ) (46,444 )
Net cash used in financing activities (9,342 ) (8,275 )
Effect of exchange rate changes on cash and cash equivalents (12,378 ) 9,059
Net (decrease) increase in cash and cash equivalents (43,639 ) 38,054
Cash and cash equivalents, beginning of period 1,209,289 1,122,935
Cash and cash equivalents, end of period $ 1,165,650 $ 1,160,989
Groupon, Inc.
Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)
Three Months Ended March 31,
2013 2012
Revenue:
Third party and other $ 439,108 $ 540,053
Direct 162,294 19,230
Total revenue 601,402 559,283
Cost of revenue:
Third party and other 70,016 102,629
Direct 152,377 16,869
Total cost of revenue 222,393 119,498
Gross Profit 379,009 439,785
Operating expenses:
Marketing 49,557 116,615
Selling, general and administrative 308,206 283,583
Acquisition-related expense (benefit), net 68 (52 )
Total operating expenses 357,831 400,146
Income from operations 21,178 39,639
Interest and other expense, net (5,064 ) (3,539 )
Loss on equity method investments (19 ) (5,128 )
Income before provision for income taxes 16,095 30,972
Provision for income taxes 19,337 34,565
Net loss (3,242 ) (3,593 )
Less: Net income attributable to noncontrolling interests (750 ) (880 )
Net loss attributable to Groupon, Inc. (3,992 ) (4,473 )
Adjustment of redeemable noncontrolling interests to redemption value - (7,222 )
Net loss attributable to common stockholders $ (3,992 ) $ (11,695 )
Net loss per share
Basic $ (0.01 ) $ (0.02 )
Diluted $ (0.01 ) $ (0.02 )
Weighted average number of shares outstanding
Basic 658,800,417 644,097,375
Diluted 658,800,417 644,097,375
Groupon, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(unaudited)
March 31, December 31,
2013 2012
Assets
Current assets:
Cash and cash equivalents $ 1,165,650 $ 1,209,289
Accounts receivable, net 102,717 96,713
Deferred income taxes 30,679 31,211
Prepaid expenses and other current assets 132,324 150,573
Total current assets 1,431,370 1,487,786
Property, equipment and software, net of accumulated depreciation and amortization of $60,291 and $46,236, respectively 128,773 121,072
Goodwill 205,466 206,684
Intangible assets, net 36,838 42,597
Investments 97,245 84,209
Deferred income taxes, non-current 29,710 29,916
Other non-current assets 52,855 59,210
Total Assets $ 1,982,257 $ 2,031,474
Liabilities and Equity
Current liabilities:
Accounts payable $ 40,898 $ 59,865
Accrued merchant and supplier payables 620,485 671,305
Accrued expenses 245,889 246,924
Deferred income taxes 52,875 53,700
Other current liabilities 140,433 136,647
Total current liabilities 1,100,580 1,168,441
Deferred income taxes, non-current 19,917 20,860
Other non-current liabilities 97,791 100,072
Total Liabilities 1,218,288 1,289,373
Commitments and contingencies
Stockholders’ Equity
Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized, 657,774,882 and 654,523,706 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively 66 65
Class B common stock, par value $0.0001 per share, 10,000,000 shares authorized, 2,399,976 shares issued and outstanding at March 31, 2013 and December 31, 2012 - -
Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized, no shares issued and outstanding at March 31, 2013, and December 31, 2012 - -
Additional paid-in capital 1,508,972 1,485,006
Accumulated deficit (757,469 ) (753,477 )
Accumulated other comprehensive income 14,787 12,446
Total Groupon, Inc. Stockholders’ Equity 766,356 744,040
Noncontrolling interests (2,387 ) (1,939 )
Total Equity 763,969 742,101
Total Liabilities and Equity $ 1,982,257 $ 2,031,474
Groupon, Inc.
Segment Information
(in thousands)
(unaudited)
Three Months Ended March 31,
2013 2012
North America
Gross Billings (1) $ 681,319 $ 553,557
Revenue $ 339,554 $ 238,565
Segment cost of revenue and operating expenses(2) 298,188 198,393
Segment operating income $ 41,366 $ 40,172
Segment operating income as a percent of segment revenue 12.2 % 16.8 %
International
Gross Billings (1) $ 726,450 $ 801,243
Revenue $ 261,848 $ 320,718
Segment cost of revenue and operating expenses(2) 252,061 293,300
Segment operating income $ 9,787 $ 27,418
Segment operating income as a percent of segment revenue 3.7 % 8.5 %
Consolidated
Gross Billings (1) $ 1,407,769 $ 1,354,800
Revenue $ 601,402 $ 559,283
Segment cost of revenue and operating expenses(2) 550,249 491,693
Segment operating income $ 51,153 $ 67,590
Segment operating income as a percent of segment revenue 8.5 % 12.1 %
Stock-based compensation 29,907 28,003
Acquisition-related expense (benefit), net 68 (52 )
Income from operations 21,178 39,639
Interest and other expense, net 5,064 3,539
Loss on equity method investments 19 5,128
Income before provision for income taxes 16,095 30,972
Provision for income taxes 19,337 34,565
Net loss $ (3,242 ) $ (3,593 )
(1) Represents the total dollar value of customer purchases of goods and services, excluding any applicable taxes and net of estimated refunds. Includes direct billings and third party and other billings.
(2) Represents cost of revenue and operating expenses, excluding stock-based compensation and acquisition-related expense (benefit), net.
Groupon, Inc.
Non-GAAP Reconciliation Schedules
(in thousands, except share and per share amounts)
(unaudited)
The following are reconciliations of earnings per share excluding stock-based compensation and acquisition-related expense (benefit), net and foreign exchange rate neutral operating results to the most comparable U.S. GAAP financial measures. See “Supplemental Financial Information and Business Metrics” for reconciliations of Adjusted EBITDA, operating income (loss), excluding stock-based compensation and acquisition-related benefit (expense), net and free cash flow to the most comparable U.S. GAAP financial measures.
The following is a reconciliation of net loss per share to earnings per share excluding stock-based compensation and acquisition-related expense, net for the three months ended March 31, 2013:
Three Months Ended
March 31, 2013
Net loss attributable to common stockholders $ (3,992 )
Stock-based compensation 29,907
Acquisition-related expense, net 68
Income tax effect of adjustments (9,113 )
Net income attributable to common stockholders excluding stock-based
compensation and acquisition-related expense, net $ 16,870
Diluted shares 658,800,417
Incremental diluted shares (1) 12,175,734
Adjusted diluted shares 670,976,151
Diluted net loss per share $ (0.01 )
Impact of stock-based compensation and acquisition-related
expense, net and the related income tax effects 0.04
Diluted earnings per share excluding stock-based compensation and
acquisition-related expense, net $ 0.03
(1) Outstanding equity awards are not reflected in the diluted loss per share calculation for the three months ended March 31, 2013 because the effect would be antidilutive. However, those awards have been reflected in the calculation of diluted earnings per share excluding stock-based compensation and acquisition-related expense, net for the three months ended March 31, 2013 because they have a dilutive effect on that calculation.
The following is a reconciliation of foreign exchange rate neutral operating results to the most comparable U.S. GAAP financial measures, “Gross Billings,” “Revenue” and “Income from operations,” for the three months ended March 31, 2013. The effect on the Company’s gross billings, revenue and income from operations from changes in exchange rates versus the U.S. Dollar for the three months ended March 31, 2013 was as follows:
Three Months Ended March 31, 2013 Three Months Ended March 31, 2013
At Avg. Exchange At Avg. Exchange
Q1 2012
Rates (1)		 Rate
Effect (2)		 As
Reported		 Q4 2012
Rates (3)		 Rate
Effect (2)		 As
Reported
Gross billings $ 1,420,288 $ (12,519 ) $ 1,407,769 $ 1,408,597 $ (828 ) $ 1,407,769
Revenue $ 605,969 $ (4,567 ) $ 601,402 $ 601,584 $ (182 ) $ 601,402
Income from operations $ 18,801 $ 2,377 $ 21,178 $ 21,698 $ (520 ) $ 21,178
(1) Represents the outcome that would have resulted had average exchange rates in the reported period been the same as those in effect during the three months ended March 31, 2012.
(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 outcome that would have resulted had average exchange rates in the reported period been the same as those in effect during the three months ended December 31, 2012.
Groupon, Inc.
Supplemental Financial Information and Business Metrics(13)
(financial data in thousands, except per share data; active customers in millions)
(unaudited)
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013
Segments
North America Segment
Gross Billings (1)
Local (2) Gross Billings
Third Party and Other $ 424,124 $ 412,348 $ 349,293 $ 430,255 $ 450,140
Direct 5,299 288 6,450 - -
Total Local Gross Billings $ 429,423 $ 412,636 $ 355,743 $ 430,255 $ 450,140
Goods Gross Billings
Third Party and Other $ 75,908 $ 40,173 $ 25,508 $ 31,270 $ 17,294
Direct 2,282 52,773 126,608 209,575 148,065
Total Goods Gross Billings $ 78,190 $ 92,946 $ 152,116 $ 240,845 $ 165,359
Travel and Other Gross Billings
Third Party and Other $ 45,944 $ 42,693 $ 44,510 $ 47,852 $ 65,820
Direct - - - - -
Total Travel and Other Gross Billings $ 45,944 $ 42,693 $ 44,510 $ 47,852 $ 65,820
Total Gross Billings
Third Party and Other $ 545,976 $ 495,214 $ 419,311 $ 509,377 $ 533,254
Direct 7,581 53,061 133,058 209,575 148,065
Total Gross Billings $ 553,557 $ 548,275 $ 552,369 $ 718,952 $ 681,319
Year-over-year growth 76 % 48 % 38 % 51 % 23 %
% of Consolidated Gross Billings 41 % 43 % 45 % 47 % 48 %
Gross Billings Trailing Twelve Months (TTM) $ 1,800,332 $ 1,978,617 $ 2,130,008 $ 2,373,153 $ 2,500,915
Revenue (3)
Local Revenue
Third Party and Other $ 191,128 $ 184,189 $ 134,993 $ 142,454 $ 171,593
Direct 5,299 288 6,450 - -
Total Local Revenue $ 196,427 $ 184,477 $ 141,443 $ 142,454 $ 171,593
Goods Revenue
Third Party and Other $ 24,941 $ 10,387 $ 13,064 $ 11,877 $ 3,144
Direct 2,282 52,774 126,608 209,575 148,065
Total Goods Revenue $ 27,223 $ 63,161 $ 139,672 $ 221,452 $ 151,209
Travel and Other Revenue
Third Party and Other $ 14,915 $ 12,543 $ 10,488 $ 11,445 $ 16,752
Direct - - - - -
Total Travel and Other Revenue $ 14,915 $ 12,543 $ 10,488 $ 11,445 $ 16,752
Total Revenue
Third Party and Other $ 230,984 $ 207,119 $ 158,545 $ 165,776 $ 191,489
Direct 7,581 53,062 133,058 209,575 148,065
Total Revenue $ 238,565 $ 260,181 $ 291,603 $ 375,351 $ 339,554
Year-over-year growth 75 % 66 % 81 % 109 % 42 %
% of Consolidated Revenue 43 % 46 % 51 % 59 % 56 %
Revenue TTM $ 736,933 $ 839,909 $ 969,987 $ 1,165,700 $ 1,266,689
Cost of Revenue (4)
Local Cost of Revenue
Third Party and Other $ 51,782 $ 35,710 $ 13,176 $ 23,203 $ 25,915
Direct 4,663 234 5,231 - -
Total Local Cost of Revenue $ 56,445 $ 35,944 $ 18,407 $ 23,203 $ 25,915
Goods Cost of Revenue
Third Party and Other $ 6,757 $ 2,014 $ 1,275 $ 1,935 $ 475
Direct 2,008 45,925 110,329 196,789 138,278
Total Goods Cost of Revenue $ 8,765 $ 47,939 $ 111,604 $ 198,724 $ 138,753
Travel and Other Cost of Revenue
Third Party and Other $ 4,041 $ 2,431 $ 1,024 $ 1,864 $ 2,530
Direct - - - - -
Total Travel and Other Cost of Revenue $ 4,041 $ 2,431 $ 1,024 $ 1,864 $ 2,530
Total Cost of Revenue
Third Party and Other $ 62,580 $ 40,155 $ 15,475 $ 27,002 $ 28,920
Direct 6,671 46,159 115,560 196,789 138,278
Total Cost of Revenue $ 69,251 $ 86,314 $ 131,035 $ 223,791 $ 167,198
% of North America Total Revenue 29 % 33 % 45 % 60 % 49 %
Gross Profit
Local Gross Profit
Third Party and Other $ 139,346 $ 148,479 $ 121,817 $ 119,251 $ 145,678
Direct 636 54 1,219 - -
Total Local Gross Profit $ 139,982 $ 148,533 $ 123,036 $ 119,251 $ 145,678
% of North America Total Local Revenue 71.3 % % 80.5 % % 87.0 % % 83.7 % % 84.9 % %
% of North America Total Local Gross Billings 32.6 % % 36.0 % % 34.6 % % 27.7 % % 32.4 % %
Goods Gross Profit
Third Party and Other $ 18,184 $ 8,373 $ 11,789 $ 9,942 $ 2,669
Direct 274 6,849 16,279 12,786 9,787
Total Goods Gross Profit $ 18,458 $ 15,222 $ 28,068 $ 22,728 $ 12,456
% of North America Total Goods Revenue 67.8 % % 24.1 % % 20.1 % % 10.3 % % 8.2 % %
% of North America Total Goods Gross Billings 23.6 % % 16.4 % % 18.5 % % 9.4 % % 7.5 % %
Travel and Other Gross Profit
Third Party and Other $ 10,874 $ 10,112 $ 9,464 $ 9,581 $ 14,222
Direct - - - - -
Total Travel and Other Gross Profit $ 10,874 $ 10,112 $ 9,464 $ 9,581 $ 14,222
% of North America Total Travel and Other Revenue 72.9 % % 80.6 % % 90.2 % % 83.7 % % 84.9 % %
% of North America Total Travel and Other Gross Billings 23.7 % % 23.7 % % 21.3 % % 20.0 % % 21.6 % %
Total Gross Profit
Third Party and Other $ 168,404 $ 166,964 $ 143,070 $ 138,774 $ 162,569
Direct 910 6,903 17,498 12,786 9,787
Total Gross Profit $ 169,314 $ 173,867 $ 160,568 $ 151,560 $ 172,356
% of North America Total Revenue 71.0 % % 66.8 % % 55.1 % % 40.4 % % 50.8 % %
% of North America Total Gross Billings 30.6 % % 31.7 % % 29.1 % % 21.1 % % 25.3 % %
Operating Income Excl Stock-Based Compensation (SBC), Acquisition-Related Expenses $ 40,172 $ 43,429 $ 39,093 $ 17,032 $ 41,366
Year-over-year growth N/A N/A 108 % (7 ) % 3 %
% of Consolidated Operating Income Excl SBC, Acq-Related 59 % 60 % 77 % 124 % 81 %
Operating Margin Excl SBC, Acq-Related (% of North America Total revenue) 16.8 % 16.7 % 13.4 % 4.5 % 12.2 %
Year-over-year growth (bps) 3,278 2,337 170 (570 ) (460 )
Operating Income TTM Excl SBC, Acq-Related $ 66,746 $ 120,676 $ 140,933 $ 139,726 $ 140,920
Operating Margin TTM Excl SBC, Acq-Related (% of North America Total TTM revenue) 9.1 % 14.4 % 14.5 % 12.0 % 11.1 %
Year-over-year growth (bps) 2,197 2,601 2,100 1,120 200
International Segment Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013
Gross Billings
Local Gross Billings
Third Party and Other $ 465,879 $ 423,313 $ 328,044 $ 368,898 $ 379,413
Direct - - - - -
Total Local Gross Billings $ 465,879 $ 423,313 $ 328,044 $ 368,898 $ 379,413
Goods Gross Billings
Third Party and Other $ 199,988 $ 186,899 $ 211,464 $ 285,057 $ 212,736
Direct 7,396 12,288 11,930 15,601 14,229
Total Goods Gross Billings $ 207,384 $ 199,187 $ 223,394 $ 300,658 $ 226,965
Travel and Other Gross Billings
Third Party and Other $ 123,727 $ 115,901 $ 114,449 $ 131,944 $ 120,072
Direct 4,253 - - - -
Total Travel and Other Gross Billings $ 127,980 $ 115,901 $ 114,449 $ 131,944 $ 120,072
Total Gross Billings
Third Party and Other $ 789,594 $ 726,113 $ 653,957 $ 785,899 $ 712,221
Direct 11,649 12,288 11,930 15,601 14,229
Total Gross Billings $ 801,243 $ 738,401 $ 665,887 $ 801,500 $ 726,450
Year-over-year growth 127 % 32 % (12 ) % 6 % (9 ) %
Year-over-year growth, excluding FX (5) 138 % 45 % (4 ) % 9 % (8 ) %
% of Consolidated Gross Billings 59 % 57 % 55 % 53 % 52 %
Gross Billings TTM $ 2,871,795 $ 3,050,937 $ 2,960,592 $ 3,007,031 $ 2,932,238
Revenue
Local Revenue
Third Party and Other $ 213,166 $ 193,861 $ 164,184 $ 144,834 $ 155,800
Direct - - - - -
Total Local Revenue $ 213,166 $ 193,861 $ 164,184 $ 144,834 $ 155,800
Goods Revenue
Third Party and Other $ 60,365 $ 67,864 $ 71,310 $ 74,702 $ 63,937
Direct 7,396 12,288 11,930 15,600 14,229
Total Goods Revenue $ 67,761 $ 80,152 $ 83,240 $ 90,302 $ 78,166
Travel and Other Revenue
Third Party and Other $ 35,538 $ 34,141 $ 29,525 $ 27,815 $ 27,882
Direct 4,253 - - - -
Total Travel and Other Revenue $ 39,791 $ 34,141 $ 29,525 $ 27,815 $ 27,882
Total Revenue
Third Party and Other $ 309,069 $ 295,866 $ 265,019 $ 247,351 $ 247,619
Direct 11,649 12,288 11,930 15,600 14,229
Total Revenue $ 320,718 $ 308,154 $ 276,949 $ 262,951 $ 261,848
Year-over-year growth 102 % 31 % 3 % (16 ) % (18 ) %
Year-over-year growth, excluding FX 112 % 44 % 13 % (14 ) % (17 ) %
% of Consolidated Revenue 57 % 54 % 49 % 41 % 44 %
Revenue TTM $ 1,137,257 $ 1,210,034 $ 1,218,347 $ 1,168,772 $ 1,109,902
Cost of Revenue
Local Cost of Revenue
Third Party and Other $ 27,622 $ 24,162 $ 23,729 $ 20,423 $ 20,115
Direct - - - - -
Total Local Cost of Revenue $ 27,622 $ 24,162 $ 23,729 $ 20,423 $ 20,115
Goods Cost of Revenue
Third Party and Other $ 7,822 $ 8,459 $ 10,702 $ 12,558 $ 17,381
Direct 6,474 11,993 12,053 21,778 14,099
Total Goods Cost of Revenue $ 14,296 $ 20,452 $ 22,755 $ 34,336 $ 31,480
Travel and Other Cost of Revenue
Third Party and Other $ 4,605 $ 4,256 $ 4,267 $ 3,922 $ 3,600
Direct 3,724 - - - -
Total Travel and Other Cost of Revenue $ 8,329 $ 4,256 $ 4,267 $ 3,922 $ 3,600
Total Cost of Revenue
Third Party and Other $ 40,049 $ 36,877 $ 38,698 $ 36,903 $ 41,096
Direct 10,198 11,993 12,053 21,778 14,099
Total Cost of Revenue $ 50,247 $ 48,870 $ 50,751 $ 58,681 $ 55,195
% of International Total Revenue 16 % 16 % 18 % 22 % 21 %
Gross Profit
Local Gross Profit
Third Party and Other $ 185,544 $ 169,699 $ 140,455 $ 124,411 $ 135,685
Direct - - - - -
Total Local Gross Profit $ 185,544 $ 169,699 $ 140,455 $ 124,411 $ 135,685
% of International Total Local Revenue 87.0 % % 87.5 % % 85.5 % % 85.9 % % 87.1 % %
% of International Total Local Gross Billings 39.8 % % 40.1 % % 42.8 % % 33.7 % % 35.8 % %
Goods Gross Profit
Third Party and Other $ 52,543 $ 59,405 $ 60,608 $ 62,144 $ 46,556
Direct 922 295 (123 ) (6,178 ) 130
Total Goods Gross Profit $ 53,465 $ 59,700 $ 60,485 $ 55,966 $ 46,686
% of International Total Goods Revenue 78.9 % % 74.5 % % 72.7 % % 62.0 % % 59.7 % %
% of International Total Goods Gross Billings 25.8 % % 30.0 % % 27.1 % % 18.6 % % 20.6 % %
Travel and Other Gross Profit
Third Party and Other $ 30,933 $ 29,885 $ 25,258 $ 23,893 $ 24,282
Direct 529 - - - -
Total Travel and Other Gross Profit $ 31,462 $ 29,885 $ 25,258 $ 23,893 $ 24,282
% of International Total Travel and Other Revenue 79.1 % % 87.5 % % 85.5 % % 85.9 % % 87.1 % %
% of International Total Travel and Other Gross Billings 24.6 % % 25.8 % % 22.1 % % 18.1 % % 20.2 % %
Total Gross Profit
Third Party and Other $ 269,020 $ 258,989 $ 226,321 $ 210,448 $ 206,523
Direct 1,451 295 (123 ) (6,178 ) 130
Total Gross Profit $ 270,471 $ 259,284 $ 226,198 $ 204,270 $ 206,653
% of International Total Revenue 84.3 % % 84.1 % % 81.7 % % 77.7 % % 78.9 % %
% of International Total Gross Billings 33.8 % % 35.1 % % 34.0 % % 25.5 % % 28.4 % %
Operating Income (Loss) Excl SBC, Acq-Related $ 27,418 $ 28,505 $ 11,395 $ (3,329 ) $ 9,787
Year-over-year growth N/A 155 N/A (1,060 ) % (64 ) %
% of Consolidated Operating Income Excl SBC, Acq-Related 41 % 40 % 23 % (24 ) % 19 %
Operating Margin Excl SBC, Acq-Related (% of International Total revenue) 8.5 % 9.3 % 4.1 % (1.3 ) % 3.7 %
Year-over-year growth (bps) 5,669 3,126 1,170 (120 ) (480 )
Operating (Loss) Income TTM Excl SBC, Acq-Related $ (45,205 ) $ 35,108 $ 67,031 $ 63,989 $ 46,358
Operating Margin TTM Excl SBC, Acq-Related (% of International Total TTM revenue) (4.0 ) % 2.9 % 5.5 % 5.5 % 4.2 %
Year-over-year growth (bps) 8,704 5,765 4,170 2,080 820
Consolidated Results of Operations Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013
Gross Billings
Local Gross Billings
Third Party and Other $ 890,003 $ 835,661 $ 677,337 $ 799,153 $ 829,533
Direct 5,299 288 6,450 - -
Total Local Gross Billings $ 895,302 $ 835,949 $ 683,787 $ 799,153 $ 829,533
Goods Gross Billings
Third Party and Other $ 275,896 $ 227,072 $ 236,972 $ 316,327 $ 230,030
Direct 9,678 65,061 138,538 225,176 162,294
Total Goods Gross Billings $ 285,574 $ 292,133 $ 375,510 $ 541,503 $ 392,324
Travel and Other Gross Billings
Third Party and Other $ 169,671 $ 158,594 $ 158,959 $ 179,796 $ 185,892
Direct 4,253 - - - -
Total Travel and Other Gross Billings $ 173,924 $ 158,594 $ 158,959 $ 179,796 $ 185,892
Total Gross Billings
Third Party and Other $ 1,335,570 $ 1,221,327 $ 1,073,268 $ 1,295,276 $ 1,245,475
Direct 19,230 65,349 144,988 225,176 162,294
Total Gross Billings $ 1,354,800 $ 1,286,676 $ 1,218,256 $ 1,520,452 $ 1,407,769
Year-over-year growth 103 % 38 % 5 % 24 % 4 %
Year-over-year growth, excluding FX 108 % 47 % 11 % 25 % 5 %
Gross Billings (TTM) $ 4,672,127 $ 5,029,554 $ 5,090,600 $ 5,380,184 $ 5,433,153
Year-over-year growth 241 % 128 % 61 % 35 % 16 %
Revenue
Local Revenue
Third Party and Other $ 404,294 $ 378,050 $ 299,177 $ 287,288 $ 327,393
Direct 5,299 288 6,450 - -
Total Local Revenue $ 409,593 $ 378,338 $ 305,627 $ 287,288 $ 327,393
Goods Revenue
Third Party and Other $ 85,306 $ 78,251 $ 84,374 $ 86,579 $ 67,081
Direct 9,678 65,062 138,538 225,175 162,294
Total Goods Revenue $ 94,984 $ 143,313 $ 222,912 $ 311,754 $ 229,375
Travel and Other Revenue
Third Party and Other $ 50,453 $ 46,684 $ 40,013 $ 39,260 $ 44,634
Direct 4,253 - - - -
Total Travel and Other Revenue $ 54,706 $ 46,684 $ 40,013 $ 39,260 $ 44,634
Total Revenue
Third Party and Other $ 540,053 $ 502,985 $ 423,564 $ 413,127 $ 439,108
Direct 19,230 65,350 144,988 225,175 162,294
Total Revenue $ 559,283 $ 568,335 $ 568,552 $ 638,302 $ 601,402
Year-over-year growth 89 % 45 % 32 % 30 % 8 %
Year-over-year growth, excluding FX 95 % 53 % 38 % 31 % 8 %
Total Consolidated Revenue TTM $ 1,874,190 $ 2,049,943 $ 2,188,334 $ 2,334,472 $ 2,376,591
Year-over-year growth 219 % 118 % 70 % 45 % 27 %
Cost of Revenue
Local Cost of Revenue
Third Party and Other $ 79,404 $ 59,872 $ 36,905 $ 43,626 $ 46,030
Direct 4,663 234 5,231 - -
Total Local Cost of Revenue $ 84,067 $ 60,106 $ 42,136 $ 43,626 $ 46,030
Goods Cost of Revenue
Third Party and Other $ 14,579 $ 10,473 $ 11,977 $ 14,493 $ 17,856
Direct 8,482 57,918 122,382 218,567 152,377
Total Goods Cost of Revenue $ 23,061 $ 68,391 $ 134,359 $ 233,060 $ 170,233
Travel and Other Cost of Revenue
Third Party and Other $ 8,646 $ 6,687 $ 5,291 $ 5,786 $ 6,130
Direct 3,724 - - - -
Total Travel and Other Cost of Revenue $ 12,370 $ 6,687 $ 5,291 $ 5,786 $ 6,130
Total Cost of Revenue
Third Party and Other $ 102,629 $ 77,032 $ 54,173 $ 63,905 $ 70,016
Direct 16,869 58,152 127,613 218,567 152,377
Total Cost of Revenue $ 119,498 $ 135,184 $ 181,786 $ 282,472 $ 222,393
% of Total Consolidated Revenue 21 % 24 % 32 % 44 % 37 %
Gross Profit
Local Gross Profit
Third Party and Other $ 324,890 $ 318,178 $ 262,272 $ 243,662 $ 281,363
Direct 636 54 1,219 - -
Total Local Gross Profit $ 325,526 $ 318,232 $ 263,491 $ 243,662 $ 281,363
% of Total Consolidated Local Revenue 79.5 % % 84.1 % % 86.2 % % 84.8 % % 85.9 % %
% of Total Consolidated Local Gross Billings 36.4 % % 38.1 % % 38.5 % % 30.5 % % 33.9 % %
Goods Gross Profit
Third Party and Other $ 70,727 $ 67,778 $ 72,397 $ 72,086 $ 49,225
Direct 1,196 7,144 16,156 6,608 9,917
Total Goods Gross Profit $ 71,923 $ 74,922 $ 88,553 $ 78,694 $ 59,142
% of Total Consolidated Goods Revenue 75.7 % % 52.3 % % 39.7 % % 25.2 % % 25.8 % %
% of Total Consolidated Goods Gross Billings 25.2 % % 25.6 % % 23.6 % % 14.5 % % 15.1 % %
Travel and Other Gross Profit
Third Party and Other $ 41,807 $ 39,997 $ 34,722 $ 33,474 $ 38,504
Direct 529 - - - -
Total Travel and Other Gross Profit $ 42,336 $ 39,997 $ 34,722 $ 33,474 $ 38,504
% of Total Consolidated Travel and Other Revenue 77.4 % % 85.7 % % 86.8 % % 85.3 % % 86.3 % %
% of Total Consolidated Travel and Other Gross Billings 24.3 % % 25.2 % % 21.8 % % 18.6 % % 20.7 % %
Total Gross Profit
Third Party and Other $ 437,424 $ 425,953 $ 369,391 $ 349,222 $ 369,092
Direct 2,361 7,198 17,375 6,608 9,917
Total Gross Profit $ 439,785 $ 433,151 $ 386,766 $ 355,830 $ 379,009
% of Total Consolidated Revenue 78.6 % % 76.2 % % 68.0 % % 55.7 % % 63.0 % %
% of Total Consolidated Gross Billings 32.5 % % 33.7 % % 31.7 % % 23.4 % % 26.9 % %
Operating Income Excl SBC, Acq-Related $ 67,590 $ 71,934 $ 50,488 $ 13,703 $ 51,153
Year-over-year growth N/A N/A N/A (24 ) % (24 ) %
Operating Margin Excl SBC, Acq-Related (% of Total Consolidated revenue) 12.1 % 12.7 % 8.9 % 2.1 % 8.5 %
Year-over-year growth (bps) 4,534 2,853 930 (150 ) (360 )
Operating Income TTM Excl SBC, Acq-Related $ 21,541 $ 155,784 $ 207,964 $ 203,715 $ 187,278
Operating Margin TTM Excl SBC, Acq-Related (% of Total Consolidated TTM revenue) 1.1 % 7.6 % 9.5 % 8.7 % 7.9 %
Year-over-year growth (bps) 5,011 4,229 3,320 1,770 680
Operating Income (Loss) $ 39,639 $ 46,485 $ 25,438 $ (12,861 ) $ 21,178
Year-over-year growth N/A N/A N/A 14 % (47 ) %
Operating Margin (% of Total Consolidated revenue) 7.1 % 8.2 % 4.5 % (2.0 ) % 3.5 %
Year-over-year growth (bps) 4,673 3,391 457 100 (360 )
Operating (Loss) Income TTM $ (76,599 ) $ 70,913 $ 96,590 $ 98,701 $ 80,240
Operating Margin TTM (% of Total Consolidated TTM revenue) (4.1 ) % 3.5 % 4.4 % 4.2 % 3.4 %
Year-over-year growth (bps) 8,875 6,824 4,740 1,870 750
Net (Loss) Income Attributable to Common Stockholders (11,695 ) 28,386 (2,979 ) (81,089 ) (3,992 )
Weighted Average Basic Shares Outstanding 644,097 647,150 653,224 655,678 658,800
Weighted Average Diluted Shares Outstanding (6) 644,097 663,123 653,224 655,678 658,800
Net (Loss) Earnings per Share
Basic $ (0.02 ) $ 0.04 $ (0.00 ) $ (0.12 ) $ (0.01 )
Diluted $ (0.02 ) $ 0.04 $ (0.00 ) $ (0.12 ) $ (0.01 )
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013
The following is a quarterly reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, “Net (loss) income” and a quarterly reconciliation of operating income, excluding stock-based compensation and acquisition-related benefit (expense), net, to the most comparable U.S. GAAP financial measure, “Operating income (loss).” (7)
Adjusted EBITDA $ 79,306 $ 84,744 $ 65,798 $ 29,668 $ 71,853
Depreciation and amortization (11,716 ) (12,810 ) (15,310 ) (15,965 ) (20,700 )
Operating income, excluding stock-based compensation and acquisition-related benefit (expense), net 67,590 71,934 50,488 13,703 51,153
Stock-based compensation (28,003 ) (27,084 ) (22,619 ) (26,411 ) (29,907 )
Acquisition-related benefit (expense), net 52 1,635 (2,431 ) (153 ) (68 )
Operating income (loss) 39,639 46,485 25,438 (12,861 ) 21,178
Non Operating Items
Interest and other (expense) income, net (3,539 ) 57,367 617 (48,279 ) (5,064 )
Loss on equity method investments (5,128 ) (3,428 ) (138 ) (1,231 ) (19 )
Provision for income taxes (34,565 ) (66,875 ) (26,857 ) (17,676 ) (19,337 )
Net (loss) income $ (3,593 ) $ 33,549 $ (940 ) $ (80,047 ) $ (3,242 )
The following is a trailing twelve months reconciliation of Operating income, excluding stock-based compensation and acquisition-related benefit (expense), net, to the most comparable U.S. GAAP financial measure, “Operating (loss) Income.” (7)
Operating income, excluding stock-based compensation and acquisition-related benefit (expense), net TTM $ 21,541 $ 155,784 $ 207,964 $ 203,715 $ 187,278
Stock-based compensation (102,729 ) (91,095 ) (110,374 ) (104,117 ) (106,021 )
Acquisition-related benefit (expense), net 4,589 6,224 (1,000 ) (897 ) (1,017 )
Operating (loss) income TTM $ (76,599 ) $ 70,913 $ 96,590 $ 98,701 $ 80,240
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.(8)
International Gross Billings growth, excluding FX 138 % 45 % (4 ) % 9 % (8 ) %
FX Effect (11 ) % (13 ) % (8 ) % (3 ) % (1 ) %
International Gross Billings growth 127 % 32 % (12 ) % 6 % (9 ) %
Consolidated Gross Billings growth, excluding FX 108 % 47 % 11 % 25 % 5 %
FX Effect (5 ) % (9 ) % (6 ) % (1 ) % (1 ) %
Consolidated Gross Billings growth 103 % 38 % 5 % 24 % 4 %
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.(8)
International Revenue growth, excluding FX 112 % 44 % 13 % (14 ) % (17 ) %
FX Effect (10 ) % (13 ) % (10 ) % (2 ) % (1 ) %
International Revenue growth 102 % 31 % 3 % (16 ) % (18 ) %
Consolidated Revenue growth, excluding FX 95 % 53 % 38 % 31 % 8 %
FX Effect (6 ) % (8 ) % (6 ) % (1 ) % - %
Consolidated Revenue growth 89 % 45 % 32 % 30 % 8 %
The following is a reconciliation of free cash flow to the most comparable U.S. GAAP financial measure, “Net cash provided by operating activities.”
Net cash provided by operating activities $ 83,714 $ 75,315 $ 42,088 $ 65,717 $ 8,760
Purchases of property, equipment and capitalized software (13,083 ) (26,709 ) (16,010 ) (40,034 ) (14,468 )
Free cash flow (9) $ 70,631 $ 48,606 $ 26,078 $ 25,683 $ (5,708 )
Net cash provided by operating activities (TTM) $ 356,221 $ 392,517 $ 370,194 $ 266,834 $ 191,880
Purchases of property, equipment and capitalized software (TTM) (45,932 ) (62,401 ) (69,788 ) (95,836 ) (97,221 )
Free cash flow (TTM) $ 310,289 $ 330,116 $ 300,406 $ 170,998 $ 94,659
Net cash used in investing activities $ (46,444 ) $ (60,153 ) $ (35,629 ) $ (52,753 ) $ (30,679 )
Net cash (used in) provided by financing activities $ (8,275 ) $ 24,158 $ 2,707 $ (6,495 ) $ (9,432 )
Net cash used in investing activities (TTM) $ (149,583 ) $ (184,552 ) $ (177,133 ) $ (194,979 ) $ (179,214 )
Net cash provided by financing activities (TTM) $ 746,824 $ 771,404 $ 765,503 $ 12,095 $ 11,028
Other Metrics
Active Customers (10)
North America 14.9 15.1 16.0 17.2 18.2
International 22.0 22.9 23.5 23.8 23.5
Total Active Customers 36.9 38.0 39.5 41.0 41.7
TTM Gross Billings / Average Active Customer (11)
North America $ 156 $ 151 $ 148 $ 152 $ 151
International $ 197 $ 175 $ 149 $ 138 $ 129
Consolidated $ 179 $ 165 $ 149 $ 144 $ 138
Headcount
Sales (12) 5,735 5,587 5,087 4,677 4,566
% North America 21 % 20 % 24 % 25 % 28 %
% International 79 % 80 % 76 % 75 % 72 %
Other 6,813 7,233 6,779 6,717 6,433
Total Headcount 12,548 12,820 11,866 11,394 10,999
(1) Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds. Includes direct billings and third party and other billings.
(2) Local represents deals from local merchants, deals with national merchants, and through local events (i.e., GrouponLive deals).
(3) 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.
(4) Cost of revenue is comprised of direct and indirect costs incurred to generate revenue. Direct cost of revenue includes the purchase price of consumer products, warehousing, shipping costs and inventory markdowns. Third party cost of revenue includes estimated refunds for which the merchant’s share is not recoverable. Other costs incurred to generate revenue are allocated to cost of third party revenue, direct revenue and other revenue for each of our categories (Local, Goods, and Travel and Other) in proportion to relative gross billings during the period.
(5) Represents change in financial measures that would have resulted had average exchange rates in the reporting period been the same as those in effect in the prior year period.
(6) The weighted-average diluted shares outstanding is calculated using the weighted-average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock units and restricted shares, as calculated using the treasury stock method.
(7) Adjusted EBITDA and Operating income excluding stock-based compensation and acquisition-related expense (benefit), net are non-GAAP financial measures. The Company reconciles Adjusted EBITDA to the most comparable U.S. GAAP financial measure, “Net (loss) income” for the periods presented, and the Company reconciles Operating income excluding stock-based compensation and acquisition-related expense (benefit), net to the most comparable U.S. GAAP financial measure, “Operating income (loss),” for the periods presented.
(8) Foreign Exchange Rate neutral operating results are non-GAAP financial measures. The Company reconciles these measures to the most comparable U.S. GAAP financial measures, ‘‘Gross Billings” and “Revenue,” for the periods presented.
(9) Free cash flow is a non-GAAP financial measure. The Company reconciles this measure to the most comparable U.S. GAAP financial measure, ‘‘Net cash provided by operating activities,” for the periods presented.
(10) Reflects the total number of unique accounts who have purchased Groupons during the trailing twelve months.
(11) Reflects the total gross billings generated in the trailing twelve months per average active customer over that period.
(12) Includes inside and outside merchant sales representatives, as well as sales support.
(13) 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.

]]> http://www.webpronews.com/groupon-earnings-beat-expectations-stock-on-the-rise-2013-05/feed 1 Groupon Puts Search “Front And Center” In Mobile Apps http://www.webpronews.com/groupon-puts-search-front-and-center-in-mobile-apps-2013-04 http://www.webpronews.com/groupon-puts-search-front-and-center-in-mobile-apps-2013-04#comments Tue, 23 Apr 2013 18:00:21 +0000 Chris Crum http://www.webpronews.com/?p=226326 ]]> Groupon has launched updates to its iPhone and Android apps, which make search “a front-and-center experience,” as the company says.

Here’s a look:

Groupon Search

Groupon Search

Groupon has this to say about search’s importance to its business:

Search is a critical part of Groupon’s product strategy. Most Groupon merchants now make their deals available on an ongoing basis, and search allows customers to find only the deals most relevant to them in this expanded marketplace. In iPhone v.2.5 search is prominent with a clickable icon that allows customers to navigate from anywhere in the app.

Search is also a central element of Android v.2.4, which also includes a sleek new interface for 10-inch tablets. The Android tablet market is growing quickly, and, with support for tablets, the Groupon Android app is now a great complement to Groupon’s highly regarded iPad app.

An increased focus on search from Groupon is long overdue. People want deals on specific things, not just the latest massage offer that they happen to email you on a given day. This is why Google’s AdWords has been so successful. Advertisers can cater to what people are actually looking for. Likewise, with Groupon, this should be a basic element of the service, and promoted as such.

]]> http://www.webpronews.com/groupon-puts-search-front-and-center-in-mobile-apps-2013-04/feed 0 Groupon’s Next CEO Will Not Come From Within [REPORT] http://www.webpronews.com/groupons-next-ceo-will-not-come-from-within-report-2013-03 http://www.webpronews.com/groupons-next-ceo-will-not-come-from-within-report-2013-03#comments Wed, 06 Mar 2013 17:11:49 +0000 Josh Wolford http://www.webpronews.com/?p=220037 Last week, after a poor Q4 earnings report, Groupon finally ousted CEO Andrew Mason after months of speculation.

Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis were tapped to head the “Office of the Chief Executive” and serve in his place until a replacement is found.

And it looks like that replacement will come from outside the company.

Bloomberg quotes two sources close to the matter who say that Groupon’s search for the next CEO is focusing on outside candidates. The board will hire a recruiting firm in the next couple of weeks and expect to have a new CEO in place within 3 to 6 months.

Only if that search fails to find a suitable replacement will the company’s board consider someone from inside the company, says the report.

Groupon has already ruled out both Lefkofsky and Leonsis as possible CEOs.

Just before Groupon announced that Mason was out as CEO, the company reported disappointing earnings. Groupon missed Wall Street estimates, posting a net loss of $81.1 million for Q4 although revenue was up 30%.

Upon Mason’s departure, Groupon stock rose sharply from $4.53 to as high as $5.10 in after-hours trading. Currently the stock sits as $5.64.

]]> http://www.webpronews.com/groupons-next-ceo-will-not-come-from-within-report-2013-03/feed 0 Andrew Mason Does Some Massaging In This Taiwanese Animation http://www.webpronews.com/andrew-mason-does-some-massaging-in-this-taiwanese-animation-2013-03 http://www.webpronews.com/andrew-mason-does-some-massaging-in-this-taiwanese-animation-2013-03#comments Fri, 01 Mar 2013 14:28:07 +0000 Chris Crum http://www.webpronews.com/?p=219462 If you’ve been on the Internet since yesterday afternoon, you’ve probably heard that Groupon CEO Andrew Mason has been fired. You can read his letter here. The move wasn’t much of a surprise, as many simply wondered for quite some time when it was going to happen.

Naturally, Next Media Animation has a video of its take on how the events unfolded:

Good thing Mason has a good sense of humor.

See Also:

Groupon CEO Andrew Mason Is Pissed Off About Mayo

Groupon Kidz Club Launches With Some Questionable Characters

Groupon’s Insane Kidz Club Is Back [Video]

]]> http://www.webpronews.com/andrew-mason-does-some-massaging-in-this-taiwanese-animation-2013-03/feed 0 Groupon Stock Rises On Andrew Mason Departure http://www.webpronews.com/groupon-stock-rises-on-andrew-mason-departure-2013-03 http://www.webpronews.com/groupon-stock-rises-on-andrew-mason-departure-2013-03#comments Fri, 01 Mar 2013 14:09:50 +0000 Chris Crum http://www.webpronews.com/?p=219448 As you may know, Groupon fired its CEO on Thursday, a day after another disappointing earnings release, which sent stock tumbling. Since the news broke, the stock has taken a turn for the better.

In after hours trading on Thursday, the shares rose as high as 12% from the $4.53 closing price. Things have calmed down a bit in pre-market trading on Friday, with shares up to $4.65, up 2.65%.

Meanwhile, seemingly everyone on the Internet is throwing around their opinion of Mason and speculating on his and Groupon’s next move. Mason has been relatively quiet since just after the news broke, when he shared a letter he sent to Groupon employees, which included some of his characteristic sense of humor, and a comparison of Groupon to a game of Battletoads:

For those who are concerned about me, please don’t be – I love Groupon, and I’m terribly proud of what we’ve created. I’m OK with having failed at this part of the journey. If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through. I am so lucky to have had the opportunity to take the company this far with all of you. I’ll now take some time to decompress (FYI I’m looking for a good fat camp to lose my Groupon 40, if anyone has a suggestion), and then maybe I’ll figure out how to channel this experience into something productive.

He followed that up with this:


He also retweeted this:


That was 15 hours ago, and he’s been quiet (at least on Twitter) since.

According to CNN, Mason is getting a severance package of $378.36 due to his $756.72 per year salary (as some tech CEOs famously take low salaries because of their fortunes in stock). The report says Mason’s Groupon’s shares are worth $213 million at Thursday’s closing price.

]]> http://www.webpronews.com/groupon-stock-rises-on-andrew-mason-departure-2013-03/feed 0 Groupon CEO Andrew Mason Is Being Replaced http://www.webpronews.com/groupon-ceo-andrew-mason-is-being-replaced-2013-02 http://www.webpronews.com/groupon-ceo-andrew-mason-is-being-replaced-2013-02#comments Thu, 28 Feb 2013 21:40:44 +0000 Chris Crum http://www.webpronews.com/?p=219421 Groupon just announced that CEO Andrew Mason will no longer remain CEO of the company, which he founded. The company reported massively disappointing financial results on Wednesday, and the board has finally had enough.

Groupon Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis have been appointed to a newly created “Office of the Chief Executive,” effective immediately. They will serve in this role until they find a replacement for Mason. The search has already commenced.

“On behalf of the entire Groupon Board, I want to thank Andrew for his leadership, his creativity and his deep loyalty to Groupon. As a founder, Andrew helped invent the daily deals space, leading Groupon to become one of the fastest growing companies in history,” said Lefkofsky.

“Groupon will continue to invest in growth, and we are confident that with our deep management team and market-leading position, the company is well positioned for the future,” said Leonsis.

The company is careful to note that guidance outlined in its announcement on Wednesday remains unchanged.

Frankly, it was only a matter of time until the company ousted Mason. Rumors were already swirling late last year that it was about to happen. They managed to pretty much stifle the rumors until this week.

Mason tweeted out a message to Groupon employees:

The link in his tweet is having some issues for some. Here’s the full text of the letter:

People of Groupon,

After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding – I was fired today. If you’re wondering why… you haven’t been paying attention. From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that’s hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable.

You are doing amazing things at Groupon, and you deserve the outside world to give you a second chance. I’m getting in the way of that. A fresh CEO earns you that chance. The board is aligned behind the strategy we’ve shared over the last few months, and I’ve never seen you working together more effectively as a global company – it’s time to give Groupon a relief valve from the public noise.

For those who are concerned about me, please don’t be – I love Groupon, and I’m terribly proud of what we’ve created. I’m OK with having failed at this part of the journey. If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through. I am so lucky to have had the opportunity to take the company this far with all of you. I’ll now take some time to decompress (FYI I’m looking for a good fat camp to lose my Groupon 40, if anyone has a suggestion), and then maybe I’ll figure out how to channel this experience into something productive.

If there’s one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness – don’t waste the opportunity!

I will miss you terribly.

Love,
Andrew

Also, he tweeted this yesterday:

image: Stanford Business (YouTube)

]]> http://www.webpronews.com/groupon-ceo-andrew-mason-is-being-replaced-2013-02/feed 0 Groupon Earnings Disappoint, Stock Down 28% http://www.webpronews.com/groupon-earnings-disappoint-stock-down-28-2013-02 http://www.webpronews.com/groupon-earnings-disappoint-stock-down-28-2013-02#comments Thu, 28 Feb 2013 13:46:56 +0000 Chris Crum http://www.webpronews.com/?p=219182 Groupon reported its Q4 and fiscal year 2012 earnings on Wednesday afternoon, sending stock plummeting as results missed Wall Street estimates.

The company posted a net loss of $81.1 million for the quarter, though revenue was up 30% at $638.3 million.

Late last year, Groupon CEO Andrew Mason’s job came into question, and now reports are questioning how long he’ll remain in the position again. Groupon hasn’t commented on this since the new earnings release, but the Wall Street Journal reports:

As Groupon’s stock continues to falter, Mr. Mason will likely struggle to maintain the confidence of Groupon’s board members, particularly its chairman and largest shareholder, Eric Lefkofsky, who has sparred with Mr. Mason in the past, these people have said.

In pre-market trading Groupon is at $4.30 (-1.68‎, -28.12%‎).

Here’s the release in its entirety:

CHICAGO–(BUSINESS WIRE)–Groupon, Inc. (NASDAQ: GRPN) today announced financial results for the quarter and fiscal year ended December 31, 2012.

“Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities.”

Gross billings, which reflect the total dollar value of customer purchases of goods and services, excluding any applicable taxes and net of estimated refunds, increased 24% year-over-year to $1.52 billion in the fourth quarter 2012, compared with $1.23 billion in the fourth quarter 2011. Excluding the $21.0 million unfavorable impact from year-over-year changes in foreign exchange rates, gross billings growth was 25% compared with fourth quarter 2011.

Revenue increased 30% year-over-year to $638.3 million in the fourth quarter 2012, compared with $492.2 million in the fourth quarter 2011. Excluding the $7.7 million unfavorable impact from year-over-year changes in foreign exchange rates, revenue growth was 31% compared with fourth quarter 2011. Growth was driven by an increase in direct revenue, which grew 1549% year-over-year to $225.2 million in the fourth quarter 2012, compared with $13.7 million in the fourth quarter 2011.

Operating loss was $12.9 million in the fourth quarter 2012, including stock-based compensation and acquisition-related expenses of $26.6 million, and depreciation and amortization of $16.0 million. This compares with an operating loss of $15.0 million in the fourth quarter 2011, which included stock-based compensation and acquisition-related expenses of $32.9 million, and depreciation and amortization of $9.3 million. Year-over-year changes in foreign exchange rates had a $0.1 million favorable impact on operating results.

“Record billings growth this quarter is a clear signal that customers love Groupons,” said Andrew Mason, CEO of Groupon. “We will continue to invest in growth through 2013 as we see new opportunities to give our customers what they want.”

Operating cash flow decreased 61% year-over-year to $65.7 million, compared with $169.1 million in the fourth quarter 2011. Free cash flow, a non-GAAP financial measure calculated as operating cash flow less capital expenditures, decreased 83% year-over-year to $25.7 million, compared with $155.1 million in the fourth quarter 2011. At the end of the quarter, Groupon had $1.2 billion in cash and cash equivalents and no long-term borrowings.

Fourth quarter 2012 net loss attributable to common stockholders was $81.1 million, or $0.12 per share, reflecting stock-based compensation and acquisition-related expenses of $26.6 million and share count of 655.7 million. Fourth quarter 2012 results included a pre-tax non-operating loss of $50.6 million ($45.5 million after tax) related to the impairment of a cost method investment in China.

Net loss attributable to common stockholders increased by $15.7 million year-over-year, from a loss of $65.4 million, or $0.12 per share in the fourth quarter 2011, including stock-based compensation and acquisition-related expenses of $32.9 million.

Full Year 2012

Gross billings increased 35% year-over-year to $5.38 billion in 2012, compared with $3.99 billion in 2011. Excluding the $183.5 million unfavorable impact from year-over-year changes in foreign exchange rates, gross billings growth was 40% compared with 2011.

Revenue increased 45% year-over-year to $2.33 billion in 2012, compared with $1.61 billion in 2011. Excluding the $74.1 million unfavorable impact from year-over-year changes in foreign exchange rates, revenue growth was 50% compared with 2011. Growth was driven by an increase in direct revenue, which grew 2083% to $454.7 million in 2012, compared with $20.8 million in 2011.

Operating income was $98.7 million in 2012, including stock-based compensation and acquisition-related expenses of $105.0 million, and depreciation and amortization of $55.8 million. This compares with an operating loss of $233.4 million in 2011, which included stock-based compensation and acquisition-related expenses of $89.1 million, and depreciation and amortization of $32.1 million. Year-over-year changes in foreign exchange rates had a $7.4 million unfavorable impact on operating income.

Operating cash flow decreased 8% year-over-year to $266.8 million, compared with $290.4 million in 2011. Free cash flow decreased 31% year-over-year to $171.0 million, compared with $246.6 million in 2011.

Full year 2012 net loss attributable to common stockholders was $67.4 million, or $0.10 per share, reflecting stock-based compensation and acquisition-related expenses of $105.0 million and share count of 650.2 million.

Net loss attributable to common stockholders improved by $306.1 million year-over-year, from a loss of $373.5 million, or $1.03 per share in 2011, including stock-based compensation and acquisition-related expenses of $89.1 million.

Groupon, Inc.
Summary Consolidated and Segment Results
(dollars in thousands, except share and per share data)
(unaudited)
Three Months Ended Y/Y % Year Ended Y/Y %
December 31, Growth December 31, Growth
2012 2011 Y/Y %
Growth		 FX Effect (2) excluding
FX(2)		 2012 2011 Y/Y %
Growth		 FX Effect (2) excluding
FX(2)
Gross Billings (1)
North America $ 718,952 $ 475,807 51.1 % $ (2,569 ) 51.6 % $ 2,373,153 $ 1,561,927 51.9 % $ (2,780 ) 52.1 %
International 801,500 755,061 6.2 % (18,451 ) 8.6 % 3,007,031 2,423,574 24.1 % (180,739 ) 31.5 %
Consolidated Billings $ 1,520,452 $ 1,230,868 23.5 % $ (21,020 ) 25.2 % $ 5,380,184 $ 3,985,501 35.0 % $ (183,519 ) 39.6 %
Revenue
North America $ 375,351 $ 179,638 108.9 % $ (1,082 ) 109.6 % $ 1,165,700 $ 634,980 83.6 % $ (1,156 ) 83.8 %
International 262,951 312,526 (15.9 ) % (6,629 ) (13.7 ) % 1,168,772 975,450 19.8 % (72,960 ) 27.3 %
Consolidated revenue $ 638,302 $ 492,164 29.7 % $ (7,711 ) 31.3 % $ 2,334,472 $ 1,610,430 45.0 % $ (74,116 ) 49.6 %
Operating (loss) income $ (12,861 ) $ (14,972 ) 14.1 % $ 135 13.2 % $ 98,701 $ (233,386 ) N/A $ (7,401 ) N/A
Net loss attributable to common stockholders $ (81,089 ) $ (65,379 ) (24.0 ) % $ 1,102 (25.7 ) % $ (67,377 ) $ (373,494 ) 82.0 % $ (9,283 ) 84.4 %
Net loss per share
Basic $ (0.12 ) $ (0.12 ) $ (0.10 ) $ (1.03 )
Diluted $ (0.12 ) $ (0.12 ) $ (0.10 ) $ (1.03 )
Weighted average basic shares outstanding 655,678,123 528,421,712 650,214,119 362,261,324
Weighted average diluted shares outstanding 655,678,123 528,421,712 650,214,119 362,261,324
(1) Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds. Includes direct billings and third party and other billings.
(2) Represents change in financial measures that would have resulted had average exchange rates in the reporting period been the same as those in effect in the three months and year ended December 31, 2011.

Highlights

  • Largest sequential gross billings increase in Groupon history. All categories contributed to the biggest sequential increase in platform growth on an absolute dollar basis in Groupon’s history.
  • Unit milestone. The Company surpassed the 50 million unit mark for the first time in the fourth quarter 2012. Consolidated units, defined as vouchers and products ordered before cancellations and refunds, grew 21% year-over-year.
  • Seasonal strength in Groupon Goods. After a successful holiday season, Goods has now reached an annual run rate of about $2.0 billion in global billings, just five quarters after its launch.
  • Growing merchant selection and quality. As of the end of the fourth quarter, the number of active deals in North America increased almost 300% year-over-year to nearly 37,000.
  • Continued customer acquisition efficiencies. Marketing expense per new customer improved 61% year-over-year in the fourth quarter 2012, enabling the reduction of overall marketing spend by 61% compared with the fourth quarter 2011. As of December 31, 2012, Groupon had 41.0 million active customers, an increase of 22% year-over-year, with gross customer additions partially offset by higher customer inactivations.
  • Substantial growth in mobile transaction activity. In January 2013, nearly 40% of North American transactions were completed on mobile devices, an increase of 44% compared with January 2012. This compares with about one third of transactions completed on mobile devices in October 2012.
  • Launch of merchant services in 2012. Groupon launched a number of services in 2012 to strengthen relationships with local businesses, including Breadcrumb and Payments.

Outlook

Revenue for the first quarter 2013 is expected to be between $560 million and $610 million, an increase of between 0% and 9% compared with first quarter 2012.

Operating (loss) income for the first quarter 2013 is expected to be between $(10) million and $10 million, compared with $39.6 million in the first quarter 2012. This outlook includes $30 million of stock-based compensation, and assumes no acquisitions or investments, or material changes in foreign exchange rates.

For the full year 2013, operating income is expected to increase compared with 2012.

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 athttp://investor.groupon.com. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

Non-GAAP Financial Measures

In addition to financial results reported in accordance with generally accepted accounting principles (GAAP), we have provided the following non-GAAP financial measures in this release and the accompanying tables: foreign exchange rate neutral operating results, free cash flow and consolidated operating income (loss) excluding stock-based compensation and acquisition-related expense (benefit), net. These non-GAAP financial measures are presented to aid investors in better understanding Groupon’s performance. However, these measures are not intended to be a substitute for those reported in accordance with GAAP. These measures may be different from non-GAAP financial measures used by other companies.

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 period. These measures are intended to facilitate comparisons to our historical performance. For a reconciliation of foreign exchange rate neutral operating results to our GAAP operating results, see “Reconciliation of Foreign Exchange Rate Neutral Operating Results to U.S. GAAP Operating Results” and “Supplemental Financial Information and Business Metrics” included in the tables accompanying this release.

Free cash flow is a non-GAAP measure that comprises net cash provided by 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. For a reconciliation of free cash flow to cash flow from operations, see ”Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities” included in the tables accompanying this release.

Consolidated operating income (loss) excluding stock-based compensation and acquisition-related expense (benefit), net is a non-GAAP measure that comprises the consolidated total of the segment operating income (loss) of our two segments, North America and International. Stock-based compensation expense and acquisition-related expense (benefit), net are excluded from segment operating income (loss) that we report under GAAP for our segments. Stock-based compensation expense is primarily a non-cash item. Acquisition-related expense (benefit), net represents the change in the fair value of contingent consideration arrangements related to business combinations. We use consolidated operating income (loss) excluding stock-based compensation and acquisition-related expense (benefit), net to allocate resources and evaluate performance internally. For a reconciliation of consolidated operating income (loss) excluding stock-based compensation and acquisition-related expense (benefit), net to consolidated operating income (loss), see ”Supplemental Financial Information and Business Metrics” included in the tables accompanying this release.

Note on Forward Looking Statements

The statements contained in this presentation that refer to plans and expectations for the next quarter or the future are forward- looking statements that involve a number of risks and uncertainties, and actual results could differ materially from those discussed. The risks and uncertainties that could cause our results to differ materially from those included in the forward-looking statements include, but are not limited to, volatility in our revenue and operating results; risks related to our business strategy; responding to changes in the market; effectively dealing with challenges arising from our international operations; retaining existing customers and adding new customers; retaining existing merchant partners and adding new merchant partners; 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; 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; security breaches; protecting our intellectual property; handling acquisitions, joint ventures and strategic investments effectively; seasonality; payment-related risks; customer and merchant partner fraud; global economic uncertainty; compliance with rules and regulations associated with being a public company; and our ability to raise capital if necessary. We urge you to refer to the factors included under the headings ”Risk Factors” and ”Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, copies of which may be obtained by visiting the company’s Investor Relations web site at http://investor.groupon.com or the SEC’s web site at www.sec.gov. Groupon’s actual results could differ materially from those predicted or implied and reported results should not be considered an indication of future performance.

You should not rely upon forward-looking statements as predictions of future events. Although Groupon believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither the company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. The forward-looking statements reflect Groupon’s expectations as of February 27, 2013. Groupon undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this presentation to conform these statements to actual results or to changes in its expectations.

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.

Groupon, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
December 31,		 Year Ended
December 31,
2012 2011 2012 2011
Operating activities
Net loss $ (80,047 ) $ (59,679 ) $ (51,031 ) $ (297,762 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 15,965 9,301 55,801 32,055
Stock-based compensation 26,411 32,668 104,117 93,590
Deferred income taxes (17,259 ) 31,601 (7,651 ) 32,203
Excess tax benefits on stock-based compensation (2,403 ) 1,145 (27,023 ) (10,178 )
Loss on equity method investees 1,231 6,678 9,925 26,652
Acquisition-related expense (benefit), net 153 256 897 (4,537 )
Gain on return of common stock - - - (4,916 )
Gain on E-Commerce transaction - - (56,032 ) -
Impairment of cost method investment 50,553 - 50,553 -
Change in assets and liabilities, net of acquisitions:
Restricted cash (2,517 ) (4,378 ) (4,372 ) (12,519 )
Accounts receivable 12,723 (686 ) 10,534 (70,376 )
Prepaid expenses and other current assets (45,922 ) 4,731 (70,859 ) (36,292 )
Accounts payable 5,537 927 18,711 (20,997 )
Accrued merchant and supplier payables 96,029 65,236 149,918 380,108
Accrued expenses and other current liabilities (20,268 ) 80,164 47,742 189,127
Other, net 25,531 1,113 35,604 (5,711 )
Net cash provided by operating activities 65,717 169,077 266,834 290,447
Net cash used in investing activities (52,753 ) (34,907 ) (194,979 ) (147,433 )
Net cash (used in) provided by financing activities (6,495 ) 746,913 12,095 867,205
Effect of exchange rate changes on cash and cash equivalents 1,809 (2,083 ) 2,404 (6,117 )
Net increase in cash and cash equivalents 8,278 879,000 86,354 1,004,102
Cash and cash equivalents, beginning of period 1,201,011 243,935 1,122,935 118,833
Cash and cash equivalents, end of the period $ 1,209,289 $ 1,122,935 $ 1,209,289 $ 1,122,935
Groupon, Inc.
Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
Three Months Ended December 31, Year Ended December 31,
2012 2011 2012 2011
Revenue:
Third party and other revenue $ 413,127 $ 478,510 $ 1,879,729 $ 1,589,604
Direct revenue 225,175 13,654 454,743 20,826
Total revenue 638,302 492,164 2,334,472 1,610,430
Cost of revenue:
Third party and other revenue 63,905 86,882 297,739 243,789
Direct revenue 218,567 9,383 421,201 15,090
Total cost of revenue 282,472 96,265 718,940 258,879
Gross Profit 355,830 395,899 1,615,532 1,351,551
Operating expenses:
Marketing 60,913 155,299 336,854 768,472
Selling, general and administrative 307,625 255,316 1,179,080 821,002
Acquisition-related expense (benefit), net 153 256 897 (4,537 )
Total operating expenses 368,691 410,871 1,516,831 1,584,937
(Loss) income from operations (12,861 ) (14,972 ) 98,701 (233,386 )
Interest and other (expense) income, net (48,279 ) (3,835 ) 6,166 5,973
Loss on equity method investees (1,231 ) (6,678 ) (9,925 ) (26,652 )
(Loss) income before provision for income taxes (62,371 ) (25,485 ) 94,942 (254,065 )
Provision for income taxes 17,676 34,194 145,973 43,697
Net loss (80,047 ) (59,679 ) (51,031 ) (297,762 )
Less: Net (income) loss attributable to noncontrolling interests (936 ) (5,267 ) (3,742 ) 18,335
Net loss attributable to Groupon, Inc. (80,983 ) (64,946 ) (54,773 ) (279,427 )
Redemption of preferred stock in excess of carrying value - - - (34,327 )
Adjustment of redeemable noncontrolling interests to redemption value (106 ) (433 ) (12,604 ) (59,740 )
Net loss attributable to common stockholders $ (81,089 ) $ (65,379 ) $ (67,377 ) $ (373,494 )
Net loss per share
Basic $ (0.12 ) $ (0.12 ) $ (0.10 ) $ (1.03 )
Diluted $ (0.12 ) $ (0.12 ) $ (0.10 ) $ (1.03 )
Weighted average number of shares outstanding
Basic 655,678,123 528,421,712 650,214,119 362,261,324
Diluted 655,678,123 528,421,712 650,214,119 362,261,324
Groupon, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)
December 31,
2012 2011
Assets
Current assets:
Cash and cash equivalents $ 1,209,289 $ 1,122,935
Accounts receivable, net 96,713 108,747
Deferred income taxes 31,211 19,243
Prepaid expenses and other current assets 150,573 72,402
Total current assets 1,487,786 1,323,327
Property, equipment and software, net 121,072 51,800
Goodwill 206,684 166,903
Intangible assets, net 42,597 45,667
Investments 84,209 50,604
Deferred income taxes, non-current 29,916 46,104
Other non-current assets 59,210 90,071
Total Assets $ 2,031,474 $ 1,774,476
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 59,865 $ 40,918
Accrued merchant and supplier payables 671,305 520,723
Accrued expenses 246,924 212,007
Deferred income taxes 53,700 76,841
Other current liabilities 136,647 144,673
Total current liabilities 1,168,441 995,162
Deferred income taxes, non-current 20,860 7,428
Other non-current liabilities 100,072 70,766
Total Liabilities 1,289,373 1,073,356
Commitments and contingencies
Redeemable noncontrolling interests - 1,653
Stockholders’ Equity
Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized, 654,523,706 and 641,745,225 shares issued and outstanding at December 31, 2012 and 2011, respectively 65 64
Class B common stock, par value $0.0001 per share, 10,000,000 shares authorized, 2,399,976 shares issued and outstanding at December 31, 2012 and 2011 - -
Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized, no shares issued and outstanding at December 31, 2012 and 2011 - -
Additional paid-in capital 1,485,006 1,388,253
Accumulated deficit (753,477 ) (698,704 )
Accumulated other comprehensive income 12,446 12,928
Total Groupon, Inc. Stockholders’ Equity 744,040 702,541
Noncontrolling interests (1,939 ) (3,074 )
Total Equity 742,101 699,467
Total Liabilities and Equity $ 2,031,474 $ 1,774,476
Groupon, Inc.
Segment Information
(in thousands)
(unaudited)
Three Months Ended December 31, Year Ended December 31,
2012 2011 2012 2011
North America
Gross Billings (1) $ 718,952 $ 475,807 $ 2,373,153 $ 1,561,927
Revenue $ 375,351 $ 179,638 $ 1,165,700 $ 634,980
Segment cost of revenue and operating expenses(2)(3) 358,319 161,399 1,025,974 630,184
Segment operating income(3) $ 17,032 $ 18,239 $ 139,726 $ 4,796
Segment income as a percent of segment revenue 4.5 % 10.2 % 12.0 % 0.8 %
International
Gross Billings (1) $ 801,500 $ 755,061 $ 3,007,031 $ 2,423,574
Revenue $ 262,951 $ 312,526 $ 1,168,772 $ 975,450
Segment cost of revenue and operating expenses(2)(3) 266,280 312,813 1,104,783 1,124,579
Segment operating (loss) income(3) $ (3,329 ) $ (287 ) $ 63,989 $ (149,129 )
Segment (loss) income as a percent of segment revenue (1.3 ) % (0.1 ) % 5.5 % (15.3 ) %
Consolidated
Gross Billings (1) $ 1,520,452 $ 1,230,868 $ 5,380,184 $ 3,985,501
Revenue $ 638,302 $ 492,164 $ 2,334,472 $ 1,610,430
Segment cost of revenue and operating expenses(2) 624,599 474,212 2,130,757 1,754,763
Segment operating income (loss) $ 13,703 $ 17,952 $ 203,715 $ (144,333 )
Segment income (loss) as a percent of segment revenue 2.1 % 3.6 % 8.7 % (9.0 ) %
Stock-based compensation 26,411 32,668 104,117 93,590
Acquisition-related expense (benefit), net 153 256 897 (4,537 )
Operating (loss) income (12,861 ) (14,972 ) 98,701 (233,386 )
Interest and other expense (income), net 48,279 3,835 (6,166 ) (5,973 )
Loss on equity method investees 1,231 6,678 9,925 26,652
(Loss) income before provision for income taxes (62,371 ) (25,485 ) 94,942 (254,065 )
Provision for income taxes 17,676 34,194 145,973 43,697
Net loss $ (80,047 ) $ (59,679 ) $ (51,031 ) $ (297,762 )
(1) Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds. Includes direct billings and third party and other billings.
(2) Represents cost of revenue and operating expenses, excluding stock-based compensation and acquisition-related expense (benefit), net.
(3) We record intercompany cross-charges every period for services provided by the United States to our international subsidiaries. We updated our intercompany allocations for those charges during the fourth quarter of 2012, which resulted in a one-time $8.5 million decrease to International Segment operating expenses (reduction to International Segment operating loss) and a corresponding increase to North America Segment operating expenses (reduction to North America Segment operating income).
Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities
(in thousands)
(unaudited)
The following is a reconciliation of free cash flow to the most comparable U.S. GAAP measure, “Net cash provided by operating activities,” for the three months and years ended December 31, 2012 and 2011, respectively:
Three Months Ended December 31, Year Ended December 31,
2012 2011 2012 2011
Net cash provided by operating activities $ 65,717 $ 169,077 $ 266,834 $ 290,447
Purchases of property and equipment and capitalized software (40,034 ) (13,986 ) (95,836 ) (43,811 )
Free cash flow $ 25,683 $ 155,091 $ 170,998 $ 246,636
Net cash used in investing activities $ (52,753 ) $ (34,907 ) $ (194,979 ) $ (147,433 )
Net cash (used in) provided by financing activities $ (6,495 ) $ 746,913 $ 12,095 $ 867,205
Reconciliation of Foreign Exchange Rate Neutral Operating Results to Revenue and (Loss) Income from Operations
(in thousands)
(unaudited)
The following is a reconciliation of foreign exchange rate neutral operating results to the most comparable U.S. GAAP measures, “Revenue” and “(Loss) Income from operations,” for the three months and year ended December 31, 2012:
The effect on the Company’s consolidated statements of operations from changes in exchange rates versus the U.S. Dollar for the three months ended December 31, 2012 are as follows:
Three Months Ended December 31, 2012 Three Months Ended December 31, 2012
At Avg. Exchange At Avg. Exchange
Q4 2011
Rates (1)		 Rate
Effect (2)		 As
Reported		 Q3 2012
Rates (3)		 Rate
Effect (2)		 As
Reported
Revenue $ 646,013 $ (7,711 ) $ 638,302 $ 634,734 $ 3,568 $ 638,302
Loss from operations $ (12,996 ) $ 135 $ (12,861 ) $ (12,075 ) $ (786 ) $ (12,861 )
The effect on the Company’s consolidated statements of operations from changes in exchange rates versus the U.S. Dollar for the year ended December 31, 2012 are as follows:
Year Ended December 31, 2012 Year Ended December 31, 2012
At Avg. Exchange At Avg. Exchange
2011
Rates (1)		 Rate
Effect (2)		 As
Reported		 Q4’11 – Q3’12
Rates (3)		 Rate
Effect (2)		 As
Reported
Revenue $ 2,408,588 $ (74,116 ) $ 2,334,472 $ 2,344,952 $ (10,480 ) $ 2,334,472
Income from operations $ 106,102 $ (7,401 ) $ 98,701 $ 105,467 $ (6,766 ) $ 98,701
(1) Represents the outcome that would have resulted had average exchange rates in the reported period been the same as those in effect during the three months and year ended December 31, 2011.
(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 outcome that would have resulted had average exchange rates in the reported period been the same as those in effect during the three and twelve months ended September 30, 2012.
Supplemental Financial Information and Business Metrics(13)
(in thousands, except per share and headcount data and TTM
Gross Billings / Average Active Customer)
(unaudited)
Q1 2011 (8) Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012
Segments
North America Segment:
Gross Billings (1) $ 315,152 $ 369,990 $ 400,978 $ 475,807 $ 553,557 $ 548,275 $ 552,369 $ 718,952
Year-over-year growth 610 % 359 % 204 % 118 % 76 % 48 % 38 % 51 %
% of Consolidated Gross Billings 47 % 40 % 35 % 39 % 41 % 43 % 45 % 47 %
Gross Billings (1) Trailing Twelve Months (TTM) $ 745,772 $ 1,035,183 $ 1,304,128 $ 1,561,927 $ 1,800,332 $ 1,978,617 $ 2,130,008 $ 2,373,153
Revenue:
Third Party and Other Revenue (2) $ 136,612 $ 157,205 $ 161,525 $ 179,638 $ 230,984 $ 207,119 $ 158,545 $ 165,776
Direct Revenue (2) - - - - 7,581 53,062 133,058 209,575
Total Revenue $ 136,612 $ 157,205 $ 161,525 $ 179,638 $ 238,565 $ 260,181 $ 291,603 $ 375,351
Year-over-year growth 574 % 341 % 188 % 103 % 75 % 66 % 81 % 109 %
% of Consolidated Revenue 46 % 40 % 38 % 36 % 43 % 46 % 51 % 59 %
Revenue TTM $ 316,752 $ 438,305 $ 543,705 $ 634,980 $ 736,933 $ 839,909 $ 969,987 $ 1,165,700
Cost of Revenue:
Third Party and Other Cost of Revenue (3) $ 25,050 $ 32,169 $ 31,316 $ 51,419 $ 62,580 $ 40,155 $ 15,475 $ 27,002
Direct Cost of Revenue (3) - - - - 6,671 46,159 115,560 196,789
Total Cost of Revenue $ 25,050 $ 32,169 $ 31,316 $ 51,419 $ 69,251 $ 86,314 $ 131,035 $ 223,791
% of North America Total Revenue 18 % 20 % 19 % 29 % 29 % 33 % 45 % 60 %
Gross Profit
Third Party and Other $ 111,562 $ 125,036 $ 130,209 $ 128,219 $ 168,404 $ 166,964 $ 143,070 $ 138,774
Direct - - - - 910 6,903 17,498 12,786
Total $ 111,562 $ 125,036 $ 130,209 $ 128,219 $ 169,314 $ 173,867 $ 160,568 $ 151,560
% of North America Total Revenue 82 % 80 % 81 % 71 % 71 % 67 % 55 % 40 %
Operating (Loss) Income Excl Stock-Based Compensation (SBC), Acquisition-Related Expenses $ (21,778 ) $ (10,501 ) $ 18,836 $ 18,239 $ 40,172 $ 43,429 $ 39,093 $ 17,032
Year-over-year growth N/A (2,678 ) % 496 % N/A N/A N/A 108 % (7 ) %
% of Consolidated Operating (Loss) Income Excl SBC, Acq-Related 22 % 17 % 1,113 % 102 % 59 % 60 % 77 % 124 %
Operating Margin Excl SBC, Acq-Related (% of North America Total revenue) (15.9 ) % (6.7 ) % 11.7 % 10.2 % 16.8 % 16.7 % 13.4 % 4.5 %
Year-over-year growth (bps) (5,879 ) (562 ) 603 3,494 3,278 2,337 170 (570 )
Operating (Loss) Income TTM Excl SBC, Acq-Related $ (40,901 ) $ (51,024 ) $ (35,348 ) $ 4,796 $ 66,746 $ 120,676 $ 140,933 $ 139,726
Operating Margin TTM Excl SBC, Acq-Related (% of North America Total TTM revenue) (12.9 ) % (11.6 ) % (6.5 ) % 0.8 % 9.1 % 14.4 % 14.5 % 12.0 %
Year-over-year growth (bps) (3,604 ) (2,266 ) (1,467 ) 596 2,197 2,601 2,100 1,120
International Segment:
Gross Billings (1) $ 353,022 $ 559,259 $ 756,232 $ 755,061 $ 801,243 $ 738,401 $ 665,887 $ 801,500
Year-over-year growth N/A 5,057 % 1,115 % 283 % 127 % 32 % (12 ) % 6 %
Year-over-year growth, excluding FX (4) N/A 4,587 % 1,021 % 287 % 138 % 45 % (4 ) % 9 %
% of Consolidated Gross Billings 53 % 60 % 65 % 61 % 59 % 57 % 55 % 53 %
Gross Billings (1) TTM $ 623,367 $ 1,171,781 $ 1,865,774 $ 2,423,574 $ 2,871,795 $ 3,050,937 $ 2,960,592 $ 3,007,031
Revenue:
Third Party and Other Revenue (2) $ 158,911 $ 235,377 $ 261,464 $ 298,872 $ 309,069 $ 295,866 $ 265,019 $ 247,351
Direct Revenue (2) - - 7,172 13,654 11,649 12,288 11,930 15,600
Total Revenue $ 158,911 $ 235,377 $ 268,636 $ 312,526 $ 320,718 $ 308,154 $ 276,949 $ 262,951
Year-over-year growth N/A 7,709 % 947 % 273 % 102 % 31 % 3 % (16 ) %
Year-over-year growth, excluding FX (4) N/A 7,013 % 868 % 276 % 112 % 44 % 13 % (14 ) %
% of Consolidated Revenue 54 % 60 % 62 % 64 % 57 % 54 % 49 % 41 %
Revenue TTM $ 271,440 $ 503,803 $ 746,785 $ 975,450 $ 1,137,257 $ 1,210,034 $ 1,218,347 $ 1,168,772
Cost of Revenue:
Third Party and Other Cost of Revenue (3) $ 14,715 $ 22,634 $ 31,023 $ 35,463 $ 40,049 $ 36,877 $ 38,698 $ 36,903
Direct Cost of Revenue (3) - - 5,707 9,383 10,198 11,993 12,053 21,778
Total Cost of Revenue $ 14,715 $ 22,634 $ 36,730 $ 44,846 $ 50,247 $ 48,870 $ 50,751 $ 58,681
% of International Total Revenue 9 % 10 % 14 % 14 % 16 % 16 % 18 % 22 %
Gross Profit
Third Party and Other $ 144,196 $ 212,743 $ 230,441 $ 263,409 $ 269,020 $ 258,989 $ 226,321 $ 210,448
Direct - - 1,465 4,271 1,451 295 (123 ) (6,178 )
Total $ 144,196 $ 212,743 $ 231,906 $ 267,680 $ 270,471 $ 259,284 $ 226,198 $ 204,270
% of International Total Revenue 91 % 90 % 86 % 86 % 84 % 84 % 82 % 78 %
Operating (Loss) Income Excl SBC, Acq-Related $ (76,506 ) $ (51,808 ) $ (20,528 ) $ (287 ) $ 27,418 $ 28,505 $ 11,395 $ (3,329 )
Year-over-year growth N/A (125 ) % 21 % 100 % N/A 155 N/A 1060 %
% of Consolidated Operating (Loss) Income Excl SBC, Acq-Related 78 % 83 % (1,213 ) % (2 ) % 41 % 40 % 23 % (24 ) %
Operating Margin Excl SBC, Acq-Related (% of International Total revenue) (48.1 ) % (22.0 ) % (7.6 ) % (0.1 ) % 8.5 % 9.3 % 4.1 % (1.3 ) %
Year-over-year growth (bps) N/A 74,265 9,392 14,474 5,669 3,126 1,170 (120 )
Operating (Loss) Income TTM Excl SBC, Acq-Related $ (247,063 ) $ (275,824 ) $ (270,298 ) $ (149,129 ) $ (45,205 ) $ 35,108 $ 67,031 $ 63,989
Operating Margin TTM Excl SBC, Acq-Related (% of International Total TTM revenue) (91.0 ) % (54.7 ) % (36.2 ) % (15.3 ) % (4.0 ) % 2.9 % 5.5 % 5.5 %
Year-over-year growth (bps) N/A 70,992 13,508 13,628 8,704 5,765 4,170 2,080
Consolidated Results of Operations
Gross Billings (1) $ 668,174 $ 929,249 $ 1,157,210 $ 1,230,868 $ 1,354,800 $ 1,286,676 $ 1,218,256 $ 1,520,452
Year-over-year growth 1,405 % 916 % 496 % 196 % 103 % 38 % 5 % 24 %
Year-over-year growth, excluding FX (4) 1,378 % 859 % 465 % 198 % 108 % 47 % 11 % 25 %
Gross Billings (1) (TTM) $ 1,369,139 $ 2,206,964 $ 3,169,902 $ 3,985,501 $ 4,672,127 $ 5,029,554 $ 5,090,600 $ 5,380,184
Year-over-year growth 1,651 % 1,227 % 804 % 435 % 241 % 128 % 61 % 35 %
Revenue:
Third Party and Other Revenue (2) $ 295,523 $ 392,582 $ 422,989 $ 478,510 $ 540,053 $ 502,985 $ 423,564 $ 413,127
Direct Revenue (2) - - 7,172 13,654 19,230 65,350 144,988 225,175
Total Consolidated Revenue $ 295,523 $ 392,582 $ 430,161 $ 492,164 $ 559,283 $ 568,335 $ 568,552 $ 638,302
Year-over-year growth 1,358 % 915 % 426 % 186 % 89 % 45 % 32 % 30 %
Year-over-year growth, excluding FX (4) 1,332 % 858 % 401 % 188 % 95 % 53 % 38 % 31 %
Total Consolidated Revenue TTMYear-over-year growth, excluding FX (1) $ 588,192 $ 942,108 $ 1,290,490 $ 1,610,430 $ 1,874,190 $ 2,049,943 $ 2,188,334 $ 2,334,472
Year-over-year growth 1,594 % 1,205 % 761 % 415 % 219 % 118 % 70 % 45 %
Cost of Revenue:
Third Party and Other Cost of Revenue (3) $ 39,765 $ 54,803 $ 62,339 $ 86,882 $ 102,629 $ 77,032 $ 54,173 $ 63,905
Direct Cost of Revenue (3) - - 5,707 9,383 16,869 58,152 127,613 218,567
Total Consolidated Cost of Revenue $ 39,765 $ 54,803 $ 68,046 $ 96,265 $ 119,498 $ 135,184 $ 181,786 $ 282,472
% of Total Consolidated Revenue 13 % 14 % 16 % 20 % 21 % 24 % 32 % 44 %
Gross Profit
Third Party and Other $ 255,758 $ 337,779 $ 360,650 $ 391,628 $ 437,424 $ 425,953 $ 369,391 $ 349,222
Direct - - 1,465 4,271 2,361 7,198 17,375 6,608
Total $ 255,758 $ 337,779 $ 362,115 $ 395,899 $ 439,785 $ 433,151 $ 386,766 $ 355,830
% of Total Consolidated Revenue 87 % 86 % 84 % 80 % 79 % 76 % 68 % 56 %
Operating (Loss) Income Excl SBC, Acq-Related $ (98,284 ) $ (62,309 ) $ (1,692 ) $ 17,952 $ 67,590 $ 71,934 $ 50,488 $ 13,703
Year-over-year growth N/A (166 ) % 93. % N/A N/A N/A N/A (24 ) %
Operating Margin Excl SBC, Acq-Related (% of Total Consolidated revenue) (33.3 ) % (15.9 ) % (0.4 ) % 3.6 % 12.1 % 12.7 % 8.9 % 2.1 %
Year-over-year growth (bps) (7,611 ) 4,471 2,760 8,689 4,534 2,853 930 (150 )
Operating (Loss) Income TTM Excl SBC, Acq-Related $ (287,964 ) $ (326,848 ) $ (305,646 ) $ (144,333 ) $ 21,541 $ 155,784 $ 207,964 $ 203,715
Operating Margin TTM Excl SBC, Acq-Related (% of Total Consolidated TTM revenue) (49.0 ) % (34.7 ) % (23.7 ) % (9.0 ) % 1.1 % 7.6 % 9.5 % 8.7 %
Year-over-year growth (bps) (7,208 ) (1,333 ) 245 4,887 5,011 4,229 3,320 1,770
Operating (Loss) Income $ (117,148 ) $ (101,027 ) $ (239 ) $ (14,972 ) $ 39,639 $ 46,485 $ 25,438 $ (12,861 )
Year-over-year growth N/A (174 ) % 100 % 96. % N/A N/A N/A 14 %
Operating Margin (% of Total Consolidated revenue) (39.6 ) % (25.7 ) % (0.1 ) % (3.0 ) % 7.1 % 8.2 % 4.5 % (2.0 ) %
Year-over-year growth (bps) (8,192 ) 6,949 6,838 19,213 4,673 3,391 457 100
Operating (Loss) Income TTM $ (546,064 ) $ (610,272 ) $ (554,543 ) $ (233,386 ) $ (76,599 ) $ 70,913 $ 96,590 $ 98,701
Operating Margin TTM (% of Total Consolidated TTM revenue) (92.8 ) % (64.8 ) % (43.0 ) % (14.5 ) % (4.1 ) % 3.5 % 4.4 % 4.2 %
Year-over-year growth (bps) (11,533 ) (2,457 ) 1,427 11,983 8,875 6,824 4,740 1,870
Net (Loss) Income Attributable to Common Stockholders (146,480 ) (107,406 ) (54,229 ) (65,379 ) (11,695 ) 28,386 (2,979 ) (81,089 )
Weighted Average Basic Shares Outstanding 307,849 303,415 307,605 528,422 644,097 647,150 653,224 655,678
Weighted Average Diluted Shares Outstanding (5) 307,849 303,415 307,605 528,422 644,097 663,123 653,224 655,678
Net (Loss) Earnings per Share
Basic $ (0.48 ) $ (0.35 ) $ (0.18 ) $ (0.12 ) $ (0.02 ) $ 0.04 $ (0.00 ) $ (0.12 )
Diluted $ (0.48 ) $ (0.35 ) $ (0.18 ) $ (0.12 ) $ (0.02 ) $ 0.04 $ (0.00 ) $ (0.12 )
Supplemental Financial Information and Business Metrics(13)
(in thousands, except per share and headcount data and TTM
Gross Billings / Average Active Customer)
(unaudited)
Q1 2011 (8) Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012
Depreciation and Amortization
North America $ 1,273 $ 1,910 $ 2,817 $ 4,515 $ 5,004 $ 6,669 $ 8,153 $ 10,754
International 6,325 6,188 4,241 4,786 6,712 6,141 7,157 5,211
Consolidated $ 7,598 $ 8,098 $ 7,058 $ 9,301 $ 11,716 $ 12,810 $ 15,310 $ 15,965
The following is a quarterly reconciliation of Operating (Loss) Income, excluding stock-based compensation and acquisition-related expense (benefit), net, to the most comparable U.S. GAAP measure, “Operating (Loss) Income.” (6)
Operating (Loss) Income, excluding stock-based compensation and acquisition-related expense $ (98,284 ) $ (62,309 ) $ (1,692 ) $ 17,952 $ 67,590 $ 71,934 $ 50,488 $ 13,703
Stock-based Compensation (18,864 ) (38,718 ) (3,340 ) (32,668 ) (28,003 ) (27,084 ) (22,619 ) (26,411 )
Acquisition-related expense (benefit), net - - 4,793 (256 ) 52 1,635 (2,431 ) (153 )
Operating (Loss) Income $ (117,148 ) $ (101,027 ) $ (239 ) $ (14,972 ) $ 39,639 $ 46,485 $ 25,438 $ (12,861 )
The following is a trailing twelve months reconciliation of Operating (Loss) Income, excluding stock-based compensation and acquisition-related expense (benefit), net, to the most comparable U.S. GAAP measure, “Operating (Loss) Income.” (6)
Operating (Loss) Income, excluding stock-based compensation and acquisition-related expense TTM $ (287,964 ) $ (326,848 ) $ (305,646 ) $ (144,333 ) $ 21,541 $ 155,784 $ 207,964 $ 203,715
Stock-based Compensation (54,916 ) (89,674 ) (88,351 ) (93,590 ) (102,729 ) (91,095 ) (110,374 ) (104,117 )
Acquisition-related expense (benefit), net (203,184 ) (193,750 ) (160,546 ) 4,537 4,589 6,224 (1,000 ) (897 )
Operating (Loss) Income TTM $ (546,064 ) $ (610,272 ) $ (554,543 ) $ (233,386 ) $ (76,599 ) $ 70,913 $ 96,590 $ 98,701
The following is a quarterly reconciliation of foreign exchange rate neutral Gross Billings growth from the comprable quarterly periods of the prior year to reported Gross billings growth from the comprable quarterly periods of the prior year.(7)
International Gross Billings, excluding FX N/A 4,587 % 1,021 % 287 % 138 % 45 % (4 ) % 9 %
FX Effect N/A 470 % 94 % (4 ) % (11 ) % (13 ) % (8 ) % (3 ) %
International Gross Billings N/A 5,057 % 1,115 % 283 % 127 % 32 % (12 ) % 6 %
Consolidated Gross Billings, excluding FX 1,378 % 859 % 465 % 198 % 108 % 47 % 11 % 25 %
FX Effect 27 % 57 % 31 % (2 ) % (5 ) % (9 ) % (6 ) % (1 ) %
Condolidated Gross Billings 1,405 % 916 % 496 % 196 % 103 % 38 % 5 % 24 %
The following is a quarterly reconciliation of foreign exchange rate neutral Revenue growth from the comprable quarterly periods of the prior year to reported Revenue growth from the comprable quarterly periods of the prior year.(7)
International Revenue, excluding FX N/A 7,013 % 868 % 276 % 112 % 44 % 13 % (14 ) %
FX Effect N/A 696 % 79 % (3 ) % (10 ) % (13 ) % (10 ) % (2 ) %
International Revenue N/A 7,709 % 947 % 273 % 102 % 31 % 3 % (16 ) %
Consolidated Revenue, excluding FX 1,332 % 858 % 401 % 188 % 95 % 53 % 38 % 31 %
FX Effect 26 % 57 % 25 % (2 ) % (6 ) % (8 ) % (6 ) % (1 ) %
Consolidated Revenue 1,358 % 915 % 426 % 186 % 89 % 45 % 32 % 30 %
Cash Flow
Operating cash flow (TTM) $ 91,928 $ 128,316 $ 173,291 $ 290,447 $ 356,221 $ 392,517 $ 370,194 $ 266,834
Purchases of property, equipment and capitalized software, net (TTM) (24,780 ) (31,949 ) (38,414 ) (43,811 ) (45,932 ) (62,401 ) (69,788 ) (95,836 )
Free cash flow (TTM) (9) $ 67,148 $ 96,367 $ 134,877 $ 246,636 $ 310,289 $ 330,116 $ 300,406 $ 170,998
Net cash (used in) provided by investing activities (TTM) $ (55,510 ) $ (83,226 ) $ (124,301 ) $ (147,433 ) $ (149,583 ) $ (184,552 ) $ (177,133 ) $ (194,979 )
Net cash provided by (used in) financing activities (TTM) $ 142,549 $ 125,404 $ 130,593 $ 867,205 $ 746,824 $ 771,404 $ 765,503 $ 12,095
Other Metrics:
Active Customers (10)
North America 8,213 11,039 12,823 14,084 14,876 15,121 15,983 17,215
International 7,163 11,998 16,083 19,658 21,974 22,925 23,542 23,834
Total Active Customers 15,376 23,037 28,906 33,742 36,850 38,046 39,525 41,049
TTM Gross Billings / Average Active Customer (11) $ 169 $ 174 $ 189 $ 187 $ 179 $ 165 $ 149 $ 144
Headcount
Sales (12) 3,556 4,850 4,853 5,196 5,735 5,587 5,087 4,677
% North America 19 % 20 % 21 % 20 % 21 % 20 % 24 % 25 %
% International 81 % 80 % 79 % 80 % 79 % 80 % 76 % 75 %
Other 3,551 4,775 5,565 6,275 6,813 7,233 6,779 6,717
Total Headcount 7,107 9,625 10,418 11,471 12,548 12,820 11,866 11,394
(1) Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds. Includes direct billings and third party and other billings.
(2) 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 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.
(3) Cost of revenue is comprised of direct and indirect costs incurred to generate revenue. Direct cost of revenue includes the purchase price of consumer products, warehousing, shipping costs and inventory markdowns. Third party cost of revenue includes estimated refunds for which the merchant’s share is not recoverable. Other costs incurred to generate revenue are allocated to cost of third party revenue, direct revenue and other revenue in proportion to relative gross billings during the period.
(4) Represents change in financial measures that would have resulted had average exchange rates in the reported period been the same as those in effect in the prior year period.
(5) The weighted-average diluted shares outstanding is calculated using the weighted-average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock units and restricted shares, as calculated using the treasury stock method.
(6) Operating income excluding stock-based compensation and acquisition-related activities is a non-GAAP financial measure. The Company reconciles this measure to the most comparable U.S. GAAP measure, ‘‘Operating Income,” for the periods presented.
(7) Foreign Exchange Rate neutral operating results are non-GAAP financial measures. The Company reconciles these measures to the most comparable U.S. GAAP measures, ‘‘Gross Billings” and “Revenue,” for the periods presented.
(8) Year-over-year growth is unavailable for select international growth measures as Groupon did not commence international operations until the second quarter of 2010.
(9) Free cash flow is a non-GAAP financial measure. The Company reconciles this measure to the most comparable U.S. GAAP measure, ‘‘Net cash provided by operating activities,” for the periods presented. See “Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities.”
(10) Reflects the total number of unique accounts who have purchased Groupons during the trailing twelve months.
(11) Reflects the total gross billings generated in the trailing twelve months per average active customer over that period.
(12) Includes inside and outside merchant sales representatives, as well as sales support.
(13) 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.


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