Tag: Groupon

Groupon the Latest Company to Lay Off Employees

Groupon is the latest company to announce significant layoffs as a result of the economic downturn.

According to TechCrunch, Groupon laid off approximately 15% of its 3,416 employees, or 500 individuals. The move impacted a wide array of departments, including sales, recruiting, engineering, merchant development, product and marketing.

“Our overall business performance is not at the levels we anticipated and we are taking decisive actions to improve our trajectory,” CEO Kedar Deshpande said in a statement provided to TechCrunch.

Deshpande said the layoffs will help the company achieve a positive cash flow by the end of 2022.

In a letter to employees, Deshpande said the company would be focusing on “self-service merchant acquisition capabilities” and that the reorganization would allow it to focus “only on mission-critical activities and leaning on more external support.”

The shift in focus will also impact the company’s cloud strategy.

“In addition, we are proposing to reduce cloud infrastructure and support functions as we wrap up cloud migrations.”

August 8, 2022
Groupon CEO: New Plan ‘Moving Us Away From Email Deals’

Groupon announced a business model transformation that moves them away from email and daily deals. Groupon wants their website to be a place for consumers to find great deals and information and also be a utility for merchants to use every day to grow their businesses, says Groupon CEO Rich Williams.

Groupon is utilized by customers who receive email deals around four or five times a year and Williams sees a huge opportunity to transform Groupon by getting customers to view the site as a deal and lifestyle platform, potentially increasing usage to four or five times a week.

Rich Williams, Groupon CEO, discussed Groupon’s transformation plans with Jim Cramer on CNBC:

Groupon Announces a Business Model Transformation

The core of our plan is based on our marketplace model and concept. That’s moving us away from email and daily deals really to being a utility for consumers and merchants to use every single day to grow their businesses, in the case of merchants. In the case of consumers, a place where they trust when they’re hungry, when they’re bored, when they just want something to do on the weekend with their kids, we’re where they’re going to find the best prices, the best deals, and also the best selection and inventory of those transactable offers local markets.

I think people have a very narrow perspective of what a turnaround is. Most of that it’s like hey we need to cut some cost or we need to just tweak our product around the edges. When I say it’s a transformation, I think we have a good business today, we’re trying to build an amazing business. We have a good product today, we’re trying to build an amazing product. We’ve got to transform how we work the products we deliver to our customers, really fundamentally change how consumers think about us every day. That’s more than your typical turnaround has to attack and the good news is we’re well on our way.

Still a Huge Opportunity in Local

Local is a huge space and it’s a space that got a late start if you think about the online and mobile revolution that we’ve gone through over the last 15 or 20 years. Products started first with folks like Amazon in the late 90s. It wasn’t really until folks like Groupon and Yelp came into the mix late into the 2000s where you started to really get people to push. For sure locals late and it is a challenging space. I would say we’re producing billions of dollars of value coming out of the local space. We’ve grown our inventory and our relationships with small businesses by 60 percent over the last three years. We’re making headway and we see that as a massive prize that’s worth fighting for and we like our position in the market.

People use us four or five times a year currently. Our opportunity in local where you shop most of the time is four or five times a week. That’s what we’re building toward and those are the metrics to look at long-term where we have a lot of customers buying more frequently in a profitable way. I think we’re we’re wildly undervalued. We have strong free cash flow and we produce a lot of adjusted EBITDA that’s not reflected in our share price today and just shows that we have a lot of opportunity to grow that for folks over time.

December 4, 2018
Groupon Grabs $250M Investment, Comcast Partnership

Groupon announced that it has secured a new $250 million investment from independent private company Atairos, which supports growth-oriented businesses. Michael Angelakis, Chairman and CEO of Atairos, will also join Groupon’s Board of Directors.

Atairos laucnhed earlier this year with $4 billion in committed capital. It’s led by Angelakis, who is the former Vice Chairman and CFO of Comcast.

“We are excited to be partnering with Groupon, the undisputed global leader in hyper-local commerce with nearly 50 million active customers,” he said. “Since creating the market in 2008, Groupon has redefined local commerce by increasing consumer buying power and changing the way businesses attract customers using modern mobile technology. We look forward to working closely with Groupon’s Board and management team as they pursue their strategic growth objectives.”

Groupon CEO Rich Williams said, “Our partnership with Atairos will help accelerate our transformation while better positioning us to execute on our strategy and mission to build the daily habit in local commerce — which we continued to make progress on in the first quarter. I am extremely pleased that a respected, long-term oriented partner like Atairos shares our view about the vast opportunity ahead for Groupon.”

“The reputation, strategic insights and operational acumen of Michael and his team will be a welcome addition to our company,” added Groupon Chairman and co-founder Eric Lefkofsky. “Michael joins a talented and dedicated Board, and brings a valuable perspective as we continue to scale our local business.”

Comcast will actually now work with Groupon and “implement potential strategic partnership opportunities.” The plan is to use Groupon’s local expertise with Comcast’s subscriber and advertiser network, though the details are yet to be announced.

Groupon will use the investment for “general corporate purposes” including stock repurchasing and a $200 million increase to its existing share repurchase program, which has been extended through April 2018.

Groupon announced in late February that it had sold its billionth Groupon and released this infographic breaking down some stats:

Last month, the company announced new merchant tools including a new tablet app. More on these here.

Images via Groupon

April 4, 2016
Groupon Announces New Merchant Tools Including New Tablet App

Groupon announced new website, mobile, and tablet enhancements aimed at making it easier for merchants to create and manage Groupon marketing campaigns across devices.

These include redesigned web and mobile tools under the Groupon Merchant brand, as well as a new tablet app that lets users track and manage their Groupon campaigns and more self-service deal options.

The company says this provides merchants the ability to customize the structure and appearance of their promotion.

“We’ve seen first hand that local businesses can compete in an increasingly connected world and against online giants, and we’re focused on continuing to enable that competition,” said Aaron Cooper, SVP of North America Services at Groupon. “There is no one-size-fits-all approach to bringing in new customers, which is why we’re giving merchants every option they need to run a promotion with us in a way that’s the most advantageous for their business.”

“The new Groupon Merchant tablet app works in tandem with existing web and mobile tools so merchants can track and manage their Groupon campaigns across all of their devices,” the company said. “Businesses can use the app to redeem Groupons, monitor campaign performance, share positive feedback via social media and respond to customer service inquiries.”

The app can be downloaded from the App Store or Google Play.

Deal Builder users can now choose a customized discount, and merchants can now use their own images and descriptions.

Image via Groupon (BusinessWire)

March 15, 2016
Groupon Celebrates A Billion Deals With Stat-Heavy Infographic

Groupon just announced that it recently sold its billionth Groupon, which it says puts it in the “the same elite company as Apple, McDonalds, Uber, The Beatles and Elvis, among others.”

“One billion is a lot of Groupons!” a spokesperson for Groupon says. “223 miles of burgers stacked, which is equal to 1,946 Seattle Space Needles stacked on top of each other, 134 million bowling balls thrown, which is equal to the entire populations of California, Texas, Florida, New York, Illinois and Pennsylvania combined, etc.”

The billionth Gruopon sold was an $11 for $20 promotion for pizza and Italian food at Pirrone’s Pizzeria in the St. Louis area.

Here’s a look at the kinds of Groupons they’ve sold over the years:

As long as we’re reflecting on Groupon’s history, here’s a little something founder (and ousted CEO) Andrew Mason posted a few months ago that’s worth reading:

I wrote something about Groupon, called "Why root for Groupon?" https://t.co/sAQSI0Mjda

— Andrew Mason (@andrewmason) November 20, 2015

Images via Groupon

February 26, 2016
Groupon’s Snap Changes Direction

Back in 2014, Groupon launched an app called Snap, giving users cash back on certain products they buy at grocery stores. The concept was that you would go grocery shopping, then find participating items in the app, scan your receipts, and get cash back on applicable items.

It’s been a while since we’ve heard much about Snap, but Groupon announced some major changes in an email to users.

Beginning on March 1, Snap will start including Groupon’s inventory of roughly 70,000 digital offers at retailers in the U.S. and Canada.

The app is getting a fundamental change in its functionality. It’s moving from product-specific promotions to retailer-specific ones, and it’s dropping the cash back feature, which was essentially the whole point of its existence in the first place.

Customers who have an existing cash balance of $20 or more will be able to request a check. If it’s less than $20, on March 1, user will not be entitled to request a check, Groupon says, citing terms of the cash-back program. These users will, however, be getting an equivalent amount in promotional “Groupon Bucks” (rounded up to the nearest $5). These will expire in September.

Image via Groupon

February 15, 2016

Groupon’s ‘Stronger Than Expected’ Earnings Out

Groupon just reported its financials for Q4 with what the company calls “stronger than expected” results, including a record Black Friday and Cyber Monday period.

Revenue grew to $917.2 million from $883.2 million in the same quarter in 2014 (up 9% YoY). As the company notes, this is above guidance of $815-865 million and above consensus of $846 million.

Non-GAAP earnings per share was $0.04 in Q4 (above guidance of -$0.01 to $0.01) and consensus of $0.00.

In North America, the company saw its eighth consecutive quarter of double-digit growth. Billings grew 11% year-over-year while revenue grew 13% and units increased 12%. Active customers grew to 25.9 million and active deals increased to nearly 350,000 in North America. They added nearly 650,000 active customers in North America in Q4 – the most added in 5 quarters.

Worldwide, active customers grew 3% to 48.9 million while active deals grew 97% to about 650,000. This includes the addition of about 70,000 coupons.

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, 2015.

“2015 saw sustained progress toward our vision of making Groupon the daily habit in local commerce,” said CEO Rich Williams. “Following a stronger than expected fourth quarter, we enter 2016 with a continued focus on streamlining our global operations, reducing our reliance on low margin products in our shopping business and rekindling our customer acquisition efforts to set the stage for accelerated growth.”

Fourth Quarter 2015 Summary

Gross billings, which reflect the total dollar value of customer purchases of goods and services, was $1.71 billion in the fourth quarter 2015, compared with $1.72 billion in the fourth quarter 2014. Gross billings declined 1% globally, but grew 4% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter. On this F/X neutral basis, North America billings increased 11%, EMEA declined 2% and Rest of World declined 7%.

Revenue was $917.2 million in the fourth quarter 2015, compared with $883.2 million in the fourth quarter 2014. Revenue increased 4% globally, or 9% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter. On this F/X neutral basis, North America revenue increased 13%, EMEA increased 3% and Rest of World declined 8%.

Gross profit was $371.7 million in the fourth quarter 2015, compared with $378.1 million in the fourth quarter 2014. Gross profit declined 2% globally, but grew 4% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter.

Adjusted EBITDA, a non-GAAP financial measure, was $67.0 million in the fourth quarter 2015, compared with $92.9 millionin the fourth quarter 2014.

Net loss attributable to common stockholders was $46.5 million, or $0.08 per share. Non-GAAP earnings attributable to common stockholders was $23.3 million, or $0.04 per share.

Operating cash flow for the trailing twelve months ended December 31, 2015 was $292.1 million. Free cash flow, a non-GAAP financial measure, was $233.5 million in the fourth quarter 2015, bringing free cash flow for the trailing twelve months ended December 31, 2015 to $208.1 million.

Cash and cash equivalents as of December 31, 2015 was $853.4 million and we had no outstanding borrowings under our revolving credit facility.

Full Year 2015 Summary

Gross billings was $6.3 billion in 2015, compared with $6.2 billion in 2014. Gross billings was approximately flat, but grew 8% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the year. On this F/X neutral basis, North America billings increased 12%, EMEA increased 3% and Rest of World was approximately flat.

Revenue was $3.1 billion in 2015, compared with $3.0 billion in 2014. Revenue grew 3% globally, or 9% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the year. On this F/X neutral basis,North America revenue increased 12%, EMEA increased 7% and Rest of World declined 6%.

Gross profit was $1.4 billion in 2015, compared with $1.5 billion in 2014. Gross profit declined 5%, but grew 2% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the year.

Adjusted EBITDA was $256.8 million in 2015, compared with $262.3 million in 2014.

Net earnings attributable to common stockholders were $20.7 million, or $0.03 per share. Earnings per share includes $0.19from discontinued operations, which was driven by the gain on our sale of a controlling stake in Ticket Monster. Non-GAAP earnings attributable to common stockholders was $91.0 million, or $0.14 per share.

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

Highlights

Units: Global units, defined as vouchers and products sold before cancellations and refunds, were approximately flat year-over-year at 62 million for the fourth quarter 2015. North America units increased 12%, EMEA units declined 3% and Rest of World units declined 31%.

Active deals: At the end of the fourth quarter 2015, on average, active deals were approximately 650,000 globally, with nearly 350,000 in North America. Both include approximately 70,000 Coupons.

Active customers: Active customers, or customers that have purchased a voucher or product within the last twelve months, grew 3% year-over-year, to 48.9 million as of December 31, 2015, comprising 25.9 million in North America, 15.4 million in EMEA, and 7.6 million in Rest of World.

Customer spend: Fourth quarter 2015 trailing twelve month billings per average active customer was $130, compared with$137 in the fourth quarter 2014.

Share Repurchase

During the fourth quarter 2015, Groupon repurchased 35,326,954 shares of its Class A common stock for an aggregate purchase price of $112.5 million, as of December 31, 2015. Up to $156.8 million of Class A common stock remained available for repurchase under Groupon’s share repurchase program through August 2017. The timing and amount of any share repurchases are determined based on market conditions, share price and other factors, and the programs may be discontinued or suspended at any time.

Outlook

Groupon’s outlook for 2016 reflects current foreign exchange rates, as well as expected marketing investments, continued progress on increasing Shopping margins, and a reduction of our international footprint. We continue to expect revenue of between $2.75 and $3.05 billion for the full year, and we are increasing the company’s expected 2016 adjusted EBITDA range to between $80 million and $130 million. Moving forward, we are only providing annual Revenue and adjusted EBITDA guidance, which we will update quarterly.

Conference Call

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

Groupon encourages investors to use its investor relations website as a way of easily finding information about the company.Groupon promptly makes available on this website, free of charge, the reports that the company files or furnishes with the SEC, corporate governance information (including Groupon’s Global Code of Conduct), and select press releases and social media postings. Groupon uses its investor relations site (investor.groupon.com) and its blog (https://www.groupon.com/blog) as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Non-GAAP Financial Measures

In addition to financial results reported in accordance with U.S. generally accepted accounting principles (U.S. GAAP), we have provided the following non-GAAP financial measures in this release and the accompanying tables: foreign exchange rate neutral operating results, adjusted EBITDA, non-GAAP net income attributable to common stockholders, non-GAAP earnings per share and free cash flow. These non-GAAP financial measures, which are presented on a continuing operations basis, are intended to aid investors in better understanding Groupon’s current financial performance and its prospects for the future as seen through the eyes of management. We believe that these non-GAAP financial measures facilitate comparisons with our historical results and with the results of peer companies who present similar measures (although other companies may define non-GAAP measures differently than we define them, even when similar terms are used to identify such measures). However, non-GAAP financial measures are not intended to be a substitute for those reported in accordance with U.S. GAAP. For reconciliations of these measures to the most applicable financial measures under U.S. GAAP, see ”Non-GAAP Reconciliation Schedules” and ”Supplemental Financial Information and Business Metrics” included in the tables accompanying this release.

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

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

Acquisition-related expense (benefit), net. Acquisition-related expense (benefit), net is comprised of the change in the fair value of contingent consideration arrangements and external transaction costs related to business combinations, primarily consisting of legal and advisory fees. The composition of our contingent consideration arrangements and the impact of those arrangements on our operating results vary over time based on a number of factors, including the terms of our business combinations and the timing of those transactions. We exclude acquisition-related expense (benefit), net because we believe that non-GAAP financial measures excluding this item provide meaningful supplemental information about our operating performance and facilitate comparisons to our historical operating results.

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

Interest and Other Non-Operating Items. Interest and other non-operating items include: interest income, interest expense, gains and losses related to minority investments, and foreign currency gains and losses. We exclude interest and other non-operating items from certain of our non-GAAP financial measures because we believe that excluding these items provides meaningful supplemental information about our core operating performance and facilitates comparisons to our historical operating results.

Items That Are Unusual in Nature or Infrequently Occurring. During the twelve months ended December 31, 2015, items that we believe to be unusual in nature or infrequently occurring were (a) charges related to our restructuring program, (b) the gain on our disposition of Groupon India, (c) the write-off of a prepaid asset related to a marketing program that was discontinued because the counterparty ceased operations and (d) the expense related to a significant increase in the contingent liability for our securities litigation matter. We exclude items that are unusual in nature or infrequently occurring because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons to our historical results.

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 prior-year period. We present foreign exchange rate neutral information to facilitate comparisons to our historical operating results.

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

Non-GAAP net income (loss) attributable to common stockholders and non-GAAP earnings (loss) per share adjust our net income (loss) attributable to common stockholders and earnings (loss) per share to exclude the impact of:

stock-based compensation,

amortization of acquired intangible assets,

acquisition-related expense (benefit), net,

items that are unusual in nature or infrequently occurring,

non-operating foreign currency gains and losses related to intercompany balances and reclassifications of cumulative translation adjustments to earnings as a result of business dispositions or country exits,

non-operating gains and losses from minority investments that we have elected to record at fair value with changes in fair value reported in earnings,

income (loss) from discontinued operations and

the income tax effect of those items.

We believe that excluding these items from our measures of non-GAAP net income (loss) attributable to common stockholders and non-GAAP earnings (loss) per share provides useful supplemental information for evaluating our operating performance and facilitates comparisons to our historical results by eliminating items that are non-cash in nature, relate to discrete events or are otherwise not indicative of the core operating performance of our ongoing business.

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

Note on Forward-Looking Statements

The statements contained in this release that refer to plans and expectations for the next quarter, the full year or the future are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve a number of risks and uncertainties, and actual results could differ materially from those discussed. The words ”may,” will,” should,” ”could,” ”expect,” anticipate,” ”believe,” ”estimate,” intend,” ”continue” and other similar expressions are intended to identify forward-looking statements. The risks and uncertainties that could cause our results to differ materially from those included in the forward-looking statements include, but are not limited to, volatility in our revenue and operating results; risks related to our business strategy, including our strategy to grow our local marketplaces, marketing strategy and spend and the productivity of those marketing investments and the impact of our shift away from lower margin products in our Goods category; effectively dealing with challenges arising from our international operations, including fluctuations in currency exchange rates; retaining existing customers and adding new customers, including as we increase our marketing spend and shift away from lower margin products in our Goods category; retaining and adding high quality merchants; cyber security breaches; incurring expenses as we expand our business; competing successfully in our industry; maintaining favorable payment terms with our business partners; providing a strong mobile experience for our customers; delivery and routing of our emails; product liability claims; managing inventory and order fulfillment risks; integrating our technology platforms; litigation; managing refund risks; retaining, attracting and integrating members of our executive team; difficulties, delays or our inability to successfully complete all or part of the announced restructuring actions or to realize the operating efficiencies and other benefits of such restructuring actions; higher than anticipated restructuring charges or changes in the timing of such restructuring charges; completing and realizing the anticipated benefits from acquisitions, dispositions, joint ventures and strategic investments; tax liabilities; tax legislation; compliance with domestic and foreign laws and regulations, including the CARD Act and regulation of the Internet and e-commerce; classification of our independent contractors; maintaining our information technology infrastructure; protecting our intellectual property; maintaining a strong brand; seasonality; customer and merchant fraud; payment-related risks; our ability to raise capital if necessary and our outstanding indebtedness; global economic uncertainty; the impact of our ongoing strategic review and any potential strategic alternatives we may choose to pursue. For additional information regarding these and other risks and uncertainties, we urge you to refer to the factors included under the headings ”Risk Factors” and ”Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s Annual Report on Form 10-K for the ended December 31, 2015 and our other filings with the Securities and Exchange Commission, 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 11, 2016. Groupon undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in its expectations.

About Groupon

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

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

Groupon, Inc.

Summary Consolidated and Segment Results

(in thousands, except share and per share amounts)

(unaudited)

The financial results of Ticket Monster, including the gain on disposition and related tax effects, are presented as discontinued operations in the accompanying condensed consolidated financial statements and tables for the three months and year endedDecember 31, 2015. Additionally, the assets and liabilities of Ticket Monster are presented as held for sale in the accompanying condensed consolidated balance sheet as of December 31, 2014. All prior period financial information and operational metrics have been retrospectively adjusted to reflect this presentation.

Three Months Ended Year Ended

December 31, December 31,

Y/Y % Growth Y/Y % Growth

FX Effect excluding FX Effect excluding

2015 2014 Y/Y % Growth ⁽²⁾ FX ⁽²⁾ 2015 2014 Y/Y % Growth ⁽²⁾ FX ⁽²⁾

Gross Billings⁽¹⁾:

North America $ 1,050,361 $ 948,579 10.7 % $ (1,511 ) 10.9 % $ 3,709,797 $ 3,303,479 12.3 % $ (5,415 ) 12.5 %

EMEA 487,147 560,541 (13.1 ) (61,482 ) (2.1 ) 1,794,354 2,046,807 (12.3 ) (317,640 ) 3.2

Rest of World 169,484 215,549 (21.4 ) (31,574 ) (6.7 ) 751,389 887,546 (15.3 ) (132,679 ) (0.4 )

Consolidated gross billings $ 1,706,992 $ 1,724,669 (1.0 ) % $ (94,567 ) 4.5 % $ 6,255,540 $ 6,237,832 0.3 % $ (455,734 ) 7.6 %

Revenue:

North America $ 622,647 $ 550,974 13.0 % $ (408 ) 13.1 % $ 2,047,742 $ 1,824,461 12.2 % $ (1,351 ) 12.3 %

EMEA 248,326 272,475 (8.9 ) (33,198 ) 3.3 867,880 961,130 (9.7 ) (157,892 ) 6.7

Rest of World 46,197 59,779 (22.7 ) (8,785 ) (8.0 ) 203,894 256,532 (20.5 ) (36,932 ) (6.1 )

Consolidated revenue $ 917,170 $ 883,228 3.8 % $ (42,391 ) 8.6 % $ 3,119,516 $ 3,042,123 2.5 % $ (196,175 ) 9.0 %

Income (loss) from operations $ (5,423 ) $ 33,640 (116.1 ) % $ (2,742 ) (108.0 ) % $ (79,777 ) $ 30,701 (359.9 ) % $ (2,064 ) (353.1 ) %

Income (loss) from continuing operations (32,552 ) 26,566 (89,171 ) (18,473 )

Income (loss) from discontinued operations, net of tax ⁽³⁾ (10,613 ) (15,182 ) 122,850 (45,446 )

Net income (loss) attributable toGroupon, Inc. $ (46,528 ) $ 8,788 $ 20,668 $ (73,090 )

Basic net income (loss) per share:

Continuing operations $ (0.06 ) $ 0.04 $ (0.16 ) $ (0.04 )

Discontinued operations (0.02 ) (0.03 ) 0.19 (0.07 )

Basic net income (loss) per share $ (0.08 ) $ 0.01 $ 0.03 $ (0.11 )

Diluted net income (loss) per share:

Continuing operations $ (0.06 ) $ 0.04 $ (0.16 ) $ (0.04 )

Discontinued operations (0.02 ) (0.03 ) 0.19 (0.07 )

Diluted net income (loss) per share $ (0.08 ) $ 0.01 $ 0.03 $ (0.11 )

Weighted average number of shares outstanding

Basic 607,517,010 671,885,967 650,106,225 674,832,393

Diluted 607,517,010 681,543,847 650,106,225 674,832,393

⁽¹⁾ Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.

⁽²⁾ Represents the change in financial measures that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three months and year ended December 31, 2014.

⁽³⁾ The $10.6 million loss presented within income (loss) from discontinued operations, net of tax, for the three months endedDecember 31, 2015 represents additional income tax expense attributed to discontinued operations, which resulted from the valuation allowance that was recognized during the period against the Company’s net deferred tax assets in the United States.

Groupon, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three Months Ended December 31, Year Ended December 31,

2015 2014 2015 2014

Operating activities

Net income (loss) $ (43,165 ) $ 11,384 $ 33,679 $ (63,919 )

Less: Income (loss) from discontinued operations, net of tax (10,613 ) (15,182 ) 122,850 (45,446 )

Income (loss) from continuing operations (32,552 ) 26,566 (89,171 ) (18,473 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization of property, equipment and software 28,807 25,414 113,048 94,145

Amortization of acquired intangible assets 4,956 4,708 19,922 20,896

Stock-based compensation 32,865 29,961 142,069 115,290

Restructuring-related long-lived asset impairments 6,922 — 7,267 —

Gain on disposition of business — — (13,710 ) —

Deferred income taxes 6,267 (9,168 ) (8,985 ) (11,124 )

Excess tax benefits on stock-based compensation (1,431 ) (3,407 ) (7,629 ) (15,980 )

Loss on equity method investments — — — 459

Gain (loss) from changes in fair value of contingent consideration 508 (1,385 ) 240 (2,444 )

Loss from changes in fair value of investments 829 — 2,943 —

Impairments of investments — — — 2,036

Change in assets and liabilities, net of acquisitions:

Restricted cash 75 (491 ) 4,630 7,195

Accounts receivable 6,960 10,280 13,313 (16,277 )

Prepaid expenses and other current assets 61,358 36,816 21,545 13,933

Accounts payable 9,545 (1,073 ) 8,601 (14,046 )

Accrued merchant and supplier payables 142,069 155,991 40,217 54,921

Accrued expenses and other current liabilities (1,174 ) 11,117 56,040 (9,986 )

Other, net (16,980 ) (12,057 ) (18,222 ) 31,952

Net cash provided by (used in) operating activities from continuing operations 249,024 273,272 292,118 252,497

Net cash provided by (used in) operating activities from discontinued operations (670 ) 13,550 (37,248 ) 36,327

Net cash provided by (used in) operating activities 248,354 286,822 254,870 288,824

Net cash provided by (used in) investing activities from continuing operations (31,238 ) (35,175 ) (177,250 ) (152,818 )

Net cash provided by (used in) investing activities from discontinued operations — (714 ) 244,470 (76,638 )

Net cash provided by (used in) investing activities (31,238 ) (35,889 ) 67,220 (229,456 )

Net cash provided by (used in) financing activities (322,166 ) (21,088 ) (508,156 ) (194,156 )

Effect of exchange rate changes on cash and cash equivalents, including cash classified within current assets held for sale (5,147 ) (13,100 ) (32,485 ) (33,771 )

Net increase (decrease) in cash and cash equivalents, including cash classified within current assets held for sale (110,197 ) 216,745 (218,551 ) (168,559 )

Less: Net increase (decrease) in cash classified within current assets held for sale — 11,955 (55,279 ) 55,279

Net increase (decrease) in cash and cash equivalents (110,197 ) 204,790 (163,272 ) (223,838 )

Cash and cash equivalents, beginning of period 963,559 811,844 1,016,634 1,240,472

Cash and cash equivalents, end of period $ 853,362 $ 1,016,634 $ 853,362 $ 1,016,634

Groupon, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(unaudited)

Three Months EndedDecember 31, Year Ended December 31,

2015 2014 2015 2014

Revenue:

Third party and other $ 345,260 $ 367,902 $ 1,372,533 $ 1,501,011

Direct 571,910 515,326 1,746,983 1,541,112

Total revenue 917,170 883,228 3,119,516 3,042,123

Cost of revenue:

Third party and other 43,640 49,725 188,932 203,058

Direct 501,790 455,394 1,545,519 1,373,756

Total cost of revenue 545,430 505,119 1,734,451 1,576,814

Gross profit 371,740 378,109 1,385,065 1,465,309

Operating expenses:

Marketing 83,208 59,812 254,335 241,954

Selling, general and administrative 287,976 285,466 1,192,792 1,191,385

Restructuring charges 5,422 — 29,568 —

Gain on disposition of business — — (13,710 ) —

Acquisition-related expense (benefit), net 557 (809 ) 1,857 1,269

Total operating expenses 377,163 344,469 1,464,842 1,434,608

Income (loss) from operations (5,423 ) 33,640 (79,777 ) 30,701

Other income (expense), net ⁽¹⁾ (3,393 ) (11,531 ) (28,539 ) (33,450 )

Income (loss) from continuing operations before provision (benefit) for income taxes (8,816 ) 22,109 (108,316 ) (2,749 )

Provision (benefit) for income taxes 23,736 (4,457 ) (19,145 ) 15,724

Income (loss) from continuing operations (32,552 ) 26,566 (89,171 ) (18,473 )

Income (loss) from discontinued operations, net of tax (10,613 ) (15,182 ) 122,850 (45,446 )

Net income (loss) (43,165 ) 11,384 33,679 (63,919 )

Net income (loss) attributable to noncontrolling interests (3,363 ) (2,596 ) (13,011 ) (9,171 )

Net income (loss) attributable to Groupon, Inc. $ (46,528 ) $ 8,788 $ 20,668 $ (73,090 )

Basic net income (loss) per share:

Continuing operations $ (0.06 ) $ 0.04 $ (0.16 ) $ (0.04 )

Discontinued operations (0.02 ) (0.03 ) 0.19 (0.07 )

Basic net income (loss) per share $ (0.08 ) $ 0.01 $ 0.03 $ (0.11 )

Diluted net income (loss) per share:

Continuing operations $ (0.06 ) $ 0.04 $ (0.16 ) $ (0.04 )

Discontinued operations (0.02 ) (0.03 ) 0.19 (0.07 )

Diluted net income (loss) per share $ (0.08 ) $ 0.01 $ 0.03 $ (0.11 )

Weighted average number of shares outstanding

Basic 607,517,010 671,885,967 650,106,225 674,832,393

Diluted 607,517,010 681,543,847 650,106,225 674,832,393

⁽¹⁾ Other income (expense), net includes foreign currency losses of $1.7 million and $11.4 million for the three months endedDecember 31, 2015 and 2014, respectively, and foreign currency losses of $23.8 million and $31.5 million for the year endedDecember 31, 2015 and 2014, respectively.

Groupon, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

December 31,

2015 2014

Assets

Current assets:

Cash and cash equivalents $ 853,362 $ 1,016,634

Accounts receivable, net 68,175 90,597

Prepaid expenses and other current assets 153,705 192,382

Current assets held for sale — 85,445

Total current assets 1,075,242 1,385,058

Property, equipment and software, net 198,897 176,004

Goodwill 287,332 236,756

Intangible assets, net 36,483 30,609

Investments (including $163.7 million and $7.4 million at December 31, 2015 and December 31, 2014, respectively, at fair value) 178,236 24,298

Deferred income taxes 3,454 57,594

Other non-current assets 16,620 16,173

Non-current assets held for sale — 301,105

Total Assets $ 1,796,264 $ 2,227,597

Liabilities and Equity

Current liabilities:

Accounts payable $ 24,590 $ 13,822

Accrued merchant and supplier payables 776,211 772,156

Accrued expenses and other current liabilities 402,724 341,381

Current liabilities held for sale — 166,239

Total current liabilities 1,203,525 1,293,598

Deferred income taxes 8,612 32,771

Other non-current liabilities 113,540 129,531

Non-current liabilities held for sale — 6,753

Total Liabilities 1,325,677 1,462,653

Commitments and contingencies (see Note 10)

Stockholders’ Equity

Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized, 717,387,446 shares issued and 588,919,281 shares outstanding at December 31, 2015 and 699,008,084 shares issued and 671,768,980 shares outstanding at December 31, 2014 72 70

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, 2015 and December 31, 2014 — —

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

Additional paid-in capital 1,964,453 1,847,420

Treasury stock, at cost, 128,468,165 shares at December 31, 2015 and 27,239,104 shares atDecember 31, 2014 (645,041 ) (198,467 )

Accumulated deficit (901,292 ) (921,960 )

Accumulated other comprehensive income (loss) 51,206 35,763

Total Groupon, Inc. Stockholders’ Equity 469,398 762,826

Noncontrolling interests 1,189 2,118

Total Equity 470,587 764,944

Total Liabilities and Equity $ 1,796,264 $ 2,227,597

Groupon, Inc.

Segment Information

(in thousands)

(unaudited)

Three Months Ended December 31, Year Ended December 31,

2015 2014 2015 2014

North America

Gross billings ⁽¹⁾ $ 1,050,361 $ 948,579 $ 3,709,797 $ 3,303,479

Revenue 622,647 550,974 2,047,742 1,824,461

Segment cost of revenue and operating expenses ^(2)(3)(4) 625,171 520,140 2,029,643 1,755,113

Segment operating income (loss) ⁽²⁾ $ (2,524 ) $ 30,834 $ 18,099 $ 69,348

Segment operating income (loss) as a percent of segment gross billings (0.2 )% 3.3 % 0.5 % 2.1 %

Segment operating income (loss) as a percent of segment revenue (0.4 )% 5.6 % 0.9 % 3.8 %

EMEA

Gross billings ⁽¹⁾ $ 487,147 $ 560,541 $ 1,794,354 $ 2,046,807

Revenue 248,326 272,475 867,880 961,130

Segment cost of revenue and operating expenses ^(2)(4)(5) 211,443 237,468 797,786 857,062

Segment operating income ⁽²⁾ $ 36,883 $ 35,007 $ 70,094 $ 104,068

Segment operating income as a percent of segment gross billings 7.6 % 6.2 % 3.9 % 5.1 %

Segment operating income as a percent of segment revenue 14.9 % 12.8 % 8.1 % 10.8 %

Rest of World

Gross billings ⁽¹⁾ $ 169,484 $ 215,549 $ 751,389 $ 887,546

Revenue 46,197 59,779 203,894 256,532

Segment cost of revenue and operating expenses ⁽²⁾⁽⁴⁾ 52,731 62,828 228,273 282,688

Segment operating loss ⁽²⁾ $ (6,534 ) $ (3,049 ) $ (24,379 ) $ (26,156 )

Segment operating loss as a percent of segment gross billings (3.9 )% (1.4 )% (3.2 )% (2.9 )%

Segment operating loss as a percent of segment revenue (14.1 )% (5.1 )% (12.0 )% (10.2 )%

⁽¹⁾ Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.

⁽²⁾ Segment cost of revenue and operating expenses and segment operating income (loss) exclude stock-based compensation and acquisition-related expense (benefit), net.

⁽³⁾ Segment cost of revenue and operating expenses for North America for the year ended December 31, 2015 includes a $37.5 million expense related to an increase in the Company’s contingent liability for its securities litigation matter.

⁽⁴⁾ Segment cost of revenue and operating expenses for the three months ended December 31, 2015 includes restructuring charges (credits) of $9.1 million in North America, $(3.6) million in EMEA and $(0.1) million in Rest of World. Segment cost of revenue and operating expenses for the year ended December 31, 2015 includes restructuring charges of $10.5 million inNorth America, $16.1 million in EMEA and $3.0 million in Rest of World.

⁽⁵⁾ Segment cost of revenue and operating expenses for EMEA for the year ended December 31, 2015 includes a $6.7 millionexpense for the write-off of a prepaid asset related to a marketing program that was discontinued because the counterparty ceased operations.

Groupon, Inc.

Non-GAAP Reconciliation Schedules

(in thousands, except share and per share amounts)

(unaudited)

Adjusted EBITDA, non-GAAP earnings attributable to common stockholders and non-GAAP earnings per share are non-GAAP financial measures. The Company reconciles Adjusted EBITDA to the most comparable U.S. GAAP financial measure, “Net income (loss) from continuing operations” for the periods presented and the Company reconciles non-GAAP earnings per share to the most comparable U.S. GAAP financial measure, “Diluted net income (loss) per share,” for the periods presented.

The following is a quarterly reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, “Income (loss) from continuing operations.”

Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

Income (loss) from continuing operations $ 26,566 $ (16,739) $ (15,267) $ (24,613) $ (32,552)

Adjustments:

Stock-based compensation ⁽¹⁾ 29,961 35,144 38,467 35,432 32,691

Depreciation and amortization 30,122 32,200 31,372 35,635 33,763

Acquisition-related expense (benefit), net (809) (269) 505 1,064 557

Restructuring charges — — — 24,146 5,422

Gain on disposition of business — — — (13,710) —

Prepaid marketing write-off — — — 6,690 —

Securities litigation expense — — — 37,500 —

Non-operating expense (income), net 11,531 19,927 (2,941) 8,160 3,393

Provision (benefit) for income taxes (4,457) 2,107 8,982 (53,970) 23,736

Total adjustments 66,348 89,109 76,385 80,947 99,562

Adjusted EBITDA $ 92,914 $ 72,370 $ 61,118 $ 56,334 $ 67,010

⁽¹⁾ Includes stock-based compensation recorded within cost of revenue, marketing expense, and selling, general and administrative expense. Non-operating expense (income), net, includes $0.02 million, $0.1 million and $0.2 million of additional stock-based compensation for the three months ended June 30, 2015, three months ended September 30, 2015and three months ended December 31, 2015, respectively.

The following is a reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, “Net income (loss) from continuing operations” for the years ended December 31, 2015 and 2014:

Year Ended December 31,

2015 2014

Income (loss) from continuing operations $ (89,171 ) $ (18,473 )

Adjustments:

Stock-based compensation ⁽¹⁾ 141,734 115,290

Depreciation and amortization 132,970 115,041

Acquisition-related expense (benefit), net 1,857 1,269

Restructuring charges 29,568 —

Gain on disposition of business (13,710 ) —

Prepaid marketing write-off 6,690 —

Securities litigation expense 37,500 —

Non-operating expense (income), net 28,539 33,450

Provision (benefit) for income taxes (19,145 ) 15,724

Total adjustments 346,003 280,774

Adjusted EBITDA $ 256,832 $ 262,301

⁽¹⁾ Includes stock-based compensation recorded within cost of revenue, marketing expense, and selling, general and administrative expense. Non-operating expense (income), net, includes $0.3 million of additional stock-based compensation for the year ended December 31, 2015.

The following is a reconciliation of net income (loss) attributable to common stockholders to non-GAAP net income (loss) attributable to common stockholders and a reconciliation of diluted net income (loss) per share to non-GAAP net income (loss) per share for the three months and year ended December 31, 2015:

Three Months Ended Year Ended

December 31, 2015 December 31, 2015

Net income (loss) attributable to common stockholders $ (46,528 ) $ 20,668

Stock-based compensation 32,865 142,069

Amortization of acquired intangible assets 4,956 19,922

Acquisition-related expense (benefit), net 557 1,857

Restructuring charges 5,422 29,568

Gain on disposition of business — (13,710 )

Prepaid marketing write-off — 6,690

Securities litigation expense — 37,500

Intercompany foreign currency losses (gains) and reclassifications of translation adjustments to earnings⁽¹⁾ (400 ) 20,266

Loss from changes in fair value of investments 829 2,943

Income tax effect of above adjustments 14,979 (53,953 )

Loss (income) from discontinued operations, net of tax 10,613 (122,850 )

Non-GAAP net income (loss) attributable to common stockholders $ 23,293 $ 90,970

Diluted shares 607,517,010 650,106,225

Incremental diluted shares 6,367,291 6,854,909

Adjusted diluted shares 613,884,301 656,961,134

Diluted net income (loss) per share ⁽²⁾ $ (0.08 ) $ 0.03

Impact of stock-based compensation, amortization of acquired intangible assets, acquisition-related expense (benefit), net, intercompany foreign currency losses (gains), items that are unusual in nature and infrequently occurring, income (loss) from discontinued operations and related tax effects 0.12 0.11

Non-GAAP net income (loss) per share $ 0.04 $ 0.14

⁽¹⁾ For the three months and year ended December 31, 2015, a $3.7 million net cumulative translation adjustment gain was reclassified to earnings as a result of the Company’s exit from certain countries as part of its restructuring plan. For the year ended December 31, 2015, a $4.4 million loss related to the cumulative translation adjustment from the Company’s legacy business in the Republic of Korea was reclassified to earnings as a result of the Ticket Monster disposition.

⁽²⁾ The sum of per share amounts for quarterly periods may not equal year-to-date amounts due to rounding.

Foreign exchange rate neutral operating results are non-GAAP financial measures. The Company reconciles foreign exchange rate neutral operating results to the most comparable U.S. GAAP financial measures, “Gross billings,” “Revenue” and “Income (loss) from continuing operations,” respectively, for the periods presented. The Company reconciles “foreign exchange rate neutral Gross billings growth” and “foreign exchange rate neutral Revenue growth” to year-over-year growth rates for the most comparable U.S. GAAP financial measures, “Gross billings growth” and “Revenue growth,” respectively, for the periods presented.

The effect on the Company’s gross billings, revenue and income (loss) from changes in exchange rates versus the U.S. Dollar for the three months ended December 31, 2015 was as follows:

Three Months Ended December 31, 2015 Three Months Ended December 31, 2015

At Avg. Q4 2014 Exchange Rate As At Avg. Q3 2015 Exchange Rate As

Rates ⁽¹⁾ Effect ⁽²⁾ Reported Rates ⁽³⁾ Effect ⁽²⁾ Reported

Gross billings $ 1,801,559 $ (94,567 ) $ 1,706,992 $ 1,721,580 $ (14,588 ) $ 1,706,992

Revenue 959,561 (42,391 ) 917,170 923,903 (6,733 ) 917,170

Income (loss) from operations $ (2,681 ) $ (2,742 ) $ (5,423 ) $ (4,620 ) $ (803 ) $ (5,423 )

The effect on the Company’s gross billings, revenue and income (loss) from operations from changes in exchange rates versus theU.S. Dollar for the year ended December 31, 2015 was as follows:

Year Ended December 31, 2015 Year Ended December 31, 2015

At Avg. Q4 At Avg. Q4’14-

2014 YTD Exchange Rate As Q3’15 Exchange Rate As

Rates ⁽¹⁾ Effect ⁽²⁾ Reported Rates ⁽³⁾ Effect ⁽²⁾ Reported

Gross billings $ 6,711,274 $ (455,734 ) $ 6,255,540 $ 6,346,012 $ (90,472 ) $ 6,255,540

Revenue 3,315,691 (196,175 ) 3,119,516 3,158,228 (38,712 ) 3,119,516

Income (loss) from operations $ (77,713 ) $ (2,064 ) $ (79,777 ) $ (78,679 ) $ (1,098 ) $ (79,777 )

⁽¹⁾ Represents the financial statement balances that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three months and year ended December 31, 2014.

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

⁽³⁾ Represents the financial statement balances that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three and twelve months ended September 30, 2015.

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.

Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

EMEA Gross billings growth, excluding FX 8 % 7 % 9 % (1 ) % (2 ) %

FX Effect (9 ) (18 ) (19 ) (14 ) (11 )

EMEA Gross billings growth (1 ) % (11 ) % (10 ) % (15 ) % (13 ) %

Rest of World Gross billings growth, excluding FX — % (1 ) % 6 % — % (7 ) %

FX Effect (10 ) (11 ) (15 ) (19 ) (14 )

Rest of World Gross billings growth (10 ) % (12 ) % (9 ) % (19 ) % (21 ) %

Consolidated Gross billings growth, excluding FX 13 % 10 % 10 % 6 % 4 %

FX Effect (5 ) (8 ) (8 ) (8 ) (5 )

Consolidated Gross billings growth 8 % 2 % 2 % (2 ) % (1 ) %

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.

Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

EMEA Revenue growth, excluding FX 18 % 13 % 9 % 2 % 3 %

FX Effect (10 ) (19 ) (19 ) (15 ) (12 )

EMEA Revenue growth 8 % (6 ) % (10 ) % (13 ) % (9 ) %

Rest of World Revenue growth, excluding FX (9 ) % (8 ) % (4 ) % (5 ) % (8 ) %

FX Effect (10 ) (10 ) (14 ) (18 ) (15 )

Rest of World Revenue growth (19 ) % (18 ) % (18 ) % (23 ) % (23 ) %

Consolidated Revenue growth, excluding FX 19 % 10 % 11 % 7 % 9 %

FX Effect (4 ) (7 ) (8 ) (7 ) (5 )

Consolidated Revenue growth 15 % 3 % 3 % — % 4 %

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

Exchange

At Avg. Q4 Rate December 31, 2015 December 31, 2014 Y/Y % Y/Y% Growth

2014 Rates ⁽¹⁾ Effect ⁽²⁾ As Reported As Reported Growth excluding FX

Local:

Third party and other $ 532,015 $ (861 ) $ 531,154 $ 499,250 6.4 % 6.6 %

Travel:

Third party 89,589 (200 ) 89,389 80,296 11.3 % 11.6 %

Total services 621,604 (1,061 ) 620,543 579,546 7.1 % 7.3 %

Goods:

Third party 13,401 (450 ) 12,951 8,277 56.5 % 61.9 %

Direct 416,867 — 416,867 360,756 15.6 15.6

Total 430,268 (450 ) 429,818 369,033 16.5 % 16.6

Total gross billings $ 1,051,872 $ (1,511 ) $ 1,050,361 $ 948,579 10.7 % 10.9 %

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

Exchange

At Avg. Q4 Rate December 31, 2015 December 31, 2014 Y/Y % Y/Y% Growth

2014 Rates ⁽¹⁾ Effect ⁽²⁾ As Reported As Reported Growth excluding FX

Local:

Third party and other $ 219,817 $ (22,372 ) $ 197,445 $ 242,119 (18.5 ) % (9.2 ) %

Travel:

Third party 68,439 $ (8,603 ) 59,836 72,710 (17.7 ) % (5.9 ) %

Total services 288,256 (30,975 ) 257,281 314,829 (18.3 ) % (8.4 ) %

Goods:

Third party 92,612 (9,317 ) 83,295 99,710 (16.5 ) % (7.1 ) %

Direct 167,761 (21,190 ) 146,571 146,002 0.4 14.9

Total 260,373 (30,507 ) 229,866 245,712 (6.4 ) % 6.0 %

Total gross billings $ 548,629 $ (61,482 ) $ 487,147 $ 560,541 (13.1 ) % (2.1 ) %

The effect on Rest of World’s gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended December 31, 2015 was as follows:

Exchange

At Avg. Q4 Rate December 31, 2015 December 31, 2014 Y/Y % Y/Y% Growth

2014 Rates ⁽¹⁾ Effect ⁽²⁾ As Reported As Reported Growth excluding FX

Local:

Third party and other $ 99,590 $ (16,160 ) $ 83,430 $ 105,420 (20.9 ) % (5.5 ) %

Travel:

Third party 31,010 $ (5,641 ) 25,369 32,313 (21.5 ) % (4.0 ) %

Total services 130,600 (21,801 ) 108,799 137,733 (21.0 ) % (5.2 ) %

Goods:

Third party 60,357 (8,144 ) 52,213 69,248 (24.6 ) % (12.8 ) %

Direct 10,101 (1,629 ) 8,472 8,568 (1.1 ) 17.9

Total 70,458 (9,773 ) 60,685 77,816 (22.0 ) % (9.5 ) %

Total gross billings $ 201,058 $ (31,574 ) $ 169,484 $ 215,549 (21.4 ) % (6.7 ) %

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

Exchange

At Avg. Q4 Rate December 31, 2015 December 31, 2014 Y/Y % Y/Y% Growth

2014 Rates ⁽¹⁾ Effect ⁽²⁾ As Reported As Reported Growth excluding FX

Local:

Third party and other $ 851,422 $ (39,393) $ 812,029 $ 846,789 (4.1) % 0.5 %

Travel:

Third party $ 189,038 $ (14,444) 174,594 185,319 (5.8) % 2.0 %

Total services 1,040,460 (53,837) 986,623 1,032,108 (4.4) % 0.8 %

Goods:

Third party 166,370 (17,911) 148,459 177,235 (16.2) % (6.1) %

Direct 594,729 (22,819) 571,910 515,326 11.0 15.4

Total 761,099 (40,730) 720,369 692,561 4.0 % 9.9 %

Total gross billings $ 1,801,559 $ (94,567) $ 1,706,992 $ 1,724,669 (1.0) % 4.5 %

⁽¹⁾ Represents the financial statement balances that would have resulted had average exchange rates in the reporting period been the same as those in effect during the three months ended December 31, 2014.

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

Groupon, Inc.

Supplemental Financial Information and Business Metrics ^{(9) (10)}

(financial data in thousands; active customers in millions)

(unaudited)

Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

Segments

North America Segment:

Gross Billings ⁽¹⁾:

Local ⁽²⁾Gross Billings $ 499,250 $ 512,558 $ 499,378 $ 481,608 $ 531,154

Travel Gross Billings 80,296 96,678 102,908 101,801 89,389

Gross Billings – Services 579,546 609,236 602,286 583,409 620,543

Gross Billings – Goods 369,033 284,741 293,970 285,794 429,818

Total Gross Billings $ 948,579 $ 893,977 $ 896,256 $ 869,203 $ 1,050,361

Year-over-year growth 20 % 14 % 12 % 12 % 11 %

% Third Party and Other 62 % 69 % 68 % 68 % 60 %

% Direct 38 % 31 % 32 % 32 % 40 %

Gross Billings Trailing Twelve Months (TTM) $ 3,303,479 $ 3,415,687 $ 3,513,098 $ 3,608,015 $ 3,709,797

Revenue ⁽³⁾:

Local Revenue $ 170,946 $ 180,864 $ 172,461 $ 163,786 $ 184,201

Travel Revenue 17,165 19,989 21,958 21,394 18,390

Revenue – Services 188,111 200,853 194,419 185,180 202,591

Revenue – Goods 362,863 279,029 286,863 278,751 420,056

Total Revenue $ 550,974 $ 479,882 $ 481,282 $ 463,931 $ 622,647

Year-over-year growth 24 % 11 % 14 % 11 % 13 %

% Third Party and Other 35 % 42 % 41 % 40 % 33 %

% Direct 65 % 58 % 59 % 60 % 67 %

Revenue TTM $ 1,824,461 $ 1,873,281 $ 1,930,632 $ 1,976,069 $ 2,047,742

Gross Profit ⁽⁴⁾:

Local Gross Profit $ 147,582 $ 154,776 $ 147,574 $ 138,798 $ 159,745

% of North America Local Gross Billings 29.6 % 30.2 % 29.6 % 28.8 % 30.1 %

Travel Gross Profit 14,187 15,791 18,385 17,644 15,207

% of North America Travel Gross Billings 17.7 % 16.3 % 17.9 % 17.3 % 17.0 %

Gross Profit – Services 161,769 170,567 165,959 156,442 174,952

% of North America Services Gross Billings 27.9 % 28.0 % 27.6 % 26.8 % 28.2 %

Gross Profit – Goods 34,404 23,923 30,598 34,801 44,329

% of North America Goods Gross Billings 9.3 % 8.4 % 10.4 % 12.2 % 10.3 %

Total Gross Profit $ 196,173 $ 194,490 $ 196,557 $ 191,243 $ 219,281

Year-over-year growth 13 % 8 % 9 % 9 % 12 %

% Third Party and Other 83 % 88 % 85 % 83 % 81 %

% Direct 17 % 12 % 15 % 17 % 19 %

% of North America Total Gross Billings 20.7 % 21.8 % 21.9 % 22.0 % 20.9 %

EMEA Segment:

Gross Billings:

Local Gross Billings $ 242,119 $ 217,598 $ 198,553 $ 182,540 $ 197,445

Travel Gross Billings 72,710 65,065 59,544 64,916 59,836

Gross Billings – Services 314,829 282,663 258,097 247,456 257,281

Gross Billings – Goods 245,712 176,526 175,439 167,026 229,866

Total Gross Billings $ 560,541 $ 459,189 $ 433,536 $ 414,482 $ 487,147

Year-over-year growth (1 ) % (11 ) % (10 ) % (15 ) % (13 ) %

Year-over-year growth, excluding FX ⁽⁵⁾ 8 % 7 % 9 % (1 ) % (2 ) %

% Third Party and Other 74 % 77 % 76 % 75 % 70 %

% Direct 26 % 23 % 24 % 25 % 30 %

Gross Billings TTM $ 2,046,807 $ 1,992,408 $ 1,942,689 $ 1,867,748 $ 1,794,354

Revenue:

Local Revenue $ 95,572 $ 82,536 $ 75,543 $ 70,781 $ 73,225

Travel Revenue 16,321 14,717 13,100 13,561 11,681

Revenue – Services 111,893 97,253 88,643 84,342 84,906

Revenue – Goods 160,582 118,967 115,404 114,945 163,420

Total Revenue $ 272,475 $ 216,220 $ 204,047 $ 199,287 $ 248,326

Year-over-year growth 8 % (6 ) % (10 ) % (13 ) % 9 %

Year-over-year growth, excluding FX 18 % 13 % 9 % 2 % 3 %

% Third Party and Other 46 % 51 % 48 % 48 % 41 %

% Direct 54 % 49 % 52 % 52 % 59 %

Revenue TTM $ 961,130 $ 946,457 $ 922,814 $ 892,029 $ 867,880

Gross Profit:

Local Gross Profit $ 90,150 $ 77,356 $ 70,270 $ 66,288 $ 68,966

% of EMEA Local Gross Billings 37.2 % 35.5 % 35.4 % 36.3 % 34.9 %

Travel Gross Profit 15,226 12,400 11,939 12,323 10,732

% of EMEA Travel Gross Billings 20.9 % 19.1 % 20.1 % 19.0 % 17.9 %

Gross Profit – Services 105,376 89,756 82,209 78,611 79,698

% of EMEA Services Gross Billings 33.5 % 31.8 % 31.9 % 31.8 % 31.0 %

Gross Profit – Goods 38,154 25,481 21,878 24,905 43,026

% of EMEA Goods Gross Billings 15.5 % 14.4 % 12.5 % 14.9 % 18.7 %

Total Gross Profit $ 143,530 $ 115,237 $ 104,087 $ 103,516 $ 122,724

Year-over-year growth (6 ) % (18 ) % (26 ) % (21 ) % (14 ) %

% Third Party and Other 82 % 87 % 86 % 86 % 77 %

% Direct 18 % 13 % 14 % 14 % 23 %

% of EMEA Total Gross Billings 25.6 % 25.1 % 24.0 % 25.0 % 25.2 %

Rest of World Segment:

Gross Billings:

Local Gross Billings $ 105,420 $ 99,735 $ 100,403 $ 92,972 $ 83,430

Travel Gross Billings 32,313 32,946 31,263 30,709 25,369

Gross Billings – Services 137,733 132,681 131,666 123,681 108,799

Gross Billings – Goods 77,816 66,154 67,555 60,168 60,685

Total Gross Billings $ 215,549 $ 198,835 $ 199,221 $ 183,849 $ 169,484

Year-over-year growth (10 ) % (12 ) % (9 ) % (19 ) % (21 ) %

Year-over-year growth, excluding FX — % (1 ) % 6 % — % (7 ) %

% Third Party and Other 96 % 98 % 97 % 96 % 95 %

% Direct 4 % 2 % 3 % 4 % 5 %

Gross Billings TTM $ 887,546 $ 861,032 $ 840,243 $ 797,454 $ 751,389

Revenue:

Local Revenue $ 32,264 $ 30,281 $ 28,499 $ 26,372 $ 22,229

Travel Revenue 5,757 6,495 6,363 6,135 5,098

Revenue – Services 38,021 36,776 34,862 32,507 27,327

Revenue – Goods 21,758 17,478 18,204 17,870 18,870

Total Revenue $ 59,779 $ 54,254 $ 53,066 $ 50,377 $ 46,197

Year-over-year growth (19 ) % (18 ) % (18 ) % (23 ) % (23 ) %

Year-over-year growth, excluding FX (9 ) % (8 ) % (4 ) % (5 ) % (8 ) %

% Third Party and Other 86 % 91 % 87 % 86 % 82 %

% Direct 14 % 9 % 13 % 14 % 18 %

Revenue TTM $ 256,532 $ 244,326 $ 232,802 $ 217,476 $ 203,894

Gross Profit:

Local Gross Profit $ 27,175 $ 26,161 $ 24,567 $ 22,568 $ 18,889

% of Rest of World Local Gross Billings 25.8 % 26.2 % 24.5 % 24.3 % 22.6 %

Travel Gross Profit 3,815 4,906 5,012 4,859 4,040

% of Rest of World Travel Gross Billings 11.8 % 14.9 % 16.0 % 15.8 % 15.9 %

Gross Profit – Services 30,990 31,067 29,579 27,427 22,929

% of Rest of World Services Gross Billings 22.5 % 23.4 % 22.5 % 22.2 % 21.1 %

Gross Profit – Goods 7,416 6,612 6,784 6,726 6,806

% of Rest of World Goods Gross Billings 9.5 % 10.0 % 10.0 % 11.2 % 11.2 %

Total Gross Profit $ 38,406 $ 37,679 $ 36,363 $ 34,153 $ 29,735

Year-over-year growth (24 ) % (16 ) % (20 ) % (28 ) % (23 ) %

% Third Party and Other 96 % 99 % 99 % 99 % 99 %

% Direct 4 % 1 % 1 % 1 % 1 %

% of Rest of World Total Gross Billings 17.8 % 18.9 % 18.3 % 18.6 % 17.5 %

Consolidated Results of Operations:

Gross Billings:

Local Gross Billings $ 846,789 $ 829,891 $ 798,334 $ 757,120 $ 812,029

Travel Gross Billings 185,319 194,689 193,715 197,426 174,594

Gross Billings – Services 1,032,108 1,024,580 992,049 954,546 986,623

Gross Billings – Goods 692,561 527,421 536,964 512,988 720,369

Total Gross Billings $ 1,724,669 $ 1,552,001 $ 1,529,013 $ 1,467,534 $ 1,706,992

Year-over-year growth 8 % 2 % 2 % (2 ) % (1 ) %

Year-over-year growth, excluding FX 13 % 10 % 10 % 6 % 4 %

% Third Party and Other 70 % 75 % 74 % 74 % 66 %

% Direct 30 % 25 % 26 % 26 % 34 %

Gross Billings TTM $ 6,237,832 $ 6,269,127 $ 6,296,030 $ 6,273,217 $ 6,255,540

Year-over-year growth 8 % 7 % 6 % 3 % — %

Revenue:

Local Revenue $ 298,782 $ 293,681 $ 276,503 $ 260,939 $ 279,655

Travel Revenue 39,243 41,201 41,421 41,090 35,169

Revenue – Services 338,025 334,882 317,924 302,029 314,824

Revenue – Goods 545,203 415,474 420,471 411,566 602,346

Total Revenue $ 883,228 $ 750,356 $ 738,395 $ 713,595 $ 917,170

Year-over-year growth 15 % 3 % 3 % — % 4 %

Year-over-year growth, excluding FX 19 % 10 % 11 % 7 % 9 %

% Third Party and Other 42 % 48 % 46 % 46 % 38 %

% Direct 58 % 52 % 54 % 54 % 62 %

Revenue TTM $ 3,042,123 $ 3,064,064 $ 3,086,248 $ 3,085,574 $ 3,119,516

Year-over-year growth 18 % 13 % 10 % 5 % 3 %

Gross Profit:

Local Gross Profit $ 264,907 $ 258,293 $ 242,411 $ 227,654 $ 247,600

% of Consolidated Local Gross Billings 31.3 % 31.1 % 30.4 % 30.1 % 30.5 %

Travel Gross Profit 33,228 33,097 35,336 34,826 29,979

% of Consolidated Travel Gross Billings 17.9 % 17.0 % 18.2 % 17.6 % 17.2 %

Gross Profit – Services 298,135 291,390 277,747 262,480 277,579

% of Consolidated Services Gross Billings 28.9 % 28.4 % 28.0 % 27.5 % 28.1 %

Gross Profit – Goods 79,974 56,016 59,260 66,432 94,161

% of Consolidated Goods Gross Billings 11.5 % 10.6 % 11.0 % 13.0 % 13.1 %

Total Gross Profit $ 378,109 $ 347,406 $ 337,007 $ 328,912 $ 371,740

Year-over-year growth — % (5 ) % (8 ) % (7 ) % (2 ) %

% Third Party and Other 84 % 89 % 87 % 85 % 81 %

% Direct 16 % 11 % 13 % 15 % 19 %

% of Total Consolidated Gross Billings 21.9 % 22.4 % 22.0 % 22.4 % 21.8 %

Marketing $ 59,812 $ 52,533 $ 57,007 $ 61,587 $ 83,208

Selling, general and administrative $ 285,466 $ 289,847 $ 288,721 $ 326,248 $ 287,976

Adjusted EBITDA $ 92,914 $ 72,370 $ 61,118 $ 56,334 $ 67,010

% of Total Consolidated Gross Billings 5.4 % 4.7 % 4.0 % 3.8 % 3.9 %

% of Total Consolidated Revenue 10.5 % 9.6 % 8.3 % 7.9 % 7.3 %

Free cash flow is a non-GAAP financial measure. The following is a reconciliation of free cash flow to the most comparable U.S.GAAP financial measure, “Net cash provided by (used in) operating activities from continuing operations.”

Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015

Net cash provided by (used in) operating activities from continuing operations $ 273,272 $ 40,711 $ 9,995 $ (7,612 ) $ 249,024

Purchases of property and equipment and capitalized software from continuing operations (20,117 ) (18,294 ) (22,452 ) (27,735 ) (15,507 )

Free cash flow $ 253,155 $ 22,417 $ (12,457 ) $ (35,347 ) $ 233,517

Net cash provided by (used in) operating activities from continuing operations (TTM) $ 252,497 $ 307,782 $ 346,302 $ 316,366 $ 292,118

Purchases of property and equipment and capitalized software from continuing operations (TTM) (83,560 ) (85,761 ) (79,501 ) (88,598 ) (83,988 )

Free cash flow (TTM) $ 168,937 $ 222,021 $ 266,801 $ 227,768 $ 208,130

Net cash provided by (used in) investing activities from continuing operations $ (35,175 ) $ (19,443 ) $ (28,541 ) $ (98,028 ) $ (31,238 )

Net cash provided by (used in) financing activities $ (21,088 ) $ (32,942 ) $ (138,227 ) $ (14,821 ) $ (322,166 )

Net cash provided by (used in) investing activities from continuing operations (TTM) $ (152,818 ) $ (105,821 ) $ (102,205 ) $ (181,187 ) $ (177,250 )

Net cash provided by (used in) financing activities (TTM) $ (194,156 ) $ (185,606 ) $ (209,080 ) $ (207,078 ) $ (508,156 )

Other Metrics:

Active Customers ⁽⁶⁾

North America 24.1 24.6 24.9 25.2 25.9

EMEA 15.2 15.3 15.5 15.4 15.4

Rest of World 8.1 8.2 8.2 8.0 7.6

Total Active Customers 47.4 48.1 48.6 48.6 48.9

TTM Gross Billings / Average Active Customer ⁽⁷⁾

North America $ 147 $ 147 $ 148 $ 148 $ 149

EMEA 139 134 130 123 117

Rest of World 105 101 98 99 96

Consolidated 137 135 133 132 130

Global headcount as of December 31, 2015 and 2014 was as follows:

Q4 2014 Q4 2015

Sales ⁽⁸⁾ 4,493 3,992

% North America 31 % 34 %

% EMEA 42 % 41 %

% Rest of World 27 % 25 %

Other 6,256 5,880

Total Headcount 10,749 9,872

⁽¹⁾ Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.

⁽²⁾ Local represents deals with local and national merchants and through local events. Other revenue transactions include advertising, payment processing and commission revenue.

⁽³⁾ Includes third party revenue, direct revenue and other revenue. Third party revenue is related to sales for which the Company acts as a marketing agent for the merchant. This revenue is recorded on a net basis. Direct revenue is primarily related to the sale of merchandise for which the Company is the merchant of record. These revenues are accounted for on a gross basis, with the cost of inventory included in cost of revenue. Other revenue primarily consists of commission revenue, payment processing revenue and advertising revenue.

⁽⁴⁾ Represents third party revenue, direct revenue and other revenue reduced by cost of revenue.

⁽⁵⁾ Represents the change in financial measures that would have resulted had average exchange rates in the reporting periods been the same as those in effect in the prior year periods.

⁽⁶⁾ Reflects the total number of unique user accounts who have purchased a voucher or product from us during the trailing twelve months.

⁽⁷⁾ Reflects the total gross billings generated in the trailing twelve months per average active customer over that period.

⁽⁸⁾ Includes merchant sales representatives, as well as sales support from continuing operations.

⁽⁹⁾ Financial information and other metrics have been retrospectively adjusted to exclude Ticket Monster, which has been classified as discontinued operations.

⁽¹⁰⁾ The definition, methodology and appropriateness of each of our supplemental metrics is reviewed periodically. As a result, metrics are subject to removal and/or change.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160211006437/en/

Groupon, Inc.
Investor Relations
Tom Grant, 312-999-3098
ir@groupon.com
or
Public Relations
Bill Roberts, 312-459-5191

Source: Groupon, Inc.

Image via Groupon

February 11, 2016

New Groupon CEO: Nobody Understands Us

Earlier this month, Groupon reported its Q3 financials and announced that it has a new CEO. Rich Williams stepped into the role as Eric Lefkofsky stepped down to return to his role as Chairman of the Board.

Wall Street was not impressed with the news as shares plummeted as much as 26% in after-hours trading that day. In addition to the leadership, Groupon had missed forecasts.

Williams believes the company is greatly misunderstood by the media, by analysts, and by consumers. He says Groupon is still paying the price for pas mistakes such as scaling “too far” and “too fast”.

He also says some “myths” about the company have been built up over the years, and he aims to dispel those in a new blog post.

One myth, he says, is that nobody can win in the local space, and he says that Groupon is the “unquestioned leader”.

“On more than one occasion, we’ve been overly enthusiastic about the potential impact of new products, and we’ve been wrong more than once with how critical it is for us to compete in certain areas,” Williams writes. “We shouldn’t run from those failures or apologize for them. None of them bet the future of the company. We are pioneering, we are growing, and we are the market leader, which means we know that not every test will come out beaming rainbows and unicorns. Sometimes we will fail, and sometimes we will win, and win big. Winning big is absolutely possible in local. It’s a massive space that remains largely underserved. Consumers and merchants ultimately want that to change, and that makes winning in local possible. We have sold nearly a billion Groupons life to date. Add to that our nearly 50 million active consumer and 1 million merchant customers to date and you have a lot of proof of the possibilities in local.”

Another myth, he says, is that the company isn’t growing and that it’s going out of business. He calls this logic “lazy,” and notes that Groupon has grown billings and revenue by over 90% since going public with seven consecutive quarters of double-digit billings growth in North America. They’ve also doubled their customers in the past five years, he says, adding that the number of deals available has grown by 500x since the IPO.

Back in the early days, there were a lot of reports in the media that people were finding Groupon to actually be bad for business. This is another of the myths he says, adding that they don’t hear about that one much anymore. Now, he says, the top complaint is that people just want to sell more Groupons.

The biggest myth of all, however, according to Williams, is that Groupon is an email daily deal company, when the reality, he says, is that Groupon is a marketplace, and more people get deals from searching on its website than they do from email. More than half of purchases, he says, occur on mobile.

“Second, the ‘deals are dead’ line of thinking is tired and not supported,” he says. “Deals are core to who we are as a company, and we’re not running away from them–not by a long shot. Deals have helped us build the largest transactional platform of its kind in dozens of countries around the globe and a loved brand. We also know that there’s more to our marketplace than deals, including an increasing number of market rate and low discount offers, and new ways to save time as well as money. They’re just in their early stages and we want to move faster to bring them to customers so that they can see clearly the changes for themselves. We’re going to do that, and fast.”

After the myth-busting portion of the blog post, he gets into why he thinks Groupon has what it takes to win. He says it in many, many more words, but this basically boils down to Groupon’s team, customers, a strong business model, and experience.

He also outlines some strategic companies the company is making including a shift in marketing geared toward driving people to the marketplace.

The company will be adjusting its international strategy as well. It will shut down in some countries, partner in others, and increase investments in countries where it’s doing better.

Groupon will also no longer emphasize the consumer electronics business.

Image via Groupon

November 19, 2015

Groupon Gets New CEO, Releases Earnings

Groupon released its Q3 earnings and announced that it has named Rich Williams as its new CEO as Eric Lefkofsky steps down.

Williams was appointed by the board, effective immediately as Lefkofsky returns to his role as Chairman of the Board.

“Rich is the right and natural choice for Groupon’s future, and he has the unanimous support of the Board of Directors. We are fully confident we have identified the best leader for our employees, customers, partners and shareholders,” said Ted Leonsis, outgoing Chairman of the Board, who is now Lead Independent Director. “Over the last two years, Eric has worked tirelessly for the company and the business is much stronger today because of it.”

“I am honored to be leading the company as Groupon evolves into a daily habit in our customers’ lives,” said Williams. “Under Eric, we made significant strides in establishing our marketplace. That work will continue with a greater focus than ever. As CEO, my top priority is to unlock the long-term growth potential in the business by demonstrating everything the new Groupon has to offer. We have a great team here and I look forward to the opportunities ahead of us.”

“Cracking the code in local commerce is not easy. We’ve come a long way in building a leading local commerce marketplace in the last two years,” said Lefkofsky. “With his deep experience in e-commerce — both in and outside of Groupon — and expertise in marketing, operations and technology, Rich was the obvious choice to lead Groupon.”

“I’m assuming the CEO role with three immediate priorities,” Williams said. “First, we will renew our investment in customer acquisition to introduce more new customers to our marketplace and accelerate growth. Second, we will increase our focus on streamlining our international operations to ensure we are operating as lean and efficiently as possible. Finally, we will shift our Shopping category away from lower margin ‘empty calorie’ products to grow a sustainable, healthy Goods business with stronger margins.”

As for Groupon’s financials, the company announced gros billings of $1.47 billion, revenue of $713.6 million, GAAP loss per share of $0.04 and non-GAAP earnings per share of $0.05.

Here’s the release in its entirety:

CHICAGO–(BUSINESS WIRE)– Groupon, Inc. (NASDAQ: GRPN) today announced financial results for the quarter ended September 30, 2015.

The company also announced that Chief Operating Officer Rich Williams will assume the role of Chief Executive Officer. Outgoing CEO Eric Lefkofsky will once again serve as Chairman of the Board of Directors. Outgoing Chairman Ted Leonsis will now serve as Lead Independent Director.

“Over the past few years, we’ve repositioned the business for success and strengthened our foundation. On a trailing twelve-month basis, we generated $3.1 billion in revenue, $1.4 billion in gross profit, $283 million in adjusted EBITDA and $228 million in free cash flow,” Lefkofsky said.

“We’ve successfully transformed Groupon to support our next stage of growth. The business is stable, the marketplace is scaling, and we are ready to take our next big step. Now is the right time for me to return to my role as Chairman, and let Rich, who has done a tremendous job over the past four years, lead Groupon during this next stage.”

Third Quarter 2015 Summary

Gross billings, which reflect the total dollar value of customer purchases of goods and services, was $1.47 billion in the third quarter 2015, compared with $1.49 billion in the third quarter 2014. Gross billings declined 2% globally, but grew 6% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter. On this F/X neutral basis, North America billings increased 12%, EMEA declined 1% and Rest of World was approximately flat.

Revenue was $713.6 million in the third quarter 2015, compared with $714.3 million in the third quarter 2014. Revenue was approximately flat, but grew 7% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter. On this F/X neutral basis, North America revenue increased 11%, EMEA increased 2% and Rest of World declined 5%.

Gross profit was $328.9 million in the third quarter 2015, compared with $355.3 million in the third quarter 2014. Excluding the $26.4 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, gross profit would have been$355.4 million.

Adjusted EBITDA, a non-GAAP financial measure, was $56.3 million in the third quarter 2015, compared with $63.9 million in the third quarter 2014.

Net loss attributable to common stockholders was $27.6 million, or $0.04 per share. Non-GAAP earnings attributable to common stockholders was $32.5 million, or $0.05 per share.

Third quarter 2015 results include pre-tax charges of $24.1 million and $37.5 million related to the previously announced restructuring program and securities litigation, respectively, a $13.7 million pre-tax gain from the sale of a controlling stake in Groupon India and a$17.8 million income tax benefit from a reduction in liabilities for uncertain tax positions.

Operating cash flow for the trailing twelve months ended September 30, 2015 was $316.4 million. Free cash flow, a non-GAAP financial measure, was negative $35.3 million in the third quarter 2015, bringing free cash flow for the trailing twelve months ended September 30, 2015 to $227.8 million.

Cash and cash equivalents as of September 30, 2015 was $963.6 million and borrowings against our revolving credit facility were $195.0 million.

“We delivered a solid third quarter and one that was largely in line with our expectations,” said Groupon interim CFO Brian Kayman. “Our fourth quarter guidance reflects increased investments in marketing, and a tighter focus on margin improvement, both domestically and abroad.”

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

Highlights

Units: Global units, defined as vouchers and products sold before cancellations and refunds, increased 1% year-over-year to 52 million in the third quarter 2015. North America units increased 11%, EMEA units increased 1% and Rest of World units declined 23%.

Active deals: At the end of the third quarter 2015, on average, active deals were nearly 570,000 globally, with over 290,000 in North America. Both include the addition of approximately 80,000 Coupons.

Active customers: Active customers, or customers that have purchased a voucher or product within the last twelve months, grew 4% year-over-year, to 48.6 million as of September 30, 2015, comprising 25.2 million in North America, 15.4 million in EMEA, and 8.0 million in Rest of World.

Customer spend: Third quarter 2015 trailing twelve month billings per average active customer was $132, compared with $137 in the third quarter 2014.

Share Repurchase

During the third quarter 2015, Groupon repurchased 44,149,663 shares of its Class A common stock for an aggregate purchase price of $192.9 million. Up to $268.1 million of Class A common stock remains available for repurchase under Groupon’s share repurchase program throughAugust 2017. The timing and amount of any share repurchases are determined based on market conditions, share price and other factors, and the programs may be discontinued or suspended at any time.

Outlook

Groupon’s outlook for the fourth quarter reflects current foreign exchange rates, as well as expected marketing investments in customer acquisition.

For the fourth quarter 2015, Groupon expects revenue of between $815 million and $865 million. This guidance anticipates nearly 400 basis points of unfavorable impact on the year-over-year growth rate from changes in foreign exchange rates. Groupon expects Adjusted EBITDA for the fourth quarter 2015 of between $40 million and $60 million, and non-GAAP earnings per share of between negative $0.01 and positive$0.01.

Conference Call

A conference call will be webcast live today at 4:00 p.m. CST / 5:00 p.m. EST, 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.

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

Non-GAAP Financial Measures

In addition to financial results reported in accordance with U.S. generally accepted accounting principles (U.S. GAAP), we have provided the following non-GAAP financial measures in this release and the accompanying tables: foreign exchange rate neutral operating results, adjusted EBITDA, non-GAAP net income attributable to common stockholders, non-GAAP earnings per share and free cash flow. These non-GAAP financial measures, which are presented on a continuing operations basis, are intended to aid investors in better understanding Groupon’scurrent financial performance and its prospects for the future as seen through the eyes of management. We believe that these non-GAAP financial measures facilitate comparisons with our historical results and with the results of peer companies who present similar measures (although other companies may define non-GAAP measures differently than we define them, even when similar terms are used to identify such measures). However, non-GAAP financial measures are not intended to be a substitute for those reported in accordance with U.S. GAAP. For reconciliations of these measures to the most applicable financial measures under U.S. GAAP, see “Non-GAAP Reconciliation Schedules” and “Supplemental Financial Information and Business Metrics” included in the tables accompanying this release.

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

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

Acquisition-related expense (benefit), net. Acquisition-related expense (benefit), net is comprised of the change in the fair value of contingent consideration arrangements and external transaction costs related to business combinations, primarily consisting of legal and advisory fees. The composition of our contingent consideration arrangements and the impact of those arrangements on our operating results vary over time based on a number of factors, including the terms of our business combinations and the timing of those transactions. We exclude acquisition-related expense (benefit), net because we believe that non-GAAP financial measures excluding this item provide meaningful supplemental information about our operating performance and facilitate comparisons to our historical operating results.

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

Interest and Other Non-Operating Items. Interest and other non-operating items include: interest income, interest expense, gains and losses related to minority investments, and foreign currency gains and losses. We exclude interest and other non-operating items from certain of our non-GAAP financial measures because we believe that excluding these items provides meaningful supplemental information about our core operating performance and facilitates comparisons to our historical operating results.

Items That Are Unusual in Nature or Infrequently Occurring. For the three and nine months ended September 30, 2015, items that we believe to be unusual in nature or infrequently occurring were (a) charges related to our restructuring program, (b) the gain on our disposition of Groupon India, (c) the write-off of a prepaid asset related to a marketing program that was discontinued because the counterparty ceased operations and (d) the expense related to a significant increase in the contingent liability for our securities litigation matter. We exclude items that are unusual in nature or infrequently occurring because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons to our historical results.

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

Foreign exchange rate neutral operating results show our current period operating results as if foreign currency exchange rates had remained the same as those in effect in the comparable prior-year period. We present foreign exchange rate neutral information to facilitate comparisons to our historical operating results.

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

Non-GAAP net income (loss) attributable to common stockholders and non-GAAP earnings (loss) per share adjust our net income (loss) attributable to common stockholders and earnings (loss) per share to exclude the impact of:

stock-based compensation,

amortization of acquired intangible assets,

acquisition-related expense (benefit), net,

items that are unusual in nature or infrequently occurring,

non-operating foreign currency gains and losses related to intercompany balances and reclassifications of cumulative translation adjustments to earnings as a result of business dispositions,

non-operating gains and losses from minority investments that we have elected to record at fair value with changes in fair value reported in earnings,

income (loss) from discontinued operations and

the income tax effect of those items.

We believe that excluding these items from our measures of non-GAAP net income (loss) attributable to common stockholders and earnings (loss) per share provides useful supplemental information for evaluating our operating performance and facilitates comparisons to our historical results by eliminating items that are non-cash in nature, relate to discrete events or are otherwise not indicative of the core operating performance of our ongoing business.

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

Note on Forward-Looking Statements

The statements contained in this release that refer to plans and expectations for the next quarter, the full year or the future are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve a number of risks and uncertainties, and actual results could differ materially from those discussed. The words “may,” will,” should,” “could,” “expect,” anticipate,” “believe,” “estimate,” intend,” “continue” and other similar expressions are intended to identify forward-looking statements. The risks and uncertainties that could cause our results to differ materially from those included in the forward-looking statements include, but are not limited to, volatility in our revenue and operating results; risks related to our business strategy, including our marketing strategy and spend and the productivity of those marketing investments; the impact of our shift away from lower-margin products in our Goods category; effectively dealing with challenges arising from our international operations including fluctuations in currency exchange rates; retaining existing customers and adding new customers, including as we increase our marketing spend and shift away from lower-margin products in our Goods category; retaining and adding new and high quality merchants; cyber security breaches; incurring expenses as we expand our business; competing successfully in our industry; maintaining favorable payment terms with our business partners; providing a strong mobile experience for our customers; delivery and routing of our emails; maintaining a strong brand; managing inventory and order fulfillment risks; integrating our technology platforms; managing refund risks; retaining, attracting and integrating members of our executive team; litigation; compliance with domestic and foreign laws and regulations, including the CARD Act and regulation of the Internet and e-commerce; tax liabilities; tax legislation; maintaining our information technology infrastructure; protecting our intellectual property; completing and realizing the anticipated benefits from acquisitions, dispositions, joint ventures and strategic investments; seasonality; payment-related risks; customer and merchant fraud; global economic uncertainty; our ability to raise capital if necessary; difficulties, delays or our inability to successfully complete all or part of the announced restructuring actions or to realize the operating efficiencies and other benefits of such restructuring actions; higher than anticipated restructuring charges or changes in the timing of such restructuring charges; and the impact of our ongoing strategic review and any potential strategic alternatives we may choose to pursue. For additional information regarding these and other risks and uncertainties, we urge you to refer to the factors included under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s Annual Report on Form 10-K, Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 and our other filings with the Securities and Exchange Commission, copies of which may be obtained by visiting the company’s Investor Relations web site at http://investor.groupon.com or theSEC’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 November 3, 2015. Groupon undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in its expectations.

About Groupon

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

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

Groupon, Inc.

Summary Consolidated and Segment Results

(in thousands, except share and per share amounts)

(unaudited)

The financial results of Ticket Monster, including the gain on disposition and related tax effects, are presented as discontinued operations in the accompanying condensed consolidated financial statements and tables for the nine months ended September 30, 2015. Additionally, the assets and liabilities for Ticket Monster are presented as held for sale in the accompanying condensed consolidated balance sheet as of December 31, 2014. All prior period financial information and operational metrics have been retrospectively adjusted to reflect this presentation.

Three Months Ended September 30, Nine Months Ended September 30,

2015 2014 Y/Y % Growth FX Effect⁽²⁾ Y/Y % Growth
excluding FX⁽²⁾ 2015 2014 Y/Y % Growth FX Effect⁽²⁾ Y/Y % Growth
excluding FX⁽²⁾

Gross Billings⁽¹⁾:

North America $ 869,203 $ 774,286 12.3 % $ (1,649 ) 12.5 % $ 2,659,436 $ 2,354,900 12.9 % $ (3,904 ) 13.1 %

EMEA 414,482 489,423 (15.3 ) (72,345 ) (0.5 ) 1,307,207 1,486,266 (12.0 ) (256,158 ) 5.2

Rest of World 183,849 226,638 (18.9 ) (43,127 ) 0.1 581,905 671,997 (13.4 ) (101,105 ) 1.6

Consolidated gross billings $ 1,467,534 $ 1,490,347 (1.5 ) % $ (117,121 ) 6.3 % $ 4,548,548 $ 4,513,163 0.8 % $ (361,167 ) 8.8 %

Revenue:

North America $ 463,931 $ 418,494 10.9 % $ (405 ) 11.0 % $ 1,425,095 $ 1,273,487 11.9 % $ (943 ) 12.0 %

EMEA 199,287 230,072 (13.4 ) (35,863 ) 2.2 619,554 688,655 (10.0 ) (124,694 ) 8.1

Rest of World 50,377 65,703 (23.3 ) (12,004 ) (5.1 ) 157,697 196,753 (19.9 ) (28,147 ) (5.5 )

Consolidated revenue $ 713,595 $ 714,269 (0.1 ) % $ (48,272 ) 6.7 % $ 2,202,346 $ 2,158,895 2.0 % $ (153,784 ) 9.1 %

Income (loss) from operations $ (70,423 ) $ 1,049 (6,813.3 ) % $ 633 (6,873.7 ) % $ (74,354 ) $ (2,939 ) (2,429.9 ) % $ 679 (2,453.0 ) %

Income (loss) from continuing operations (24,613 ) (12,573 ) (56,619 ) (45,039 )

Income (loss) from discontinued operations, net of tax — (6,445 ) 133,463 (30,264 )

Net income (loss) attributable toGroupon, Inc. $ (27,615 ) $ (21,208 ) $ 67,196 $ (81,878 )

Basic net income (loss) per share:

Continuing operations $ (0.04 ) $ (0.02 ) $ (0.10 ) $ (0.08 )

Discontinued operations — (0.01 ) 0.20 (0.04 )

Basic net income (loss) per share $ (0.04 ) $ (0.03 ) $ 0.10 $ (0.12 )

Diluted net income (loss) per share:

Continuing operations $ (0.04 ) $ (0.02 ) $ (0.10 ) $ (0.08 )

Discontinued operations — (0.01 ) 0.20 (0.04 )

Diluted net income (loss) per share $ (0.04 ) $ (0.03 ) $ 0.10 $ (0.12 )

Weighted average number of shares outstanding

Basic 644,894,785 669,526,524 664,302,630 675,814,535

Diluted 644,894,785 669,526,524 664,302,630 675,814,535

(1) Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.

(2) Represents the change in financial measures that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three and nine months ended September 30, 2014.

Groupon, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three Months Ended September 30, Nine Months Ended September 30,

2015 2014 2015 2014

Operating activities

Net income (loss) $ (24,613 ) $ (19,018 ) $ 76,844 $ (75,303 )

Less: Income (loss) from discontinued operations, net of tax — (6,445 ) 133,463 (30,264 )

Income (loss) from continuing operations (24,613 ) (12,573 ) (56,619 ) (45,039 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization of property, equipment and software 30,475 25,355 84,241 68,731

Amortization of acquired intangible assets 5,160 5,107 14,966 16,188

Stock-based compensation 35,575 32,680 109,204 85,329

Restructuring charges 24,146 — 24,146 —

Gain on disposition of business (13,710 ) — (13,710 ) —

Deferred income taxes (15,202 ) (2,472 ) (15,252 ) (1,956 )

Excess tax benefits on stock-based compensation 28 (2,641 ) (6,198 ) (12,573 )

Loss on equity method investments — 91 — 459

Gain from changes in fair value of contingent consideration 435 (1,020 ) (268 ) (1,059 )

Loss from changes in fair value of investments 2,564 — 2,114 —

Impairments of investments — 1,448 — 2,036

Change in assets and liabilities, net of acquisitions:

Restricted cash 1,392 6,014 4,555 7,686

Accounts receivable 16,635 (4,337 ) 6,353 (26,557 )

Prepaid expenses and other current assets (33,366 ) (27,040 ) (39,813 ) (22,883 )

Accounts payable 5,371 (5,505 ) (944 ) (12,973 )

Accrued merchant and supplier payables (51,319 ) (32,586 ) (101,852 ) (101,070 )

Accrued expenses and other current liabilities 27,368 7,853 33,413 (21,103 )

Other, net (18,551 ) 31,950 (1,242 ) 44,009

Net cash provided by (used in) operating activities from continuing operations (7,612 ) 22,324 43,094 (20,775 )

Net cash provided by (used in) operating activities from discontinued operations (19,205 ) 23,142 (36,578 ) 22,777

Net cash provided by (used in) operating activities (26,817 ) 45,466 6,516 2,002

Net cash provided by (used in) investing activities from continuing operations (98,028 ) (22,492 ) (146,012 ) (117,643 )

Net cash provided by (used in) investing activities from discontinued operations — (1,415 ) 244,470 (75,924 )

Net cash provided by (used in) investing activities (98,028 ) (23,907 ) 98,458 (193,567 )

Net cash provided by (used in) financing activities (14,821 ) (16,823 ) (185,990 ) (173,068 )

Effect of exchange rate changes on cash and cash equivalents, including cash

classified within current assets held for sale
(6,923 ) (21,102 ) (27,338 ) (20,671 )

Net increase (decrease) in cash and cash equivalents, including cash classified

within current assets held for sale
(146,589 ) (16,366 ) (108,354 ) (385,304 )

Less: Net increase (decrease) in cash classified within current assets held for sale — 20,649 (55,279 ) 43,324

Net increase (decrease) in cash and cash equivalents (146,589 ) (37,015 ) (53,075 ) (428,628 )

Cash and cash equivalents, beginning of period 1,110,148 845,413 1,016,634 1,240,472

Cash and cash equivalents, end of period $ 963,559 $ 808,398 $ 963,559 $ 811,844

Groupon, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(unaudited)

Three Months Ended September 30, Nine Months Ended September 30,

2015 2014 2015 2014

Revenue:

Third party and other $ 326,306 $ 362,903 $ 1,027,273 $ 1,133,109

Direct 387,289 351,366 1,175,073 1,025,786

Total revenue 713,595 714,269 2,202,346 2,158,895

Cost of revenue:

Third party and other 46,050 50,774 145,292 153,333

Direct 338,633 308,217 1,043,729 918,362

Total cost of revenue 384,683 358,991 1,189,021 1,071,695

Gross profit 328,912 355,278 1,013,325 1,087,200

Operating expenses:

Marketing 61,587 55,258 171,127 182,142

Selling, general and administrative 326,248 299,275 904,816 905,919

Restructuring charges 24,146 — 24,146 —

Gain on disposition of business (13,710 ) — (13,710 ) —

Acquisition-related expense (benefit), net 1,064 (304 ) 1,300 2,078

Total operating expenses 399,335 354,229 1,087,679 1,090,139

Income (loss) from operations (70,423 ) 1,049 (74,354 ) (2,939 )

Other income (expense), net ⁽¹⁾ (8,160 ) (20,056 ) (25,146 ) (21,919 )

Income (loss) from continuing operations before provision

(benefit) for income taxes
(78,583 ) (19,007 ) (99,500 ) (24,858 )

Provision (benefit) for income taxes (53,970 ) (6,434 ) (42,881 ) 20,181

Income (loss) from continuing operations (24,613 ) (12,573 ) (56,619 ) (45,039 )

Income (loss) from discontinued operations, net of tax — (6,445 ) 133,463 (30,264 )

Net income (loss) (24,613 ) (19,018 ) 76,844 (75,303 )

Net income (loss) attributable to noncontrolling interests (3,002 ) (2,190 ) (9,648 ) (6,575 )

Net income (loss) attributable to Groupon, Inc. $ (27,615 ) $ (21,208 ) $ 67,196 $ (81,878 )

Basic net income (loss) per share:

Continuing operations $ (0.04 ) $ (0.02 ) $ (0.10 ) $ (0.08 )

Discontinued operations — (0.01 ) 0.20 (0.04 )

Basic net income (loss) per share $ (0.04 ) $ (0.03 ) $ 0.10 $ (0.12 )

Diluted net income (loss) per share:

Continuing operations $ (0.04 ) $ (0.02 ) $ (0.10 ) $ (0.08 )

Discontinued operations — (0.01 ) 0.20 (0.04 )

Diluted net income (loss) per share $ (0.04 ) $ (0.03 ) $ 0.10 $ (0.12 )

Weighted average number of shares outstanding

Basic 644,894,785 669,526,524 664,302,630 675,814,535

Diluted 644,894,785 669,526,524 664,302,630 675,814,535

(1) Other income (expense), net includes foreign currency losses of $5.2 million and $18.6 million for the three months ended September 30, 2015 and 2014, respectively, and foreign currency losses of $22.1 million and $20.1 million for the nine months ended September 30, 2015 and 2014, respectively.

Groupon, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

September 30, 2015 December 31, 2014

(unaudited)

Assets

Current assets:

Cash and cash equivalents $ 963,559 $ 1,016,634

Accounts receivable, net 76,121 90,597

Deferred income taxes 19,349 16,271

Prepaid expenses and other current assets 223,986 192,382

Current assets held for sale — 85,445

Total current assets 1,283,015 1,401,329

Property, equipment and software, net 202,714 176,004

Goodwill 291,084 236,756

Intangible assets, net 40,841 30,609

Investments (including $149.2 million and $7.4 million at September 30, 2015 and December 31,

2014, respectively, at fair value)
163,789 24,298

Deferred income taxes, non-current 28,791 41,323

Other non-current assets 20,407 16,173

Non-current assets held for sale — 301,105

Total Assets $ 2,030,641 $ 2,227,597

Liabilities and Equity

Current liabilities:

Short-term borrowings $ 195,000 $ —

Accounts payable 15,503 13,822

Accrued merchant and supplier payables 640,044 772,156

Accrued expenses 260,883 214,260

Deferred income taxes 28,573 31,998

Other current liabilities 142,925 127,121

Current liabilities held for sale — 166,239

Total current liabilities 1,282,928 1,325,596

Deferred income taxes, non-current 4,756 773

Other non-current liabilities 142,005 129,531

Non-current liabilities held for sale — 6,753

Total Liabilities 1,429,689 1,462,653

Commitments and contingencies

Stockholders’ Equity

Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized,

714,074,671 shares issued and 620,933,460 shares outstanding at September 30, 2015 and

699,008,084 shares issued and 671,768,980 shares outstanding at December 31, 2014
71 70

Class B common stock, par value $0.0001 per share, 10,000,000 shares authorized, 2,399,976

shares issued and outstanding at September 30, 2015 and December 31, 2014
— —

Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized, no shares issued

and outstanding at September 30, 2015 and December 31, 2014
— —

Additional paid-in capital 1,933,994 1,847,420

Treasury stock, at cost, 93,141,211 shares at September 30, 2015 and 27,239,104 shares at

December 31, 2014

(532,530 ) (198,467 )

Accumulated deficit (854,764 ) (921,960 )

Accumulated other comprehensive income 53,369 35,763

Total Groupon, Inc. Stockholders’ Equity 600,140 762,826

Noncontrolling interests 812 2,118

Total Equity 600,952 764,944

Total Liabilities and Equity $ 2,030,641 $ 2,227,597

Groupon, Inc.

Segment Information

(in thousands)

(unaudited)

Three Months Ended September 30, Nine Months Ended September 30,

2015 2014 2015 2014

North America

Gross billings ⁽¹⁾ $ 869,203 $ 774,286 $ 2,659,436 $ 2,354,900

Revenue 463,931 418,494 1,425,095 1,273,487

Segment cost of revenue and operating expenses ^(2)(3)(4) 494,843 405,910 1,404,472 1,234,973

Segment operating income (loss) ⁽²⁾ $ (30,912 ) $ 12,584 $ 20,623 $ 38,514

Segment operating income (loss) as a percent of segment gross billings (3.6 )% 1.6 % 0.8 % 1.6 %

Segment operating income (loss) as a percent of segment revenue (6.7 )% 3.0 % 1.4 % 3.0 %

EMEA

Gross billings ⁽¹⁾ $ 414,482 $ 489,423 $ 1,307,207 $ 1,486,266

Revenue 199,287 230,072 619,554 688,655

Segment cost of revenue and operating expenses ^(2)(4)(5) 195,397 207,643 586,343 619,594

Segment operating income (loss) ⁽²⁾ $ 3,890 $ 22,429 $ 33,211 $ 69,061

Segment operating income (loss) as a percent of segment gross billings 0.9 % 4.6 % 2.5 % 4.6 %

Segment operating income (loss) as a percent of segment revenue 2.0 % 9.7 % 5.4 % 10.0 %

Rest of World

Gross billings ⁽¹⁾ $ 183,849 $ 226,638 $ 581,905 $ 671,997

Revenue 50,377 65,703 157,697 196,753

Segment cost of revenue and operating expenses ⁽²⁾⁽⁴⁾ 57,282 67,291 175,542 219,860

Segment operating income (loss) ⁽²⁾ $ (6,905 ) $ (1,588 ) $ (17,845 ) $ (23,107 )

Segment operating income (loss) as a percent of segment gross billings (3.8 )% (0.7 )% (3.1 )% (3.4 )%

Segment operating income (loss) as a percent of segment revenue (13.7 )% (2.4 )% (11.3 )% (11.7 )%

(1) Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.

(2) Segment cost of revenue and operating expenses and segment operating income (loss) exclude stock-based compensation and acquisition-related expense (benefit), net.

(3) Segment cost of revenue and operating expenses for North America for the three and nine months ended September 30, 2015 includes a$37.5 million expense related to an increase in the Company’s contingent liability for its securities litigation matter.

(4) Segment cost of revenue and operating expenses for the three and nine months ended September 30, 2015 includes restructuring charges of $1.4 million in North America, $19.7 million in EMEA and $3.0 million in Rest of World.

(5) Segment cost of revenue and operating expenses for EMEA for the three and nine months ended September 30, 2015 includes a $6.7 million expense for the write-off of a prepaid asset related to a marketing program that was discontinued because the counterparty ceased operations.

Groupon, Inc.

Non-GAAP Reconciliation Schedules

(in thousands, except share and per share amounts)

(unaudited)

Adjusted EBITDA, non-GAAP earnings attributable to common stockholders and non-GAAP earnings per share are non-GAAP financial measures. The Company reconciles Adjusted EBITDA to the most comparable U.S. GAAP financial measure, “Net income (loss) from continuing operations” for the periods presented and the Company reconciles non-GAAP earnings per share to the most comparable U.S. GAAP financial measure, “Diluted net income (loss) per share,” for the periods presented.

The following is a quarterly reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, “Net income (loss) from continuing operations.”

Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015

Income (loss) from continuing operations $ (12,573 ) $ 26,566 $ (16,739 ) $ (15,267 ) $ (24,613 )

Adjustments:

Stock-based compensation _⁽¹⁾ 32,680 29,961 35,144 38,467 35,432

Depreciation and amortization 30,462 30,122 32,200 31,372 35,635

Acquisition-related expense (benefit), net (304 ) (809 ) (269 ) 505 1,064

Restructuring charges — — — — 24,146

Gain on disposition of business — — — — (13,710 )

Prepaid marketing write-off — — — — 6,690

Securities litigation expense — — — — 37,500

Other expense (income), net 20,056 11,531 19,927 (2,941 ) 8,160

Provision (benefit) for income taxes (6,434 ) (4,457 ) 2,107 8,982 (53,970 )

Total adjustments 76,460 66,348 89,109 76,385 80,947

Adjusted EBITDA $ 63,887 $ 92,914 $ 72,370 $ 61,118 # $ 56,334

(1) Includes stock-based compensation classified within cost of revenue, marketing expense, and selling, general and administrative expense. Other expense (income), net, includes $0.02 million and $0.1 million of additional stock-based compensation for the three months endedJune 30, 2015 and the three months ended September 30, 2015, respectively.

The following is a reconciliation of net income (loss) attributable to common stockholders to non-GAAP net income (loss) attributable to common stockholders and a reconciliation of diluted net income (loss) per share to non-GAAP net income (loss) per share for the three and nine months ended September 30, 2015:

Three Months Ended

September 30, 2015
Nine Months Ended

September 30, 2015

Net income (loss) attributable to common stockholders $ (27,615 ) $ 67,196

Stock-based compensation 35,575 109,204

Amortization of acquired intangible assets 5,160 14,966

Acquisition-related expense (benefit), net 1,064 1,300

Restructuring charges 24,146 24,146

Gain on disposition of business (13,710 ) (13,710 )

Prepaid marketing write-off 6,690 6,690

Securities litigation expense 37,500 37,500

Intercompany foreign losses (gains) and

reclassfication of translation adjustment to

earnings ⁽¹⁾
4,708 20,666

Loss from changes in fair value of investments 2,564 2,114

Income tax effect of above adjustments (43,541 ) (68,932 )

Income from discontinued operations, net of tax — (133,463 )

Non-GAAP net income (loss) attributable to common stockholders $ 32,541 $ 67,677

Diluted shares 644,894,785 644,302,630

Incremental diluted shares 5,385,857 7,017,448

Adjusted diluted shares 650,280,642 651,320,078

Diluted net income (loss) per share $ (0.04 ) $ 0.10

Impact of stock-based compensation,

amortization of acquired intangible assets,

acquisition-related expense (benefit), net,

intercompany foreign currency losses (gains),

items that are unusual in nature and infrequently

occurring, income (loss) from discontinued

operations and related tax effects
0.09 —

Non-GAAP net income (loss) per share $ 0.05 $ 0.10

(1) For the nine months ended September 30, 2015, a $4.4 million loss related to the cumulative translation adjustment from the Company’s legacy business in the Republic of Korea was reclassified to earnings as a result of the Ticket Monster disposition.

Foreign exchange rate neutral operating results are non-GAAP financial measures. The Company reconciles foreign exchange rate neutral operating results to the most comparable U.S. GAAP financial measures, “Gross billings,” “Revenue” and “Income (loss) from continuing operations,” respectively, for the periods presented. The Company reconciles “foreign exchange rate neutral Gross billings growth” and “foreign exchange rate neutral Revenue growth” to year-over-year growth rates for the most comparable U.S. GAAP financial measures, “Gross billings growth” and “Revenue growth,” respectively, for the periods presented.

The effect on the Company’s gross billings, revenue and income (loss) from changes in exchange rates versus the U.S. Dollar for the three months ended September 30, 2015 was as follows:

Three Months Ended September 30, 2015 Three Months Ended September 30, 2015

At Avg. Q3 2014

Rates⁽¹⁾
Exchange Rate

Effect⁽²⁾
As

Reported
At Avg. Q2 2015

Rates⁽³⁾
Exchange Rate

Effect⁽²⁾
As

Reported

Gross billings $ 1,584,655 $ (117,121 ) $ 1,467,534 $ 1,478,528 $ (10,994 ) $ 1,467,534

Revenue 761,867 (48,272 ) 713,595 716,702 (3,107 ) 713,595

Income (loss) from operations $ (71,056 ) $ 633 $ (70,423 ) $ (71,189 ) $ 766 $ (70,423 )

The effect on the Company’s gross billings, revenue and income (loss) from operations from changes in exchange rates versus the U.S. Dollar for the nine months ended September 30, 2015 was as follows:

Nine Months Ended September 30, 2015 Nine Months Ended September 30, 2015

At Avg. Q3 2014

YTD Rates⁽¹⁾
Exchange Rate

Effect⁽²⁾
As

Reported
At Avg. Q4’14-Q2’15

Rates⁽³⁾
Exchange Rate

Effect⁽²⁾
As

Reported

Gross billings $ 4,909,715 $ (361,167 ) $ 4,548,548 $ 4,624,647 $ (76,099 ) $ 4,548,548

Revenue 2,356,130 (153,784 ) 2,202,346 2,234,382 (32,036 ) 2,202,346

(Loss) income from operations $ (75,033 ) $ 679 $ (74,354 ) $ (74,074 ) $ (280 ) $ (74,354 )

(1) Represents the financial statement balances that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three and nine months ended September 30, 2014.

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

(3) Represents the financial statement balances that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three and nine months ended June 30, 2015.

The following is a quarterly reconciliation of foreign exchange rate neutral Gross billings growth from the comparable quarterly periods of the prior year to reported Gross billings growth from the comparable quarterly periods of the prior year.

Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015

EMEA Gross billings growth, excluding FX 10 % 8 % 7 % 9 % (1 ) %

FX Effect — (9 ) (18 ) (19 ) (14 )

EMEA Gross billings growth 10 % (1 ) % (11 ) % (10 ) % (15 ) %

Rest of World Gross billings growth, excluding FX 1 % — % (1 ) % 6 % — %

FX Effect (4 ) (10 ) (11 ) (15 ) (19 )

Rest of World Gross billings growth (3 ) % (10 ) % (12 ) % (9 ) % (19 ) %

Consolidated Gross billings growth, excluding FX 12 % 13 % 10 % 10 % 6 %

FX Effect (1 ) (5 ) (8 ) (8 ) (8 )

Consolidated Gross billings growth 11 % 8 % 2 % 2 % (2 ) %

The following is a quarterly reconciliation of foreign exchange rate neutral Revenue growth from the comparable quarterly periods of the prior year to reported Revenue growth from the comparable quarterly periods of the prior year.

Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015

EMEA Revenue growth, excluding FX 55 % 18 % 13 % 9 % 2 %

FX Effect 1 (10 ) (19 ) (19 ) (15 )

EMEA Revenue growth 56 % 8 % (6 ) % (10 ) % (13 ) %

Rest of World Revenue growth, excluding FX (20 ) % (9 ) % (8 ) % (4 ) % (5 ) %

FX Effect (4 ) (10 ) (10 ) (14 ) (18 )

Rest of World Revenue growth (24 ) % (19 ) % (18 ) % (18 ) % (23 ) %

Consolidated Revenue growth, excluding FX 21 % 19 % 10 % 11 % 7 %

FX Effect (1 ) (4 ) (7 ) (8 ) (7 )

Consolidated Revenue growth 20 % 15 % 3 % 3 % — %

The effect on North America’s gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended September 30, 2015 was as follows:

At Avg. Q3

2014 Rates ⁽¹⁾
Exchange

Rate

Effect ⁽²⁾
September 30, 2015

As Reported
September 30, 2014

As Reported
Y/Y %

Growth
Y/Y%

Growth

excluding

FX

Local:

Third party and other $ 482,498 $ (890 ) $ 481,608 $ 446,573 7.8 % 8.0 %

Travel:

Third party 102,065 (264 ) 101,801 84,820 20.0 % 20.3 %

Total services 584,563 (1,154 ) 583,409 531,393 9.8 % 10.0 %

Goods:

Third party 9,181 (495 ) 8,686 5,077 71.1 % 80.8 %

Direct 277,108 — 277,108 237,816 16.5 16.5

Total 286,289 (495 ) 285,794 242,893 17.7 % 17.9

Travel:

Third party 102,065 (264 ) 101,801 84,820 20.0 % 20.3 %

Total gross billings $ 870,852 $ (1,649 ) $ 869,203 $ 774,286 12.3 % 12.5 %

The effect on EMEA’s gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months endedSeptember 30, 2015 was as follows:

At Avg. Q3

2014 Rates ⁽¹⁾
Exchange

Rate

Effect ⁽²⁾
September 30, 2015

As Reported
September 30, 2014

As Reported
Y/Y %

Growth
Y/Y%

Growth

excluding

FX

Local:

Third party and other $ 211,548 $ (29,008 ) $ 182,540 $ 218,615 (16.5 ) % (3.2 ) %

Travel:

Third party 77,825 (12,909 ) 64,916 79,802 (18.7 ) % (2.5 ) %

Total services 289,373 (41,917 ) 247,456 298,417 (17.1 ) % (3.0 ) %

Goods:

Third party 74,621 (10,703 ) 63,918 82,646 (22.7 ) % (9.7 ) %

Direct 122,833 (19,725 ) 103,108 108,360 (4.8 ) 13.4

Total 197,454 (30,428 ) 167,026 191,006 (12.6 ) % 3.4 %

Travel:

Third party 77,825 (12,909 ) 64,916 79,802 (18.7 ) % (2.5 ) %

Total gross billings $ 486,827 $ (72,345 ) $ 414,482 $ 489,423 (15.3 ) % (0.5 ) %

The effect on Rest of World’s gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended September 30, 2015 was as follows:

At Avg. Q3

2014 Rates ⁽¹⁾
Exchange

Rate

Effect ⁽²⁾
September 30, 2015

As Reported
September 30, 2014

As Reported
Y/Y %

Growth
Y/Y%

Growth

excluding

FX

Local:

Third party and other $ 115,909 $ (22,937 ) $ 92,972 $ 120,269 (22.7 ) % (3.6 ) %

Travel:

Third party 38,890 (8,181 ) 30,709 35,754 (14.1 ) % 8.8 %

Total services 154,799 (31,118 ) 123,681 156,023 (20.7 ) % (0.8 ) %

Goods:

Third party 63,749 (10,654 ) 53,095 65,425 (18.8 ) % (2.6 ) %

Direct 8,428 (1,355 ) 7,073 5,190 36.3 62.4

Total 72,177 (12,009 ) 60,168 70,615 (14.8 ) % 2.2 %

Travel:

Third party 38,890 (8,181 ) 30,709 35,754 (14.1 ) % 8.8 %

Total gross billings $ 226,976 $ (43,127 ) $ 183,849 $ 226,638 (18.9 ) % 0.1 %

The effect on consolidated gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months endedSeptember 30, 2015 was as follows:

At Avg. Q3

2014 Rates ⁽¹⁾
Exchange

Rate

Effect⁽²⁾
September 30, 2015

As Reported
September 30, 2014

As Reported
Y/Y %

Growth
Y/Y%

Growth

excluding

FX

Local:

Third party and other $ 809,955 $ (52,835 ) $ 757,120 $ 785,457 (3.6 ) % 3.1 %

Travel:

Third party 218,780 (21,354 ) 197,426 200,376 (1.5 ) % 9.2 %

Total services 1,028,735 (74,189 ) 954,546 985,833 (3.2 ) % 4.4 %

Goods:

Third party 147,551 (21,852 ) 125,699 153,148 (17.9 ) % (3.7 ) %

Direct 408,369 (21,080 ) 387,289 351,366 10.2 16.2

Total 555,920 (42,932 ) 512,988 504,514 1.7 % 10.2 %

Total gross billings $ 1,584,655 $ (117,121 ) $ 1,467,534 $ 1,490,347 (1.5 ) % 6.3 %

(1) Represents the financial statement balances that would have resulted had average exchange rates in the reporting period been the same as those in effect during the three months ended September 30, 2014.

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

Groupon, Inc.

Supplemental Financial Information and Business Metrics ^(9)(10)

(financial data in thousands; active customers in millions)

(unaudited)

Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015

Segments

North America Segment:

Gross Billings ⁽¹⁾:

Local ⁽²⁾ Gross Billings $ 446,573 $ 499,250 $ 512,558 $ 499,378 $ 481,608

Travel Gross Billings 84,820 80,296 96,678 102,908 101,801

Gross Billings – Services 531,393 579,546 609,236 602,286 583,409

Gross Billings – Goods 242,893 369,033 284,741 293,970 285,794

Total Gross Billings $ 774,286 $ 948,579 $ 893,977 $ 896,256 $ 869,203

Year-over-year growth 16 % 20 % 14 % 12 % 12 %

% Third Party and Other 69 % 62 % 69 % 68 % 68 %

% Direct 31 % 38 % 31 % 32 % 32 %

Gross Billings Trailing Twelve Months (TTM) $ 3,143,621 $ 3,303,479 $ 3,415,687 $ 3,513,098 $ 3,608,015

Revenue ⁽³⁾:

Local Revenue $ 161,912 $ 170,946 $ 180,864 $ 172,461 $ 163,786

Travel Revenue 17,627 17,165 19,989 21,958 21,394

Revenue – Services 179,539 188,111 200,853 194,419 185,180

Revenue – Goods 238,955 362,863 279,029 286,863 278,751

Total Revenue $ 418,494 $ 550,974 $ 479,882 $ 481,282 $ 463,931

Year-over-year growth 16 % 24 % 11 % 14 % 11 %

% Third Party and Other 43 % 35 % 42 % 41 % 40 %

% Direct 57 % 65 % 58 % 59 % 60 %

Revenue TTM $ 1,717,271 $ 1,824,461 $ 1,873,281 $ 1,930,632 $ 1,976,069

Gross Profit ⁽⁴⁾:

Local Gross Profit $ 138,189 $ 147,582 $ 154,776 $ 147,574 $ 138,798

% of North America Local Gross Billings 30.9 % 29.6 % 30.2 % 29.6 % 28.8 %

Travel Gross Profit 14,000 14,187 15,791 18,385 17,644

% of North America Travel Gross Billings 16.5 % 17.7 % 16.3 % 17.9 % 17.3 % %

Gross Profit – Services 152,189 161,769 170,567 165,959 156,442

% of North America Services Gross Billings 28.6 % 27.9 % 28.0 % 27.6 % 26.8 %

Gross Profit – Goods 23,953 34,404 23,923 30,598 34,801

% of North America Goods Gross Billings 9.9 % 9.3 % 8.4 % 10.4 % 12.2 %

Total Gross Profit $ 176,142 $ 196,173 $ 194,490 $ 196,557 $ 191,243

Year-over-year growth 3 % 13 % 8 % 9 % 9 %

% Third Party and Other 87 % 83 % 88 % 85 % 83 %

% Direct 13 % 17 % 12 % 15 % 17 %

% of North America Total Gross Billings 22.7 % 20.7 % 21.8 % 21.9 % 22.0 %

EMEA Segment:

Gross Billings:

Local Gross Billings $ 218,615 $ 242,119 $ 217,598 $ 198,553 $ 182,540

Travel Gross Billings 79,802 72,710 65,065 59,544 64,916

Gross Billings – Services 298,417 314,829 282,663 258,097 247,456

Gross Billings – Goods 191,006 245,712 176,526 175,439 167,026

Total Gross Billings $ 489,423 $ 560,541 $ 459,189 $ 433,536 $ 414,482

Year-over-year growth 10 % (1 ) % (11 ) % (10 ) % (15 ) %

Year-over-year growth, excluding FX 10 % 8 % 7 % 9 % (1 ) %

% Third Party and Other 78 % 74 % 77 % 76 % 75 %

% Direct 22 % 26 % 23 % 24 % 25 %

Gross Billings TTM $ 2,051,979 $ 2,046,807 $ 1,992,408 $ 1,942,689 $ 1,867,748

Revenue:

Local Revenue $ 90,002 $ 95,572 $ 82,536 $ 75,543 $ 70,781

Travel Revenue 16,960 16,321 14,717 13,100 13,561

Revenue – Services 106,962 111,893 97,253 88,643 84,342

Revenue – Goods 123,110 160,582 118,967 115,404 114,945

Total Revenue $ 230,072 $ 272,475 $ 216,220 $ 204,047 $ 199,287

Year-over-year growth 56 % 8 % (6 ) % (10 ) % (13 ) %

Year-over-year growth, excluding FX 55 % 18 % 13 % 9 % 2 %

% Third Party and Other 53 % 46 % 51 % 48 % 48 %

% Direct 47 % 54 % 49 % 52 % 52 %

Revenue TTM $ 939,860 $ 961,130 $ 946,457 $ 922,814 $ 892,029

Gross Profit:

Local Gross Profit $ 83,956 $ 90,150 $ 77,356 $ 70,270 $ 66,288

% of EMEA Local Gross Billings 38.4 % 37.2 % 35.5 % 35.4 % 36.3 %

Travel Gross Profit 15,440 15,226 12,400 11,939 12,323

% of EMEA Travel Gross Billings 19.3 % 20.9 % 19.1 % 20.1 % 19.0 % %

Gross Profit – Services 99,396 105,376 89,756 82,209 78,611

% of EMEA Services Gross Billings 33.3 % 33.5 % 31.8 % 31.9 % 31.8 %

Gross Profit – Goods 32,252 38,154 25,481 21,878 24,905

% of EMEA Goods Gross Billings 16.9 % 15.5 % 14.4 % 12.5 % 14.9 %

Total Gross Profit $ 131,648 $ 143,530 $ 115,237 $ 104,087 $ 103,516

Year-over-year growth 6 % (6 ) % (18 ) % (26 ) % (21 ) %

% Third Party and Other 85 % 82 % 87 % 86 % 86 %

% Direct 15 % 18 % 13 % 14 % 14 %

% of EMEA Total Gross Billings 26.9 % 25.6 % 25.1 % 24.0 % 25.0 %

Rest of World Segment:

Gross Billings:

Local Gross Billings $ 120,269 $ 105,420 $ 99,735 $ 100,403 $ 92,972

Travel Gross Billings 35,754 32,313 32,946 31,263 30,709

Gross Billings – Services 156,023 137,733 132,681 131,666 123,681

Gross Billings – Goods 70,615 77,816 66,154 67,555 60,168

Total Gross Billings $ 226,638 $ 215,549 $ 198,835 $ 199,221 $ 183,849

Year-over-year growth (3 ) % (10 ) % (12 ) % (9 ) % (19 ) %

Year-over-year growth, excluding FX 1 % — % (1 ) % 6 % — %

% Third Party and Other 98 % 96 % 98 % 97 % 96 %

% Direct 2 % 4 % 2 % 3 % 4 %

Gross Billings TTM $ 910,670 $ 887,546 $ 861,032 $ 840,243 $ 797,454

Revenue:

Local Revenue $ 39,034 $ 32,264 $ 30,281 $ 28,499 $ 26,372

Travel Revenue 7,243 5,757 6,495 6,363 6,135

Revenue – Services 46,277 38,021 36,776 34,862 32,507

Revenue – Goods 19,426 21,758 17,478 18,204 17,870

Total Revenue $ 65,703 $ 59,779 $ 54,254 $ 53,066 $ 50,377

Year-over-year growth (24 ) % (19 ) % (18 ) % (18 ) % (23 ) %

Year-over-year growth, excluding FX (20 ) % (9 ) % (8 ) % (4 ) % (5 ) %

% Third Party and Other 92 % 86 % 91 % 87 % 86 %

% Direct 8 % 14 % 9 % 13 % 14 %

Revenue TTM $ 270,211 $ 256,532 $ 244,326 $ 232,802 $ 217,476

Gross Profit:

Local Gross Profit $ 34,373 $ 27,175 $ 26,161 $ 24,567 $ 22,568

% of Rest of World Local Gross Billings 28.6 % 25.8 % 26.2 % 24.5 % 24.3 %

Travel Gross Profit 5,544 3,815 4,906 5,012 4,859

% of Rest of World Travel Gross Billings 15.5 % 11.8 % 14.9 % 16.0 % 15.8 %

Gross Profit – Services 39,917 30,990 31,067 29,579 27,427

% of Rest of World Services Gross Billings 25.6 % 22.5 % 23.4 % 22.5 % 22.2 %

Gross Profit – Goods 7,571 7,416 6,612 6,784 6,726

% of Rest of World Goods Gross Billings 10.7 % 9.5 % 10.0 % 10.0 % 11.2 %

Total Gross Profit $ 47,488 $ 38,406 $ 37,679 $ 36,363 $ 34,153

Year-over-year growth (26 ) % (24 ) % (16 ) % (20 ) % (28 ) %

% Third Party and Other 100 % 96 % 99 % 99 % 99 %

% Direct — % 4 % 1 % 1 % 1 %

% of Rest of World Total Gross Billings 21.0 % 17.8 % 18.9 % 18.3 % 18.6 %

Consolidated Results of Operations:

Gross Billings:

Local Gross Billings $ 785,457 $ 846,789 $ 829,891 $ 798,334 $ 757,120

Travel Gross Billings 200,376 185,319 194,689 193,715 197,426

Gross Billings – Services 985,833 1,032,108 1,024,580 992,049 954,546

Gross Billings – Goods 504,514 692,561 527,421 536,964 512,988

Total Gross Billings $ 1,490,347 $ 1,724,669 $ 1,552,001 $ 1,529,013 $ 1,467,534

Year-over-year growth 11 % 8 % 2 % 2 % (2 ) %

Year-over-year growth, excluding FX 12 % 13 % 10 % 10 % 6 %

% Third Party and Other 76 % 70 % 75 % 74 % 74 %

% Direct 24 % 30 % 25 % 26 % 26 %

Gross Billings TTM $ 6,106,270 $ 6,237,832 $ 6,269,127 $ 6,296,030 $ 6,273,217

Year-over-year growth 7 % 8 % 7 % 6 % 3 % %

Revenue:

Local Revenue $ 290,948 $ 298,782 $ 293,681 $ 276,503 $ 260,939

Travel Revenue 41,830 39,243 41,201 41,421 41,090

Revenue – Services 332,778 338,025 334,882 317,924 302,029

Revenue – Goods 381,491 545,203 415,474 420,471 411,566

Total Revenue $ 714,269 $ 883,228 $ 750,356 $ 738,395 $ 713,595

Year-over-year growth 20 % 15 % 3 % 3 % (0 ) %

Year-over-year growth, excluding FX 21 % 19 % 10 % 11 % 7 %

% Third Party and Other 51 % 42 % 48 % 46 % 46 %

% Direct 49 % 58 % 52 % 54 % 54 %

Revenue TTM $ 2,927,342 $ 3,042,123 $ 3,064,064 $ 3,086,248 $ 3,085,574

Year-over-year growth 20 % 18 % 13 % 10 % 5 %

Gross Profit:

Local Gross Profit $ 256,518 $ 264,907 $ 258,293 $ 242,411 $ 227,654

% of Consolidated Local Gross Billings 32.7 % 31.3 % 31.1 % 30.4 % 30.1 %

Travel Gross Profit 34,984 33,228 33,097 35,336 34,826

% of Consolidated Travel Gross Billings 17.5 % 17.9 % 17.0 % 18.2 % 17.6 %

Gross Profit – Services 291,502 298,135 291,390 277,747 262,480

% of Consolidated Services Gross Billings 29.6 % 28.9 % 28.4 % 28.0 % 27.5 %

Gross Profit – Goods 63,776 79,974 56,016 59,260 66,432

% of Consolidated Goods Gross Billings 12.6 % 11.5 % 10.6 % 11.0 % 13.0 %

Total Gross Profit $ 355,278 $ 378,109 $ 347,406 $ 337,007 $ 328,912

Year-over-year growth (1 ) % — % (5 ) % (8 ) % (7 ) %

% Third Party and Other 88 % 84 % 89 % 87 % 85 %

% Direct 12 % 16 % 11 % 13 % 15 %

% of Total Consolidated Gross Billings 23.8 % 21.9 % 22.4 % 22.0 % 22.4 %

Marketing $ 55,258 $ 59,812 $ 52,533 $ 57,007 $ 61,587

Selling, general and administrative $ 299,275 $ 285,472 $ 289,847 $ 288,721 $ 326,248

Adjusted EBITDA $ 63,887 $ 92,914 $ 72,370 $ 61,118 $ 56,334

% of Total Consolidated Gross Billings 4.3 % 5.4 % 4.7 % 4.0 % 3.8 %

% of Total Consolidated Revenue 8.9 % 10.5 % 9.6 % 8.3 % 7.9 %

Free cash flow is a non-GAAP financial measure. The following is a reconciliation of free cash flow to the most comparable U.S. GAAP financial measure, “Net cash provided by (used in) operating activities from continuing operations.”

Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015

Net cash provided by (used in) operating activities from continuing operations $ 22,324 $ 273,272 $ 40,711 $ 9,995 $ (7,612 )

Purchases of property and equipment and capitalized software from continuing operations (18,638 ) (20,117 ) (18,294 ) (22,452 ) (27,735 )

Free cash flow $ 3,686 $ 253,155 $ 22,417 $ (12,457 ) $ (35,347 )

Net cash provided by (used in) operating activities from continuing operations (TTM) $ 157,500 $ 252,497 $ 307,782 $ 346,302 $ 316,366

Purchases of property and equipment and capitalized software from continuing operations (TTM) (83,374 ) (83,560 ) (85,761 ) (79,501 ) (88,598 )

Free cash flow (TTM) $ 74,126 $ 168,937 $ 222,021 $ 266,801 $ 227,768

Net cash provided by (used in) investing activities from continuing operations $ (19,046 ) $ (35,175 ) $ (19,443 ) $ (28,541 ) $ (98,028 )

Net cash provided by (used in) financing activities $ (16,823 ) $ (21,088 ) $ (32,942 ) $ (138,227 ) $ (14,821 )

Net cash provided by (used in) investing activities from continuing operations (TTM) $ (137,527 ) $ (149,372 ) $ (105,821 ) $ (102,205 ) $ (181,187 )

Net cash provided by (used in) financing activities (TTM) $ (228,512 ) $ (194,156 ) $ (185,606 ) $ (209,080 ) $ (207,078 )

Other Metrics:

Active Customers ⁽⁶⁾

North America 23.5 24.1 24.6 24.9 25.2

EMEA 14.9 15.2 15.3 15.5 15.4

Rest of World 8.2 8.1 8.2 8.2 8.0

Total Active Customers 46.6 47.4 48.1 48.6 48.6

TTM Gross Billings / Average Active Customer⁽⁷⁾

North America $ 145 $ 147 $ 147 $ 148 $ 148

EMEA 142 139 134 130 123

Rest of World 108 105 101 98 99

Consolidated 137 137 135 133 132

Global headcount as of September 30, 2015 and 2014 was as follows:

Q3 2014 Q3 2015

Sales ⁽⁸⁾ 4,420 4,168

% North America 29 % 33 %

% EMEA 43 % 42 %

% Rest of World 28 % 25 %

Other 6,228 6,301

Total Headcount 10,648 10,469

(1) Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.

(2) Local represents deals from local merchants, deals with national merchants, and deals through local events. Other revenue transactions include advertising, payment processing, point of sale and commission revenue.

(3) Includes third party revenue, direct revenue and other revenue. Third party revenue is related to sales for which the Company acts as a marketing agent for the merchant. This revenue is recorded on a net basis. Direct revenue is primarily related to the sale of products for which the Company is the merchant of record. These revenues are accounted for on a gross basis, with the cost of inventory included in cost of revenue. Other revenue primarily consists of advertising revenue, payment processing revenue, point of sale revenue and commission revenue.

(4) Represents third party revenue, direct revenue and other revenue reduced by cost of revenue.

(5) Represents the change in financial measures that would have resulted had average exchange rates in the reporting periods been the same as those in effect in the prior year periods.

(6) Reflects the total number of unique user accounts who have purchased a voucher or product from us during the trailing twelve months.

(7) Reflects the total gross billings generated in the trailing twelve months per average active customer over that period.

(8) Includes merchant sales representatives, as well as sales support from continuing operations.

(9) Financial information and other metrics have been retrospectively adjusted to exclude Ticket Monster, which has been classified as discontinued operations.

(10) The definition, methodology and appropriateness of each of our supplemental metrics is reviewed periodically. As a result, metrics are subject to removal and/or change.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151103006897/en/

Groupon
Investor Relations
Genny Konz
Tom Grant
312-999-3098
ir@groupon.com
or
Public Relations
Bill Roberts
312-459-5191

Source: Groupon

November 3, 2015

Groupon Cuts Jobs, Exits Countries

Groupon announced that it is eliminating about 1,1000 jobs over the coming months. The cuts will mostly take place in its International Deal Factory and Customer Service. The company says it has streamlined its operation in these (and other) areas and that it is now able to do more with less.

In addition to the cuts, it is actually pulling its business out of some countries including Morocco, Panama, The Philippines, Puerto Rico, Taiwan, Thailand, and Uruguay. It recently exited Greece and Turkey as well.

Groupon COO Rich Williams writes in a blog post, “Two years ago, we started the ambitious process of unifying our global technology platforms, tools and processes. This One Playbook initiative was designed to help us replace years of technical debt and disparate operations with the products, tools and processes that drive our North American business. Our goal was to set the stage for Groupon’s next chapter–as a global company, with more leverage and efficiency in our core operations, and a stronger platform for growth. It’s been a huge undertaking, and we still have work to do, but our Operations teams, Engineering teams and many, many others have made amazing progress. Simply put, we are a stronger, faster Groupon today because of this work.”

“We’re also now in a position to realize the efficiencies we’ve been working so hard to gain, to further improve the way we operate around the world and — most importantly — continue to channel more and more of our resources toward long-term growth,” he adds. “Practically, this means we’re taking some broad restructuring actions to better focus our resources and streamline our international operations.”

He goes on to discuss how Groupon has evolved from a deals company to an ecommerce platform, noting that its operational model has to evolve along with that.

You can find an SEC filing from the company here, which notes that in connection with the restructuring, the company expects to record pre-tax charges of up to $35 million, including $22 million to $24 million in Q3.

Image via Groupon

September 22, 2015
Groupon To Go Is Exactly What It Sounds Like And It Just Launched

Groupon announced on Thursday it’s launching Groupon To Go, a nationwide delivery and takeout service the company says saves customers up to 10 percent on “every order”.

The offering will first roll out in Groupon’s hometown of Chicago, and will expand to other major markets throughout the year. Austin and Boston are next up, slated for launch this fall.

“Delivery and takeout is a natural extension of our local deals marketplace, adding hundreds of the best restaurants to Groupon––including many that haven’t offered online ordering until now,” a spokesperson for Groupon tells WebProNews. “Plus, food and beverage is already one of our most popular categories, and we’ve worked with tens of thousands of restaurants across the United States. Included in the launch of Groupon To Go are a number of national favorites, including Quiznos, Popeyes, Subway and Papa John’s.”

Also included in the Chicago roll-out are local restaurants Ditka’s Restaurant, Al’s Beef, Adobo Grill, BIG & little’s, Freshii, Rosati’s Pizza, Star of Siam and Wishbone.

“As an estimated $70 billion sector, the potential in delivery and takeout is apparent — especially with the growth of mobile — and Groupon’s engaged customer and merchant base, coupled with OrderUp’s technology and operations platform, brings tremendous scale to the space,” the spokesperson says.

Eventually, Groupon to Go will include order tracking, group ordering, and the ability to schedule delivery and takeout for another date and time. It will also one day offer delivery fulfillment services for participating restaurants, utilizing the technology and platform from recently acquired OrderUp. Groupon announced that acquisition just two weeks ago.

Restaurants who wish to participate in Groupon to Go can apply to do so here.

Images via Groupon

July 30, 2015
Groupon Offers $25,000 Stand-In For Sons On Mother’s Day
Oh, that Groupon.

The company just announced that for $25,000, it will send one of its employees to your mother’s house in your place on Mother’s Day.

“We recognize that it’s difficult for everyone to make it home for Mother’s Day,” a spokesperson for the company tells us in an email. “As a result, we’re offering the ultimate Mother’s Day experience called ‘A Mother’s Love is Priceless’ where for just $25,000 a perfect child stand-in, who is really a twenty-six year old adult male, will travel to Mom and spend the day with her.”

“Johnny Cadillac, the perfect child, will do all of the things that she has always lovingly nagged you to do such as eat five full servings of vegetables (at once), rinse dishes before placing them in the dishwasher, wear pants and even be nice to your sister,” the spokesperson adds.

This is classic Groupon. If you thought the company’s silly sense of humor went out the door with previous CEO Andrew Mason, you were obviously mistaken.

Can’t Make It Home for Mother’s Day? Groupon Will Send the Perfect Child in Your Place for $25,000 from Groupon on Vimeo.

“While you can’t really put a price tag on hanging out with Mom on Mother’s Day, we think we’ve found the next best solution,” says Cadillac in the press release “I’m incredibly skilled at all of the things Mom has always asked you to do––even though you and I both know they’re for your own good.”

Here’s what the entire “A Mother’s Love is Priceless” experience includes, according to the company:
- One Groupon employee to fill in for you with your mom on Mother’s Day
- 16 hours of enthusiastic obedience as your Groupon proxy dotes on your mother and completes common household chores
- Airfare for your Groupon proxy to travel to your mother’s home (valid only in the continental U.S.)
- A $5,000 shopping spree for Mom at her favorite local stores
- A one-day stretch limo rental
- House-cleaning services
- A family photo
- A catered, in-home family dinner for up to six people, including centerpieces, candelabras, linens and food
This all appears to be an attempt to remind consumers that Groupon has actual legitimate deals that might make ideal Mother’s Day gifts. You probably won’t have too hard a time finding those.

Images via Businesswire
May 7, 2015
Groupon Recalls Fake, Possibly Holey Condoms

Groupon Australia has admitted that it sold a bunch of counterfeit condoms that may, in fact, be full of holes.

The condoms were sold between March 12 and April 10. If you do the math, and it’s not a hard one, you’ll realize there’s a good chance many of these holey condoms have been deployed already.

According to the Australian Competition & Consumer Commission, the condoms were branded as Durex ‘Extra Safe’, ‘Thin Feel’ and ‘Performa’ varieties – but were in fact counterfeit.

“The condoms may be counterfeit products with defects such as holes in the latex,” says the ACCC. “The condoms may not prevent pregnancy or protect users against sexually transmitted diseases, which can result in serious illness or death.”

Oops.

The Australian government Department of Health has issued an advisory, saying,

“Counterfeiting is a problem for all major condom brands and consumers should be alert for potential fakes. Signs that might indicate a potential counterfeit products include suspiciously low prices, poor quality of printing on the packaging and whether information on the foil packaging of individual condoms match that on the box … In this situation, the seller was Edgelounge Enterprises (trading as Citrus Beat), who was responsible for direct shipment of the affected products to customers.”

Groupon has offered customers a full refund on any returned condoms.

“Customers are our utmost priority at Groupon and we take their health and safety very seriously. All customers who purchased the counterfeit products have been proactively contacted by Groupon notifying them of the recall and have been advised to discontinue use immediately, dispose or return the goods, and seek professional medical advice if they have concerns about their health,” said Groupon Australia in a statement.

According to The Independent, this is not a rare occurrence:

Counterfeiting is a serious problem for condom manufacturers, with cheap fake condoms being produced in their millions across the world, many of them in China.

Shanghai Police yesterday announced they had seized three million fake condoms that contained toxic metals, with officers reporting that the lubricant used to coat the condoms was so disgusting that it made them feel sick.

Bottom line: If you bought bulk condoms from a Groupon in Australia over the past month and a half – don’t use them.

Images via Shawn Latta, Flickr Creative Commons

April 23, 2015
Groupon Updates Us On Ideeli Growth

Back in January, Groupon acquired fashion retailer ideeli for $43 million in cash to extend its presence in fashion and apparel. Such offers had already been popular on Groupon, and the company pointed to research estimating the off-price fashion market to be around $40 billion.

“By adding ideeli to our family, we’re better suited to grab a bigger slice of this market as we continue to position Groupon as the place you start when you want to do or buy just about anything, anytime, anywhere,” a spokesperson for Groupon told us at the time.

“Groupon’s brand, reach and vision as an ecommerce destination make it a tremendous place to continue to grow our company,” said ideeli CEO Stefan Pepe.

Groupon just provided an update on that growth. According to the company, the site has become one of the fastest growing flash sale apparel sites in North America. Since the end of Q1, billings and active customers have each grown more than 15 percent. The number of branded sales, curated events, campaigns and products has increased more than 400 percent.

“In 2014, we’ve seen a great response from customers as we’ve significantly expanded our offers to deliver even more world-class brands at an incredible value,” said Lisa Kennedy, president of ideel. “As a result, we’re seeing more and more shoppers inspired by our curated selection of the latest trends in fashion coming to us through our website and mobile app to score huge savings.”

Since being acquired by Groupon, ideel has been expanding its offerings in women’s and men’s apparel, shoes and home decor.The leading categories of growth for ideel include: women’s ready-to-wear items such as dresses (both day and evening), sweaters, active and intimate apparel, accessories like designer handbags, sunglasses, watches and jewelry, shoes (especially boots) and men’s shirts and sweaters.

Image via ideeli

December 22, 2014
Groupon Broke Records Over The Holiday Weekend

Groupon announced that it experienced a record-breaking holiday weekend for deal sales in North America. The company says it had the most successful four days ever in its six-year history.

Black Friday and Cyber Monday specifically were the two biggest days in Groupon’s North American history. For the full Black Friday through Cyber Monday weekend, Groupon’s North American sales were up over 25% compared to last year.

“We just had our best days ever as a company as more and more shoppers are coming to Groupon via our popular mobile app to score big savings on a wide selection of amazing gifts,” said Groupon CEO Eric Lefkofsky. “With nearly double the number of deals compared to last year, we’re making it easier and quicker than ever for our customers to find something for everyone on their holiday list.”

It’s hard to believe it’s been so long, but we’re just about three months shy of when Groupon co-founder Andrew Mason was ousted from the CEO role at the company. Lefkofsky, who was previously executive chairman stepped in alongside Vice Chairman Ted Leonsis as Groupon looked for Mason’s replacement. Eventually, the company just named Lefkofsky its permanent CEO, and it seems like that’s working out pretty well. Mason has, in the meantime, started another company called Detour, which makes an interactive travel tour app.

During the holiday shopping period, Groupon saw big success on products in the electronics, household items, and jewelry categories. Big sellers included the ASUS Google Nexus tablet with 1080p HD display, Chromecast and Roku streaming devices, NFL ugly sweaters, a bObsweep robotic vacuum cleaner and mop, and 1.50 carat certified princess-cut or round diamond solitaire 14-karat gold rings.

Health and wellness and local experiences such as massages, movies, and holiday activities were also popular categories. Groupon says it saw a high volume of promo code redemptions for Best Buy, Macy’s, Nike, and Walmart.

The company recently launched a cashback-on-groceries app called Snap. Groupon says it saw users take advantage of cashback offers on turkey, cranberries and other popular holiday delicacies, though it didn’t give any specific numbers.

Last month, Groupon opened a holiday gift shop.

Image via Groupon

December 2, 2014
Groupon Getaways Gets Its Own App With ‘Flexible Search’

Groupon just announced the launch of a new travel discovery app based on its popular Groupon Getaways category. This would appear to follow the trend of big Internet companies breaking their services up into more dedicated apps.

The new Groupon Getaways app, the company says, includes “flexible search capabilities”. For example, no dates are required in searches. You can browse by theme, such as beaches, outdoors, or deals under $99. There’s also a customizable map search feature that lets you select an area by zooming in and out, and seeing Getaways hotel availability within a 30-mile radius.

The app points users to over 25,000 travel deals in destinations spanning the globe.

A spokesperson for the company said in an email, “Because we have so many great travel offerings, we created a standalone experience that offers customers an easy way to browse and book great deals using flexible search tools. Plus, travelers use travel apps. In fact, most smartphone users have a specific folder on their phone with all of the apps they use for travel––now we’re there.”

“Travel will still remain an integral part of the main Groupon app,” the spokesperson noted. “Groupon apps have been downloaded more than 100 million times worldwide.”

The app is available for both iPhone and Android in the U.S. and Canada.

Groupon is launching the app with an introductory promotion in which users can enter promo code (APP20) to save 20% on flash travel deals through Friday. There’s also a sweepstakes in which one person can win a Groupon Getaway valued up to $4,000.

Image via BusinessWire

November 10, 2014
Groupon Opens Holiday Gift Shop, Contest

Groupon just launched an online holiday gift shop to connect users with deals on stuff in their area, which they can buy as gifts for their friends and families. Just give Groupon your email address and zip code, and you’ll get an experience based on your local area.

Users can browse gifts for women, men, kids, and items under $50.

The shop’s launch is accompanied by a contest from the company in which five customers can win a $10,000 shopping spree.

“The Holiday Head Start Giveaway encourages customers to check Groupon today and tomorrow to see if they’re one of the five people to score a $10,000 holiday shopping spree,” Groupon said in its announcement. “Every customer will score between 5 and 100 percent off any one deal.”

The company suggests participants browse the gift shop for inspiration.

Groupon also released a Top 20 Toy List, which consists of: Barbie Sisters Deluxe Camper; WowWee Robosapien X Robot; My First Thomas & Friends Motion-Control Thomas; 4D Cityscape Puzzles; Lil Rider Power Ride-On; Deluxe Flutterbuy Light Up Fairy; MEGA BLOKS First Builder Bobby Barn Musical Farm Play Set; Frozen Dress Up Trunk; Hot Wheels Track Builder Stunt Action Set; Zoomer Dalmatian; X1 Helicopter + Nano Helicopter; MEGA BLOKS; HALO Quad Walker; Frozen Olaf, Anna and Elsa Pillow Pals; Black Series Monster Car; Discovery Kids Laptop; Nerf; Rebelle Agent Bow Bundle; Nerf Zombie Strike Slingfire; Disney Frozen Feature Castle; and VTech Smart Wheels Train Station.

For comparison, you can see Amazon’s toy list here.

You can find more details about the contest here.

Images via Groupon

November 5, 2014

Groupon Earnings Released, Revenue Up 27%

Groupon just released its earnings for the third quarter with revenue up 27% year-over-year at $757.1 million, GAAP loss per share of $0.03, and non-GAAP earnings per share of $0.03.

The company beat Wall Street expectations.

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

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

Here’s the release in its entirety:

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

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

Third Quarter 2014 Summary

Gross billings, which reflect the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds, increased 39% globally to $1.86 billion in the third quarter 2014, compared with $1.34 billion in the third quarter 2013. North America billings increased 16%, EMEA increased 10% and Rest of World increased 155%, driven by the first-quarter acquisition of Ticket Monster.

Revenue increased 27%, to $757.1 million in the third quarter 2014, compared with $595.1 million in the third quarter 2013.North America revenue increased 16%, EMEA increased 56% and Rest of World increased 26%.

Gross profit was $380.1 million in the third quarter 2014, compared with $359.6 million in the third quarter 2013.

Adjusted EBITDA, a non-GAAP financial measure, was $67.0 million in the third quarter 2014, compared with $62.3 million in the third quarter 2013, reflecting SG&A expense related to the Ticket Monster and ideel acquisitions, as well as an increase in overall marketing expense.

Third quarter 2014 net loss attributable to common stockholders was $21.2 million, or $0.03 per share. Earnings per share excluding stock compensation, amortization of acquired intangible assets, and acquisition-related costs of $46.1 million (or$38.7 million net of tax), a non-GAAP financial measure, was $0.03 per share.

Third quarter results included $18.6 million of pre-tax non-operating foreign currency losses and a $7.7 million decrease in liabilities for uncertain tax positions.

Operating cash flow for the trailing twelve months ended September 30, 2014 was $180.3 million. Free cash flow, a non-GAAP financial measure, was $25.4 million in the third quarter 2014, bringing free cash flow for the trailing twelve months endedSeptember 30, 2014 to $92.9 million.

At the end of the quarter, Groupon had $855.2 million in cash and cash equivalents.

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

Highlights

Units: Global units, defined as vouchers and products sold before cancellations and refunds, increased 92% year-over-year to 88 million in the third quarter 2014. North America units increased 11%, EMEA units increased 30% and Rest of World units increased 316%.

Active deals: At the end of the third quarter 2014, on average, active deals were approximately 300,000 globally, compared with more than 240,000 at the end of the second quarter 2014. North American active deals increased to over 120,000.

Active customers: Active customers, or customers that have purchased a voucher or product within the last twelve months, grew 24% year-over-year, to 52.7 million as of September 30, 2014, comprising 23.5 million in North America, 14.9 million in EMEA, and 14.3 million in Rest of World.

Customer spend: Third quarter 2014 trailing twelve month billings per average active customer was $149, compared with$141 in the second quarter 2014.

Mobile: Mobile mix, as measured by transactions completed on mobile devices, remains over half of the business. Over 100 million people have now downloaded Groupon mobile apps worldwide.

Marketplace: The rollout of Groupon’s marketplace (“Pull”) continued to gain traction. In the third quarter 2014, approximately 10% of total traffic in North America searched, with customers who searched spending significantly more than those who did not.

Rest of World: Rest of World billings grew 155% in the third quarter 2014, driven by Ticket Monster. As a result of the significant growth opportunities that exist for Ticket Monster, as well as for the Asian business more broadly, the company has hired financial advisers to evaluate a range of financing and strategic alternatives for those businesses that would, if pursued, unlock shareholder value.

Share Repurchase Program

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

2014 Investor and Analyst Day

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

Outlook

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

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

Conference Call

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

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

Non-GAAP Financial Measures

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

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

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

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

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

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

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

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

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

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

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

Note on Forward-Looking Statements

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

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

About Groupon

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

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

Groupon, Inc.

Summary Consolidated and Segment Results

(in thousands, except share and per share amounts)

(unaudited)

Three Months Ended Y/Y % Nine Months Ended Y/Y %

September 30, Growth September 30, Growth

Y/Y % excluding Y/Y % excluding

2014 2013 Growth FX Effect ⁽²⁾ FX ⁽²⁾ 2014 2013 Growth FX Effect ⁽²⁾ FX ⁽²⁾

Gross Billings ⁽¹⁾:

North America $ 774,286 $ 664,999 16.4 % $ (484 ) 16.5 % $ 2,354,900 $ 2,058,523 14.4 % $ (1,995 ) 14.5 %

EMEA 489,423 443,318 10.4 % 2,156 9.9 % 1,486,266 1,417,886 4.8 % 38,788 2.1 %

Rest of World 597,026 234,331 154.8 % 18,080 147.1 % 1,655,826 687,814 140.7 % 1,949 140.5 %

Consolidated gross billings $ 1,860,735 $ 1,342,648 38.6 % $ 19,752 37.1 % $ 5,496,992 $ 4,164,223 32.0 % $ 38,742 31.1 %

Revenue:

North America $ 418,494 $ 360,838 16.0 % $ (109 ) 16.0 % $ 1,273,487 $ 1,077,574 18.2 % $ (601 ) 18.2 %

EMEA 230,072 147,950 55.5 % 881 54.9 % 688,655 491,710 40.1 % 18,079 36.4 %

Rest of World 108,488 86,271 25.8 % (430 ) 26.3 % 304,125 235,924 28.9 % (12,854 ) 34.4 %

Consolidated revenue $ 757,054 $ 595,059 27.2 % $ 342 27.2 % $ 2,266,267 $ 1,805,208 25.5 % $ 4,624 25.3 %

(Loss) income from operations $ (5,429 ) $ 13,812 (139.3 ) % $ (159 ) (138.2 ) % $ (33,236 ) $ 62,402 (153.3 ) % $ 2,325 (157.0 ) %

Net loss attributable to Groupon, Inc. $ (21,208 ) $ (2,580 ) $ (81,878 ) $ (14,146 )

Net loss per share

Basic $ (0.03 ) $ (0.00 ) $ (0.12 ) $ (0.02 )

Diluted $ (0.03 ) $ (0.00 ) $ (0.12 ) $ (0.02 )

Weighted average number of shares outstanding

Basic 669,526,524 666,432,848 675,814,535 662,531,567

Diluted 669,526,524 666,432,848 675,814,535 662,531,567

(1) Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.

(2) Represents the change in financial measures that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three and nine months ended September 30, 2013.

Groupon, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

2014 2013 2014 2013

Operating activities

Net loss $ (19,018 ) $ (1,292 ) $ (75,303 ) $ (10,085 )

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization of property, equipment and software 26,317 17,816 71,476 49,186

Amortization of acquired intangible assets 11,829 5,333 36,068 16,131

Stock-based compensation 34,574 26,870 89,958 89,223

Deferred income taxes (2,472 ) (659 ) (1,956 ) (1,225 )

Excess tax benefits on stock-based compensation (2,641 ) (8,348 ) (12,573 ) (12,116 )

Loss on equity method investments 91 25 459 58

Net gain from changes in fair value of contingent consideration (1,020 ) (1,529 ) (1,059 ) (2,276 )

Impairment of investments 1,448 – 2,036 –

Change in assets and liabilities, net of acquisitions:

Restricted cash 6,040 (3,348 ) 6,961 (81 )

Accounts receivable (2,002 ) 11,940 (29,267 ) 8,999

Prepaid expenses and other current assets (26,499 ) (2,846 ) (32,397 ) 13,146

Accounts payable (3,811 ) (3,036 ) (8,964 ) (25,867 )

Accrued merchant and supplier payables (19,274 ) (34,315 ) (61,219 ) (72,290 )

Accrued expenses and other current liabilities 9,790 (20,553 ) (27,091 ) (27,790 )

Other, net 32,114 2,037 44,873 15,144

Net cash provided by (used in) operating activities 45,466 (11,905 ) 2,002 40,157

Net cash used in investing activities (20,461 ) (26,444 ) (193,567 ) (72,985 )

Net cash used in financing activities (16,823 ) (8,970 ) (173,068 ) (26,253 )

Effect of exchange rate changes on cash and cash equivalents (21,102 ) 5,165 (20,671 ) (10,351 )

Net decrease in cash and cash equivalents (12,920 ) (42,154 ) (385,304 ) (69,432 )

Cash and cash equivalents, beginning of period 868,088 1,182,011 1,240,472 1,209,289

Cash and cash equivalents, end of period $ 855,168 $ 1,139,857 $ 855,168 $ 1,139,857

Groupon, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(unaudited)

Three Months Ended September 30, Nine Months Ended September 30,

2014 2013 2014 2013

Revenue:

Third party and other $ 399,803 $ 394,987 $ 1,232,173 $ 1,252,966

Direct 357,251 200,072 1,034,094 552,242

Total revenue 757,054 595,059 2,266,267 1,805,208

Cost of revenue:

Third party and other 61,497 54,001 182,226 179,524

Direct 315,413 181,436 928,314 502,359

Total cost of revenue 376,910 235,437 1,110,540 681,883

Gross profit 380,144 359,622 1,155,727 1,123,325

Operating expenses:

Marketing 59,935 53,265 203,134 158,319

Selling, general and administrative 325,942 294,074 983,751 904,880

Acquisition-related (benefit) expense, net (304 ) (1,529 ) 2,078 (2,276 )

Total operating expenses 385,573 345,810 1,188,963 1,060,923

(Loss) income from operations (5,429 ) 13,812 (33,236 ) 62,402

Other (expense) income, net ⁽¹⁾ (20,023 ) 832 (21,886 ) (9,830 )

(Loss) income before (benefit) provision for income taxes (25,452 ) 14,644 (55,122 ) 52,572

(Benefit) provision for income taxes (6,434 ) 15,936 20,181 62,657

Net loss (19,018 ) (1,292 ) (75,303 ) (10,085 )

Net income attributable to noncontrolling interests (2,190 ) (1,288 ) (6,575 ) (4,061 )

Net loss attributable to Groupon, Inc. $ (21,208 ) $ (2,580 ) $ (81,878 ) $ (14,146 )

Net loss per share

Basic $ (0.03 ) $ (0.00 ) $ (0.12 ) $ (0.02 )

Diluted $ (0.03 ) $ (0.00 ) $ (0.12 ) $ (0.02 )

Weighted average number of shares outstanding

Basic 669,526,524 666,432,848 675,814,535 662,531,567

Diluted 669,526,524 666,432,848 675,814,535 662,531,567

(1) Other (expense) income, net includes foreign currency (losses) gains of ($18,638) and $326 for the three months endedSeptember 30, 2014 and 2013, respectively, and ($20,108) and ($11,156) for the nine months ended September 30, 2014 and 2013, respectively.

Groupon, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

September 30, 2014 December 31, 2013

(unaudited)

Assets

Current assets:

Cash and cash equivalents $ 855,168 $ 1,240,472

Accounts receivable, net 124,598 83,673

Deferred income taxes 26,564 27,938

Prepaid expenses and other current assets 243,750 210,415

Total current assets 1,250,080 1,562,498

Property, equipment and software, net 170,534 134,423

Goodwill 441,290 220,827

Intangible assets, net 119,810 28,443

Investments 23,639 20,652

Deferred income taxes, non-current 44,709 35,941

Other non-current assets 22,103 39,226

Total Assets $ 2,072,165 $ 2,042,010

Liabilities and Equity

Current liabilities:

Accounts payable $ 25,848 $ 27,573

Accrued merchant and supplier payables 754,628 752,943

Accrued expenses 223,677 226,986

Deferred income taxes 44,787 47,558

Other current liabilities 134,116 132,718

Total current liabilities 1,183,056 1,187,778

Deferred income taxes, non-current 9,668 10,853

Other non-current liabilities 151,486 131,697

Total Liabilities 1,344,210 1,330,328

Commitments and contingencies

Stockholders’ Equity

Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized, 694,272,530 shares issued and 668,185,526 shares outstanding atSeptember 30, 2014 and 670,149,976 shares issued and 665,717,176 shares outstanding at December 31, 2013 70 67

Class B common stock, par value $0.0001 per share, 10,000,000 shares authorized, 2,399,976 shares issued and outstanding at September 30, 2014 and December 31, 2013 – –

Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized, no shares issued and outstanding at September 30, 2014 and December 31, 2013 – –

Additional paid-in capital 1,814,040 1,584,211

Treasury stock, at cost, 26,087,004 shares at September 30, 2014 and 4,432,800 shares at December 31, 2013 (190,355 ) (46,587 )

Accumulated deficit (930,748 ) (848,870 )

Accumulated other comprehensive income 34,948 24,830

Total Groupon, Inc. Stockholders’ Equity 727,955 713,651

Noncontrolling interests – (1,969 )

Total Equity 727,955 711,682

Total Liabilities and Equity $ 2,072,165 $ 2,042,010

Groupon, Inc.

Segment Information

(in thousands)

(unaudited)

Three Months Ended September 30, Nine Months Ended September 30,

2014 2013 2014 2013

North America

Gross billings⁽¹⁾ $ 774,286 $ 664,999 $ 2,354,900 $ 2,058,523

Revenue $ 418,494 $ 360,838 $ 1,273,487 $ 1,077,574

Segment cost of revenue and operating expenses ⁽²⁾ 405,910 335,670 1,234,973 962,532

Segment operating income ⁽²⁾ $ 12,584 $ 25,168 $ 38,514 $ 115,042

Segment operating income as a percent of segment gross billings 1.6 % 3.8 % 1.6 % 5.6 %

Segment operating income as a percent of segment revenue 3.0 % 7.0 % 3.0 % 10.7 %

EMEA

Gross billings ⁽¹⁾ $ 489,423 $ 443,318 $ 1,486,266 $ 1,417,886

Revenue $ 230,072 $ 147,950 $ 688,655 $ 491,710

Segment cost of revenue and operating expenses ⁽²⁾ 207,643 132,346 619,594 417,222

Segment operating income ⁽²⁾ $ 22,429 $ 15,604 $ 69,061 $ 74,488

Segment operating income as a percent of segment gross billings 4.6 % 3.5 % 4.6 % 5.3 %

Segment operating income as a percent of segment revenue 9.7 % 10.5 % 10.0 % 15.1 %

Rest of World

Gross billings ⁽¹⁾ $ 597,026 $ 234,331 $ 1,655,826 $ 687,814

Revenue $ 108,488 $ 86,271 $ 304,125 $ 235,924

Segment cost of revenue and operating expenses ⁽²⁾ 114,660 87,890 352,900 276,105

Segment operating loss ⁽²⁾ $ (6,172 ) $ (1,619 ) $ (48,775 ) $ (40,181 )

Segment operating loss as a percent of segment gross billings (1.0 ) % (0.7 ) % (2.9 ) % (5.8 ) %

Segment operating loss as a percent of segment revenue (5.7 ) % (1.9 ) % (16.0 ) % (17.0 ) %

(1) Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.

(2) Segment cost of revenue and operating expenses and segment operating income (loss) exclude stock-based compensation and acquisition-related (benefit) expense, net.

Groupon, Inc.

Non-GAAP Reconciliation Schedules

(in thousands, except share and per share amounts)

(unaudited)

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

The following is a quarterly reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, ”Net loss.”

Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Net loss $ (1,292 ) $ (78,861 ) $ (35,363 ) $ (20,922 ) $ (19,018 )

Adjustments:

Stock-based compensation 26,870 32,239 23,729 31,655 34,574

Acquisition-related (benefit) expense, net (1,529 ) 2,265 1,785 597 (304 )

Depreciation and amortization 23,149 24,132 34,740 34,658 38,146

Other (income) expense, net (832 ) 84,833 840 1,023 20,023

Provision (benefit) for income taxes 15,936 7,380 14,570 12,045 (6,434 )

Total adjustments 63,594 150,849 75,664 79,978 86,005

Adjusted EBITDA $ 62,302 $ 71,988 $ 40,301 $ 59,056 $ 66,987

The following is a reconciliation of diluted net loss per share to diluted earnings per share excluding stock-based compensation, amortization of acquired intangible assets and acquisition-related (benefit) expense, net for the three and nine months endedSeptember 30, 2014:

Three Months Ended Nine Months Ended

September 30, 2014 September 30, 2014

Net loss attributable to common stockholders $ (21,208 ) $ (81,878 )

Stock-based compensation 34,574 89,958

Amortization of acquired intangible assets 11,829 36,068

Acquisition-related (benefit) expense, net (304 ) 2,078

Income tax effect of adjustments (7,361 ) (31,090 )

Net earnings attributable to common stockholders excluding stock-based compensation,

amortization of acquired intangible assets and acquisition-related (benefit) expense, net $ 17,530 $ 15,136

Diluted shares 669,526,524 675,814,535

Incremental diluted shares 8,907,050 10,317,632

Adjusted diluted shares 678,433,574 686,132,167

Diluted net loss per share $ (0.03 ) $ (0.12 )

Impact of stock-based compensation, amortization of acquired intangible assets

and acquisition-related (benefit) expense, net ⁽¹⁾ 0.06 0.14

Diluted earnings per share excluding stock-based compensation, amortization of acquired

intangible assets and acquisition-related (benefit) expense, net ⁽¹⁾ $ 0.03 $ 0.02

(1) The sum of per share amounts for quarterly periods may not equal year-to-date amounts due to rounding.

Foreign exchange rate neutral operating results are non-GAAP financial measures. The Company reconciles foreign exchange rate neutral operating results to the most comparable U.S. GAAP financial measures, ”Gross billings,” ”Revenue” and ”(Loss) income from operations,” respectively, for the periods presented. The Company reconciles ”foreign exchange rate neutral Gross billings growth” and ”foreign exchange rate neutral Revenue growth” to year-over-year growth rates for the most comparable U.S. GAAP financial measures, ”Gross billings growth” and ”Revenue growth,” respectively, for the periods presented.

The effect on the Company’s gross billings, revenue and loss from operations from changes in exchange rates versus the U.S. Dollar for the three months ended September 30, 2014 was as follows:

Three Months Ended September 30, 2014 Three Months Ended September 30, 2014

At Avg. Exchange At Avg. Exchange

Q3 2013 Rate As Q2 2014 Rate As

Rates ⁽¹⁾ Effect ⁽²⁾ Reported Rates ⁽³⁾ Effect ⁽²⁾ Reported

Gross billings $ 1,840,983 $ 19,752 $ 1,860,735 $ 1,877,385 $ (16,650 ) $ 1,860,735

Revenue $ 756,712 $ 342 $ 757,054 $ 765,015 $ (7,961 ) $ 757,054

Loss from operations $ (5,270 ) $ (159 ) $ (5,429 ) $ (5,335 ) $ (94 ) $ (5,429 )

The effect on the Company’s gross billings, revenue and (loss) income from operations from changes in exchange rates versus the U.S. Dollar for the nine months ended September 30, 2014 was as follows:

Nine Months Ended September 30, 2014 Nine Months Ended September 30, 2014

At Avg. Exchange At Avg. Exchange

Q3 2013 YTD Rate As Q4’13 – Q2’14 Rate As

Rates ⁽¹⁾ Effect ⁽²⁾ Reported Rates ⁽³⁾ Effect ⁽²⁾ Reported

Gross billings $ 5,458,250 $ 38,742 $ 5,496,992 $ 5,503,487 $ (6,495 ) $ 5,496,992

Revenue $ 2,261,643 $ 4,624 $ 2,266,267 $ 2,273,122 $ (6,855 ) $ 2,266,267

(Loss) income from operations $ (35,561 ) $ 2,325 $ (33,236 ) $ (33,353 ) $ 117 $ (33,236 )

(1) Represents the financial statement balances that would have resulted had average exchange rates in the reporting period been the same as those in effect during the three and nine months ended September 30, 2013.

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

(3) Represents the financial statement balances that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three and nine months ended June 30, 2014.

The following is a quarterly reconciliation of foreign exchange rate neutral Gross billings growth from the comparable quarterly periods of the prior year to reported Gross billings growth from the comparable quarterly periods of the prior year.

Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

EMEA Gross billings growth, excluding FX 9 % 3 % 1 % (4 ) % 10 %

FX Effect 3 % 3 % 3 % 4 % – %

EMEA Gross billings growth 12 % 6 % 4 % – % 10 %

Rest of World Gross billings growth, excluding FX (4 ) % (2 ) % 133 % 141 % 147 %

FX Effect (9 ) % (9 ) % (10 ) % 4 % 8 %

Rest of World Gross billings growth (13 ) % (11 ) % 123 % 145 % 155 %

Consolidated Gross billings growth, excluding FX 11 % 5 % 30 % 27 % 37 %

FX Effect (1 ) % – % (1 ) % 2 % 2 %

Consolidated Gross billings growth 10 % 5 % 29 % 29 % 39 %

The following is a quarterly reconciliation of foreign exchange rate neutral Revenue growth from the comparable quarterly periods of the prior year to reported Revenue growth from the comparable quarterly periods of the prior year.

Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

EMEA Revenue growth, excluding FX (23 ) % 38 % 22 % 36 % 55 %

FX Effect 2 % 5 % 4 % 6 % 1 %

EMEA Revenue growth (21 ) % 43 % 26 % 42 % 56 %

Rest of World Revenue growth, excluding FX 7 % (6 ) % 35 % 44 % 26 %

FX Effect (11 ) % (9 ) % (12 ) % (4 ) % – %

Rest of World Revenue growth (4 ) % (15 ) % 23 % 40 % 26 %

Consolidated Revenue growth, excluding FX 6 % 20 % 26 % 22 % 27 %

FX Effect (1 ) % – % – % 2 % – %

Consolidated Revenue growth 5 % 20 % 26 % 24 % 27 %

Groupon, Inc.

Supplemental Financial Information and Business Metrics ⁽¹¹⁾

(financial data in thousands; active customers in millions)

(unaudited)

Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Segments

North America Segment:

Gross Billings ⁽¹⁾:

Local ⁽²⁾ Gross Billings $ 405,913 $ 439,131 $ 456,952 $ 461,366 $ 446,573

Goods Gross Billings 194,565 286,039 242,896 247,618 242,893

Travel ⁽²⁾ Gross Billings 64,521 63,551 81,921 89,861 84,820

Total Gross Billings $ 664,999 $ 788,721 $ 781,769 $ 798,845 $ 774,286

Year-over-year growth 20 % 10 % 15 % 12 % 16 %

% Third Party and Other 72 % 67 % 70 % 70 % 69 %

% Direct 28 % 33 % 30 % 30 % 31 %

Gross Billings Trailing Twelve Months (TTM) $ 2,777,475 $ 2,847,244 $ 2,947,694 $ 3,034,334 $ 3,143,621

Revenue ⁽³⁾:

Local Revenue $ 162,346 $ 161,601 $ 177,247 $ 164,500 $ 161,912

Goods Revenue 185,914 268,281 237,435 241,626 238,955

Travel Revenue 12,578 13,902 16,380 17,805 17,627

Total Revenue $ 360,838 $ 443,784 $ 431,062 $ 423,931 $ 418,494

Year-over-year growth 24 % 18 % 27 % 12 % 16 %

% Third Party and Other 49 % 41 % 45 % 43 % 43 %

% Direct 51 % 59 % 55 % 57 % 57 %

Revenue TTM $ 1,452,925 $ 1,521,358 $ 1,612,866 $ 1,659,615 $ 1,717,271

Gross Profit ⁽⁴⁾:

Local Gross Profit $ 138,890 $ 140,944 $ 152,622 $ 142,674 $ 138,189

% of North America Total Local Gross Billings 34.2 % 32.1 % 33.4 % 30.9 % 30.9 %

Goods Gross Profit 21,609 21,030 12,604 22,961 23,953

% of North America Total Goods Gross Billings 11.1 % 7.4 % 5.2 % 9.3 % 9.9 %

Travel Gross Profit 11,070 12,352 14,442 14,365 14,000

% of North America Total Travel Gross Billings 17.2 % 19.4 % 17.6 % 16.0 % 16.5 %

Total Gross Profit $ 171,569 $ 174,326 $ 179,668 $ 180,000 $ 176,142

Year-over-year growth 7 % 15 % 4 % (7 ) % 3 %

% Third Party and Other 90 % 91 % 94 % 88 % 87 %

% Direct 10 % 9 % 6 % 12 % 13 %

% of North America Total Gross Billings 25.8 % 22.1 % 23.0 % 22.5 % 22.7 %

EMEA Segment:

Gross Billings:

Local Gross Billings $ 207,803 $ 277,472 $ 262,141 $ 227,266 $ 218,615

Goods Gross Billings 169,849 219,880 183,013 190,957 191,006

Travel Gross Billings 65,666 68,361 68,434 65,032 79,802

Total Gross Billings $ 443,318 $ 565,713 $ 513,588 $ 483,255 $ 489,423

Year-over-year growth 12 % 6 % 4 % – % 10 %

Year-over-year growth, excluding FX⁽⁵⁾ 9 % 3 % 1 % (4 ) % 10 %

% Third Party and Other 98 % 83 % 83 % 80 % 78 %

% Direct 2 % 17 % 17 % 20 % 22 %

Gross Billings TTM $ 1,950,367 $ 1,983,599 $ 2,004,869 $ 2,005,874 $ 2,051,979

Revenue:

Local Revenue $ 92,141 $ 116,061 $ 109,120 $ 96,485 $ 90,002

Goods Revenue 41,279 119,274 106,889 115,413 123,110

Travel Revenue 14,530 15,870 14,884 15,792 16,960

Total Revenue $ 147,950 $ 251,205 $ 230,893 $ 227,690 $ 230,072

Year-over-year growth (21 ) % 43 % 26 % 42 % 56 %

Year-over-year growth, excluding FX (23 ) % 38 % 22 % 36 % 55 %

% Third Party and Other 94 % 61 % 61 % 57 % 53 %

% Direct 6 % 39 % 39 % 43 % 47 %

Revenue TTM $ 667,988 $ 742,915 $ 790,010 $ 857,738 $ 939,860

Gross Profit:

Local Gross Profit $ 81,808 $ 105,210 $ 100,066 $ 90,373 $ 83,956

% of EMEA Total Local Gross Billings 39.4 % 37.9 % 38.2 % 39.8 % 38.4 %

Goods Gross Profit 28,943 33,526 27,302 35,432 32,252

% of EMEA Total Goods Gross Billings 17.0 % 15.2 % 14.9 % 18.6 % 16.9 %

Travel Gross Profit 12,930 14,457 13,669 14,894 15,440

% of EMEA Total Travel Gross Billings 19.7 % 21.1 % 20.0 % 22.9 % 19.3 %

Total Gross Profit $ 123,681 $ 153,193 $ 141,037 $ 140,699 $ 131,648

Year-over-year growth (24 ) % 7 % (8 ) % 1 % 6 %

% Third Party and Other 99 % 91 % 92 % 85 % 85 %

% Direct 1 % 9 % 8 % 15 % 15 %

% of EMEA Total Gross Billings 27.9 % 27.1 % 27.5 % 29.1 % 26.9 %

Rest of World Segment:

Gross Billings:

Local Gross Billings $ 118,718 $ 116,824 $ 167,833 $ 170,237 $ 190,254

Goods Gross Billings 78,973 89,451 283,091 281,300 289,210

Travel Gross Billings 36,640 32,398 70,930 85,409 117,562

Total Gross Billings $ 234,331 $ 238,673 $ 521,854 $ 536,946 $ 597,026

Year-over-year growth (13 ) % (11 ) % 123 % 145 % 155 %

Year-over-year growth, excluding FX (4 ) % (2 ) % 133 % 141 % 147 %

% Third Party and Other 97 % 97 % 99 % 99 % 98 %

% Direct 3 % 3 % 1 % 1 % 2 %

Gross Billings TTM $ 956,833 $ 926,487 $ 1,214,209 $ 1,531,804 $ 1,894,499

Revenue:

Local Revenue $ 51,900 $ 40,847 $ 43,814 $ 42,711 $ 45,085

Goods Revenue 25,061 26,158 41,855 45,537 48,889

Travel Revenue 9,310 6,453 10,013 11,707 14,514

Total Revenue $ 86,271 $ 73,458 $ 95,682 $ 99,955 $ 108,488

Year-over-year growth (4 ) % (15 ) % 23 % 40 % 26 %

Year-over-year growth, excluding FX 7 % (6 ) % 35 % 44 % 26 %

% Third Party and Other 91 % 90 % 94 % 93 % 90 %

% Direct 9 % 10 % 6 % 7 % 10 %

Revenue TTM $ 322,597 $ 309,382 $ 327,014 $ 355,366 $ 377,583

Gross Profit:

Local Gross Profit $ 44,435 $ 33,596 $ 34,748 $ 35,618 $ 38,592

% of Rest of World Total Local Gross Billings 37.4 % 28.8 % 20.7 % 20.9 % 20.3 %

Goods Gross Profit 12,016 11,781 22,135 24,623 22,877

% of Rest of World Total Goods Gross Billings 15.2 % 13.2 % 7.8 % 8.8 % 7.9 %

Travel Gross Profit 7,921 5,312 8,133 8,922 10,885

% of Rest of World Total Travel Gross Billings 21.6 % 16.4 % 11.5 % 10.4 % 9.3 %

Total Gross Profit $ 64,372 $ 50,689 $ 65,016 $ 69,163 $ 72,354

Year-over-year growth 1 % (16 ) % 23 % 37 % 12 %

% Third Party and Other 99 % 101 % 102 % 100 % 102 %

% Direct 1 % (1 ) % (2 ) % – % (2 ) %

% of Rest of World Total Gross Billings 27.5 % 21.2 % 12.5 % 12.9 % 12.1 %

Consolidated Results of Operations:

Gross Billings:

Local Gross Billings $ 732,434 $ 833,427 $ 886,926 $ 858,869 $ 855,442

Goods Gross Billings 443,387 595,370 709,000 719,875 723,109

Travel Gross Billings 166,827 164,310 221,285 240,302 282,184

Total Gross Billings $ 1,342,648 $ 1,593,107 $ 1,817,211 $ 1,819,046 $ 1,860,735

Year-over-year growth 10 % 5 % 29 % 29 % 39 %

Year-over-year growth, excluding FX 11 % 5 % 30 % 27 % 37 %

% Third Party and Other 85 % 77 % 82 % 81 % 81 %

% Direct 15 % 23 % 18 % 19 % 19 %

Gross Billings TTM $ 5,684,675 $ 5,757,330 $ 6,166,772 $ 6,572,012 $ 7,090,099

Year-over-year growth 12 % 7 % 14 % 18 % 25 %

Revenue:

Local Revenue $ 306,387 $ 318,509 $ 330,181 $ 303,696 $ 296,999

Goods Revenue 252,254 413,713 386,179 402,576 410,954

Travel Revenue 36,418 36,225 41,277 45,304 49,101

Total Revenue $ 595,059 $ 768,447 $ 757,637 $ 751,576 $ 757,054

Year-over-year growth 5 % 20 % 26 % 23 % 27 %

Year-over-year growth, excluding FX 6 % 20 % 26 % 22 % 27 %

% Third Party and Other 66 % 52 % 56 % 54 % 53 %

% Direct 34 % 48 % 44 % 46 % 47 %

Revenue TTM $ 2,443,510 $ 2,573,655 $ 2,729,890 $ 2,872,719 $ 3,034,714

Year-over-year growth 12 % 10 % 15 % 19 % 24 %

Gross Profit:

Local Gross Profit $ 265,133 $ 279,750 $ 287,436 $ 268,665 $ 260,737

% of Total Consolidated Local Gross Billings 36.2 % 33.6 % 32.4 % 31.3 % 30.5 %

Goods Gross Profit 62,568 66,337 62,041 83,016 79,082

% of Total Consolidated Goods Gross Billings 14.1 % 11.1 % 8.8 % 11.5 % 10.9 %

Travel Gross Profit 31,921 32,121 36,244 38,181 40,325

% of Total Consolidated Travel Gross Billings 19.1 % 19.5 % 16.4 % 15.9 % 14.3 %

Total Gross Profit $ 359,622 $ 378,208 $ 385,721 $ 389,862 $ 380,144

Year-over-year growth (7 ) % 6 % 2 % 1 % 6 %

% Third Party and Other 95 % 92 % 94 % 89 % 89 %

% Direct 5 % 8 % 6 % 11 % 11 %

% of Total Consolidated Gross Billings 26.8 % 23.7 % 21.2 % 21.4 % 20.4 %

Adjusted EBITDA $ 62,302 $ 71,988 $ 40,301 $ 59,056 $ 66,987

% of Total Consolidated Gross Billings 4.6 % 4.5 % 2.2 % 3.2 % 3.6 %

% of Total Consolidated Revenue 10.5 % 9.4 % 5.3 % 7.9 % 8.8 %

Free cash flow is a non-GAAP financial measure. The following is a reconciliation of free cash flow to the most comparable U.S. GAAP financial measure, ”Net cash provided by (used in) operating activities.”

Net cash (used in) provided by operating activities $ (11,905 ) $ 178,275 $ (20,717 ) $ (22,747 ) $ 45,466

Purchases of property and equipment and capitalized software (15,064 ) (19,931 ) (16,355 ) (31,053 ) (20,053 )

Free cash flow $ (26,969 ) $ 158,344 $ (37,072 ) $ (53,800 ) $ 25,413

Net cash provided by operating activities (TTM) $ 105,874 $ 218,432 $ 188,955 $ 122,906 $ 180,277

Purchases of property and equipment and capitalized software (TTM) (83,608 ) (63,505 ) (65,392 ) (82,403 ) (87,392 )

Free cash flow (TTM) $ 22,266 $ 154,927 $ 123,563 $ 40,503 $ 92,885

Net cash used in investing activities $ (26,444 ) $ (23,330 ) $ (138,608 ) $ (34,498 ) $ (20,461 )

Net cash used in financing activities $ (8,970 ) $ (55,444 ) $ (41,492 ) $ (114,753 ) $ (16,823 )

Net cash used in investing activities (TTM) $ (125,738 ) $ (96,315 ) $ (204,244 ) $ (222,880 ) $ (216,897 )

Net cash used in financing activities (TTM) $ (32,748 ) $ (81,697 ) $ (113,847 ) $ (220,659 ) $ (228,512 )

Other Metrics:

Active Customers⁽⁶⁾

North America 19.9 20.8 21.8 22.6 23.5

EMEA 14.0 14.2 14.5 14.5 14.9

Rest of World ⁽⁷⁾ 8.7 8.7 14.1 14.5 14.3

Total Active Customers ⁽⁸⁾ 42.6 43.7 50.4 51.6 52.7

TTM Gross Billings / Average Active Customer ⁽⁹⁾

North America $ 155 $ 150 $ 147 $ 145 $ 145

EMEA $ 137 $ 139 $ 141 $ 141 $ 142

Rest of World ⁽⁷⁾ $ 109 $ 104 $ 106 $ 132 $ 165

Consolidated ⁽⁸⁾ $ 139 $ 137 $ 135 $ 141 $ 149

Headcount

Sales ⁽¹⁰⁾ 4,801 4,834 5,231 5,057 4,929

% North America 28 % 29 % 27 % 26 % 26 %

% EMEA 37 % 37 % 37 % 39 % 39 %

% Rest of World 35 % 34 % 36 % 35 % 35 %

Other 6,453 6,449 7,099 6,888 6,827

Total Headcount 11,254 11,283 12,330 11,945 11,756

(1) Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.

(2) Local represents deals from local merchants, deals with national merchants, and deals through local events. Other revenue transactions, which include advertising, payment processing, point of sale and commission revenue, were previously aggregated with our Travel category. During the three months ended March 31, 2014, the Company updated its presentation of category information to include gross billings, revenue and gross profit from those other revenue sources within the Local category, and prior period category information has been retrospectively adjusted to conform to the current period presentation.

(3) Includes third party revenue, direct revenue and other revenue. Third party revenue is related to sales for which the Company acts as a marketing agent for the merchant. This revenue is recorded on a net basis. Direct revenue is primarily related to the sale of products for which the Company is the merchant of record. These revenues are accounted for on a gross basis, with the cost of inventory included in cost of revenue. Other revenue primarily consists of advertising revenue, payment processing revenue, point of sale revenue and commission revenue.

(4) Represents third party revenue, direct revenue and other revenue reduced by cost of revenue. Cost of revenue is comprised of direct and certain indirect costs incurred to generate revenue. Third party cost of revenue includes estimated refunds for which the merchant’s share is not recoverable. Direct cost of revenue includes the cost of inventory, shipping and fulfillment costs and inventory markdowns. Other costs incurred to generate revenue are allocated to cost of third party and other revenue and direct revenue for each of our categories (Local, Goods, and Travel) in proportion to gross billings during the period.

(5) Represents the change in financial measures that would have resulted had average exchange rates in the reporting periods been the same as those in effect in the prior year period.

(6) Reflects the total number of unique user accounts who have purchased a voucher or product from us during the trailing twelve months.

(7) Active customers in our Rest of World segment as of September 30, 2013, December 31, 2013, March 31, 2014, and June 30, 2014 have been reduced by 0.9 million, 1.2 million, 1.4 million, and 1.6 million, respectively, from the amounts previously reported to correct that operational information. Those adjustments increased TTM gross billings per average active customer in our Rest of World segment for the 12-month periods ended September 30, 2013, December 31, 2013, March 31, 2014, and June 30, 2014 by$7, $9, $9, and $13, respectively, from the amounts previously reported.

(8) The adjustments of active customers in our Rest of World segment as of September 30, 2013, December 31, 2013, March 31, 2014, and June 30, 2014, described in footnote (7) above, reduced consolidated active customers by the same amounts. Those adjustments increased consolidated TTM gross billings per average active customer for the 12-month periods ended September 30, 2013, December 31, 2013, March 31, 2014, and June 30, 2014 by $2, $3, $3, and $4, respectively, from the amounts previously reported.

(9) Reflects the total gross billings generated in the trailing twelve months per average active customer over that period.

(10) Includes merchant sales representatives, as well as sales support.

(11) The definition, methodology and appropriateness of each of our supplemental metrics is reviewed periodically. As a result, metrics are subject to removal and/or change.

Groupon, Inc.

Image via Groupon

October 30, 2014

Groupon Wants To Get Your Business Found In The Search Engines

Groupon announced what it’s referring to as a “bold initiative to build a page that lives on Groupon and search engines for almost every local business in the United States.”

The initiative is called Groupon Pages, and is essentially business listings on Groupon, but those that should turn up in a search on Google or Bing, not entirely unlike Yelp pages.

“By giving local businesses access to the millions of people that search our marketplace, we’re dramatically increasing the number of merchants on Groupon and providing our customers with yet another reason to always check Groupon first,” a spokesperson for the company tells WebProNews in an email.

We’ll see if the search engines think these are the pages consumers should be checking first.

“We’ve already built more than 7 million pages and collected more than 20 million validated ratings and helpful tips from real customers to highlight the unique aspects of these local businesses,” they add. “Ex. There might be 10 sushi restaurants in the Lincoln Park neighborhood of Chicago. (There are probably more.) We’re still going to show you the four places where we’re currently running a Groupon deal, but we’re also going to show you ratings, tips, money-saving opportunities and other useful information for the other six businesses.”

The company says it’s leveraging its “vast knowledge and experience in local commerce” to create transactional spaces for merchants, where people can also find deals, which can influence their purchases.

Merchants can claim a page, and manage its content. The pages can be personalized, and can include links, business hours, phone numbers, addresses, photos, and testimonials. Merchants can publish specials, coupons, and promotions.

Groupon will provide feedback to businesses based on surveys they send out every time customers redeem deals or claim merchant coupons/specials. The pages let merchants directly engage with customers who leave feedback, which can be helpful whether it’s positive or negative.

On the consumer side, people can follow specific merchants, and get updates about them, including new deals. They can also request deals. If enough people request one for a business that isn’t running a deal, Groupon will reach out to the merchant to try to come up with one.

People can also use business pages to recommend the business to others and leave tips. They can even earn verified status.

The most beneficial part of all of this for businesses may be increased search visibility, assuming Google ranks these pages favorably, which seems like a real possibility.

Image via BusinessWire

October 22, 2014
Groupon Updates App With Apple Pay Support

Apple officially launched Apple Pay, its new payments product, via an update to iOS 8 today. Third-party apps are also getting updates to add support for it.

Groupon announced that it has updated its iPhone app to include it as a payment option. iPhone 6 and 6 Plus users in the U.S. can take advantage.

“To use the new payments service, existing customers need to download iOS 8.1, install Apple Pay, update the Groupon app and select Apple Pay on the purchase confirmation screen. New Groupon customers need to do the same and their method of payment will automatically default to Apple Pay,” Groupon says.

“With nearly 92 million app downloads worldwide and more than half of our transactions occurring on mobile devices, Groupon is one of the largest mobile commerce companies in the world,” says Groupon CEO Eric Lefkofsky. “Bringing Apple Pay to the Groupon mobile app makes it easier than ever to find and buy the best things around you.”

Groupon’s app is one of the 25 most-downloaded free apps in the App Store.

Image via BusinessWire

October 20, 2014
Groupon Launches Cash For Grocery-Buying App Snap
Groupon just launched a new app for iPhone and Android called Snap, which gives users cash back on certain products they buy. Basically, you go grocery shopping, then find the participating items in the app, and scan your receipts to get cash back on those items. It doesn’t even matter where you did your shopping.

According to Groupon, it works if you do your shopping at any grocery store or retailer in the United States or Canada. You can cash out once you reach a total of $20.

Among the current featured offers are:
- Huggies – $3.00 cash back on Huggies diapers and $2.00 cash back on Huggies wipes, any variety
“Snap is the latest way that we’re helping people discover new brands and save money on the things they buy every day,” said Snap VP and GM Sean Smyth. “We’re using the power of smartphones to make couponing easier and more convenient while paying people to shop.”

In addition to the cash back feature, you can build your own shopping lists within the app, and add featured items along the way.

As an added bonus, Groupon is giving users $1 cash back for every user they refer who opens an account and redeems an item. Also, anyone who downloads the app, and uses it to submit a grocery receipt through November 11th can enter a sweepstakes to win a year of free groceries for an entire family at a value of 13,000.

Image via YouTube
October 2, 2014

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

The financial results of Ticket Monster, including the gain on disposition and related tax effects, are presented as discontinued operations in the accompanying condensed consolidated financial statements and tables for the three months and year endedDecember 31, 2015. Additionally, the assets and liabilities of Ticket Monster are presented as held for sale in the accompanying condensed consolidated balance sheet as of December 31, 2014. All prior period financial information and operational metrics have been retrospectively adjusted to reflect this presentation.


	Three Months Ended															Year Ended
	December 31,															December 31,
													Y/Y % Growth															Y/Y % Growth
										FX Effect			excluding												FX Effect			excluding
		2015			2014		Y/Y % Growth			⁽²⁾			FX ⁽²⁾				2015			2014		Y/Y % Growth			⁽²⁾			FX ⁽²⁾
Gross Billings⁽¹⁾:
North America	$	1,050,361		$	948,579		10.7		%	$	(1,511	)	10.9		%	$	3,709,797		$	3,303,479		12.3		%	$	(5,415	)	12.5		%
EMEA		487,147			560,541		(13.1	)			(61,482	)	(2.1	)			1,794,354			2,046,807		(12.3	)			(317,640	)	3.2
Rest of World		169,484			215,549		(21.4	)			(31,574	)	(6.7	)			751,389			887,546		(15.3	)			(132,679	)	(0.4	)
Consolidated gross billings	$	1,706,992		$	1,724,669		(1.0	)	%	$	(94,567	)	4.5		%	$	6,255,540		$	6,237,832		0.3		%	$	(455,734	)	7.6		%

Revenue:
North America	$	622,647		$	550,974		13.0		%	$	(408	)	13.1		%	$	2,047,742		$	1,824,461		12.2		%	$	(1,351	)	12.3		%
EMEA		248,326			272,475		(8.9	)			(33,198	)	3.3				867,880			961,130		(9.7	)			(157,892	)	6.7
Rest of World		46,197			59,779		(22.7	)			(8,785	)	(8.0	)			203,894			256,532		(20.5	)			(36,932	)	(6.1	)
Consolidated revenue	$	917,170		$	883,228		3.8		%	$	(42,391	)	8.6		%	$	3,119,516		$	3,042,123		2.5		%	$	(196,175	)	9.0		%

Income (loss) from operations	$	(5,423	)	$	33,640		(116.1	)	%	$	(2,742	)	(108.0	)	%	$	(79,777	)	$	30,701		(359.9	)	%	$	(2,064	)	(353.1	)	%

Income (loss) from continuing operations		(32,552	)		26,566												(89,171	)		(18,473	)

Income (loss) from discontinued operations, net of tax ⁽³⁾		(10,613	)		(15,182	)											122,850			(45,446	)

Net income (loss) attributable toGroupon, Inc.	$	(46,528	)	$	8,788											$	20,668		$	(73,090	)

Basic net income (loss) per share:
Continuing operations	$	(0.06	)	$	0.04											$	(0.16	)	$	(0.04	)
Discontinued operations		(0.02	)		(0.03	)											0.19			(0.07	)
Basic net income (loss) per share	$	(0.08	)	$	0.01											$	0.03		$	(0.11	)

Diluted net income (loss) per share:
Continuing operations	$	(0.06	)	$	0.04											$	(0.16	)	$	(0.04	)
Discontinued operations		(0.02	)		(0.03	)											0.19			(0.07	)
Diluted net income (loss) per share	$	(0.08	)	$	0.01											$	0.03		$	(0.11	)

Weighted average number of shares outstanding
Basic		607,517,010			671,885,967												650,106,225			674,832,393
Diluted		607,517,010			681,543,847												650,106,225			674,832,393

⁽¹⁾		Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.

⁽²⁾		Represents the change in financial measures that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three months and year ended December 31, 2014.

⁽³⁾		The $10.6 million loss presented within income (loss) from discontinued operations, net of tax, for the three months endedDecember 31, 2015 represents additional income tax expense attributed to discontinued operations, which resulted from the valuation allowance that was recognized during the period against the Company’s net deferred tax assets in the United States.


Groupon, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

	Three Months Ended December 31,						Year Ended December 31,
	2015			2014			2015			2014
Operating activities
Net income (loss)	$	(43,165	)	$	11,384		$	33,679		$	(63,919	)
Less: Income (loss) from discontinued operations, net of tax		(10,613	)		(15,182	)		122,850			(45,446	)
Income (loss) from continuing operations		(32,552	)		26,566			(89,171	)		(18,473	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property, equipment and software		28,807			25,414			113,048			94,145
Amortization of acquired intangible assets		4,956			4,708			19,922			20,896
Stock-based compensation		32,865			29,961			142,069			115,290
Restructuring-related long-lived asset impairments		6,922			—			7,267			—
Gain on disposition of business		—			—			(13,710	)		—
Deferred income taxes		6,267			(9,168	)		(8,985	)		(11,124	)
Excess tax benefits on stock-based compensation		(1,431	)		(3,407	)		(7,629	)		(15,980	)
Loss on equity method investments		—			—			—			459
Gain (loss) from changes in fair value of contingent consideration		508			(1,385	)		240			(2,444	)
Loss from changes in fair value of investments		829			—			2,943			—
Impairments of investments		—			—			—			2,036
Change in assets and liabilities, net of acquisitions:
Restricted cash		75			(491	)		4,630			7,195
Accounts receivable		6,960			10,280			13,313			(16,277	)
Prepaid expenses and other current assets		61,358			36,816			21,545			13,933
Accounts payable		9,545			(1,073	)		8,601			(14,046	)
Accrued merchant and supplier payables		142,069			155,991			40,217			54,921
Accrued expenses and other current liabilities		(1,174	)		11,117			56,040			(9,986	)
Other, net		(16,980	)		(12,057	)		(18,222	)		31,952
Net cash provided by (used in) operating activities from continuing operations		249,024			273,272			292,118			252,497
Net cash provided by (used in) operating activities from discontinued operations		(670	)		13,550			(37,248	)		36,327
Net cash provided by (used in) operating activities		248,354			286,822			254,870			288,824

Net cash provided by (used in) investing activities from continuing operations		(31,238	)		(35,175	)		(177,250	)		(152,818	)
Net cash provided by (used in) investing activities from discontinued operations		—			(714	)		244,470			(76,638	)
Net cash provided by (used in) investing activities		(31,238	)		(35,889	)		67,220			(229,456	)

Net cash provided by (used in) financing activities		(322,166	)		(21,088	)		(508,156	)		(194,156	)

Effect of exchange rate changes on cash and cash equivalents, including cash classified within current assets held for sale		(5,147	)		(13,100	)		(32,485	)		(33,771	)
Net increase (decrease) in cash and cash equivalents, including cash classified within current assets held for sale		(110,197	)		216,745			(218,551	)		(168,559	)
Less: Net increase (decrease) in cash classified within current assets held for sale		—			11,955			(55,279	)		55,279
Net increase (decrease) in cash and cash equivalents		(110,197	)		204,790			(163,272	)		(223,838	)
Cash and cash equivalents, beginning of period		963,559			811,844			1,016,634			1,240,472
Cash and cash equivalents, end of period	$	853,362		$	1,016,634		$	853,362		$	1,016,634


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

	Three Months EndedDecember 31,						Year Ended December 31,
	2015			2014			2015			2014
Revenue:
Third party and other	$	345,260		$	367,902		$	1,372,533		$	1,501,011
Direct		571,910			515,326			1,746,983			1,541,112
Total revenue		917,170			883,228			3,119,516			3,042,123
Cost of revenue:
Third party and other		43,640			49,725			188,932			203,058
Direct		501,790			455,394			1,545,519			1,373,756
Total cost of revenue		545,430			505,119			1,734,451			1,576,814
Gross profit		371,740			378,109			1,385,065			1,465,309
Operating expenses:
Marketing		83,208			59,812			254,335			241,954
Selling, general and administrative		287,976			285,466			1,192,792			1,191,385
Restructuring charges		5,422			—			29,568			—
Gain on disposition of business		—			—			(13,710	)		—
Acquisition-related expense (benefit), net		557			(809	)		1,857			1,269
Total operating expenses		377,163			344,469			1,464,842			1,434,608
Income (loss) from operations		(5,423	)		33,640			(79,777	)		30,701
Other income (expense), net ⁽¹⁾		(3,393	)		(11,531	)		(28,539	)		(33,450	)
Income (loss) from continuing operations before provision (benefit) for income taxes		(8,816	)		22,109			(108,316	)		(2,749	)
Provision (benefit) for income taxes		23,736			(4,457	)		(19,145	)		15,724
Income (loss) from continuing operations		(32,552	)		26,566			(89,171	)		(18,473	)
Income (loss) from discontinued operations, net of tax		(10,613	)		(15,182	)		122,850			(45,446	)
Net income (loss)		(43,165	)		11,384			33,679			(63,919	)
Net income (loss) attributable to noncontrolling interests		(3,363	)		(2,596	)		(13,011	)		(9,171	)
Net income (loss) attributable to Groupon, Inc.	$	(46,528	)	$	8,788		$	20,668		$	(73,090	)

Basic net income (loss) per share:
Continuing operations	$	(0.06	)	$	0.04		$	(0.16	)	$	(0.04	)
Discontinued operations		(0.02	)		(0.03	)		0.19			(0.07	)
Basic net income (loss) per share	$	(0.08	)	$	0.01		$	0.03		$	(0.11	)

Diluted net income (loss) per share:
Continuing operations	$	(0.06	)	$	0.04		$	(0.16	)	$	(0.04	)
Discontinued operations		(0.02	)		(0.03	)		0.19			(0.07	)
Diluted net income (loss) per share	$	(0.08	)	$	0.01		$	0.03		$	(0.11	)

Weighted average number of shares outstanding
Basic		607,517,010			671,885,967			650,106,225			674,832,393
Diluted		607,517,010			681,543,847			650,106,225			674,832,393

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

	December 31,
	2015			2014
Assets
Current assets:
Cash and cash equivalents	$	853,362		$	1,016,634
Accounts receivable, net		68,175			90,597
Prepaid expenses and other current assets		153,705			192,382
Current assets held for sale		—			85,445
Total current assets		1,075,242			1,385,058
Property, equipment and software, net		198,897			176,004
Goodwill		287,332			236,756
Intangible assets, net		36,483			30,609
Investments (including $163.7 million and $7.4 million at December 31, 2015 and December 31, 2014, respectively, at fair value)		178,236			24,298
Deferred income taxes		3,454			57,594
Other non-current assets		16,620			16,173
Non-current assets held for sale		—			301,105
Total Assets	$	1,796,264		$	2,227,597
Liabilities and Equity
Current liabilities:
Accounts payable	$	24,590		$	13,822
Accrued merchant and supplier payables		776,211			772,156
Accrued expenses and other current liabilities		402,724			341,381
Current liabilities held for sale		—			166,239
Total current liabilities		1,203,525			1,293,598
Deferred income taxes		8,612			32,771
Other non-current liabilities		113,540			129,531
Non-current liabilities held for sale		—			6,753
Total Liabilities		1,325,677			1,462,653
Commitments and contingencies (see Note 10)
Stockholders’ Equity
Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized, 717,387,446 shares issued and 588,919,281 shares outstanding at December 31, 2015 and 699,008,084 shares issued and 671,768,980 shares outstanding at December 31, 2014		72			70
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, 2015 and December 31, 2014		—			—
Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized, no shares issued and outstanding at December 31, 2015 and December 31, 2014		—			—
Additional paid-in capital		1,964,453			1,847,420
Treasury stock, at cost, 128,468,165 shares at December 31, 2015 and 27,239,104 shares atDecember 31, 2014		(645,041	)		(198,467	)
Accumulated deficit		(901,292	)		(921,960	)
Accumulated other comprehensive income (loss)		51,206			35,763
Total Groupon, Inc. Stockholders’ Equity		469,398			762,826
Noncontrolling interests		1,189			2,118
Total Equity		470,587			764,944
Total Liabilities and Equity	$	1,796,264		$	2,227,597


Groupon, Inc.
Segment Information
(in thousands)
(unaudited)

	Three Months Ended December 31,						Year Ended December 31,
	2015			2014			2015			2014
North America
Gross billings ⁽¹⁾	$	1,050,361		$	948,579		$	3,709,797		$	3,303,479
Revenue		622,647			550,974			2,047,742			1,824,461
Segment cost of revenue and operating expenses ^(2)(3)(4)		625,171			520,140			2,029,643			1,755,113
Segment operating income (loss) ⁽²⁾	$	(2,524	)	$	30,834		$	18,099		$	69,348
Segment operating income (loss) as a percent of segment gross billings		(0.2	)%		3.3	%		0.5	%		2.1	%
Segment operating income (loss) as a percent of segment revenue		(0.4	)%		5.6	%		0.9	%		3.8	%

EMEA
Gross billings ⁽¹⁾	$	487,147		$	560,541		$	1,794,354		$	2,046,807
Revenue		248,326			272,475			867,880			961,130
Segment cost of revenue and operating expenses ^(2)(4)(5)		211,443			237,468			797,786			857,062
Segment operating income ⁽²⁾	$	36,883		$	35,007		$	70,094		$	104,068
Segment operating income as a percent of segment gross billings		7.6	%		6.2	%		3.9	%		5.1	%
Segment operating income as a percent of segment revenue		14.9	%		12.8	%		8.1	%		10.8	%

Rest of World
Gross billings ⁽¹⁾	$	169,484		$	215,549		$	751,389		$	887,546
Revenue		46,197			59,779			203,894			256,532
Segment cost of revenue and operating expenses ⁽²⁾⁽⁴⁾		52,731			62,828			228,273			282,688
Segment operating loss ⁽²⁾	$	(6,534	)	$	(3,049	)	$	(24,379	)	$	(26,156	)
Segment operating loss as a percent of segment gross billings		(3.9	)%		(1.4	)%		(3.2	)%		(2.9	)%
Segment operating loss as a percent of segment revenue		(14.1	)%		(5.1	)%		(12.0	)%		(10.2	)%

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

Adjusted EBITDA, non-GAAP earnings attributable to common stockholders and non-GAAP earnings per share are non-GAAP financial measures. The Company reconciles Adjusted EBITDA to the most comparable U.S. GAAP financial measure, “Net income (loss) from continuing operations” for the periods presented and the Company reconciles non-GAAP earnings per share to the most comparable U.S. GAAP financial measure, “Diluted net income (loss) per share,” for the periods presented.

The following is a quarterly reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, “Income (loss) from continuing operations.”


	Q4 2014	Q1 2015	Q2 2015	Q3 2015	Q4 2015
Income (loss) from continuing operations	$ 26,566	$ (16,739)	$ (15,267)	$ (24,613)	$ (32,552)
Adjustments:
Stock-based compensation ⁽¹⁾	29,961	35,144	38,467	35,432	32,691
Depreciation and amortization	30,122	32,200	31,372	35,635	33,763
Acquisition-related expense (benefit), net	(809)	(269)	505	1,064	557
Restructuring charges	—	—	—	24,146	5,422
Gain on disposition of business	—	—	—	(13,710)	—
Prepaid marketing write-off	—	—	—	6,690	—
Securities litigation expense	—	—	—	37,500	—
Non-operating expense (income), net	11,531	19,927	(2,941)	8,160	3,393
Provision (benefit) for income taxes	(4,457)	2,107	8,982	(53,970)	23,736
Total adjustments	66,348	89,109	76,385	80,947	99,562
Adjusted EBITDA	$ 92,914	$ 72,370	$ 61,118	$ 56,334	$ 67,010

⁽¹⁾		Includes stock-based compensation recorded within cost of revenue, marketing expense, and selling, general and administrative expense. Non-operating expense (income), net, includes $0.02 million, $0.1 million and $0.2 million of additional stock-based compensation for the three months ended June 30, 2015, three months ended September 30, 2015and three months ended December 31, 2015, respectively.

		The following is a reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, “Net income (loss) from continuing operations” for the years ended December 31, 2015 and 2014:

⁽¹⁾		Includes stock-based compensation recorded within cost of revenue, marketing expense, and selling, general and administrative expense. Non-operating expense (income), net, includes $0.3 million of additional stock-based compensation for the year ended December 31, 2015.

		The following is a reconciliation of net income (loss) attributable to common stockholders to non-GAAP net income (loss) attributable to common stockholders and a reconciliation of diluted net income (loss) per share to non-GAAP net income (loss) per share for the three months and year ended December 31, 2015:

	Three Months Ended			Year Ended
	December 31, 2015			December 31, 2015
Net income (loss) attributable to common stockholders	$	(46,528	)	$	20,668
Stock-based compensation		32,865			142,069
Amortization of acquired intangible assets		4,956			19,922
Acquisition-related expense (benefit), net		557			1,857
Restructuring charges		5,422			29,568
Gain on disposition of business		—			(13,710	)
Prepaid marketing write-off		—			6,690
Securities litigation expense		—			37,500
Intercompany foreign currency losses (gains) and reclassifications of translation adjustments to earnings⁽¹⁾		(400	)		20,266
Loss from changes in fair value of investments		829			2,943
Income tax effect of above adjustments		14,979			(53,953	)
Loss (income) from discontinued operations, net of tax		10,613			(122,850	)
Non-GAAP net income (loss) attributable to common stockholders	$	23,293		$	90,970

Diluted shares		607,517,010			650,106,225
Incremental diluted shares		6,367,291			6,854,909
Adjusted diluted shares		613,884,301			656,961,134

Diluted net income (loss) per share ⁽²⁾	$	(0.08	)	$	0.03
Impact of stock-based compensation, amortization of acquired intangible assets, acquisition-related expense (benefit), net, intercompany foreign currency losses (gains), items that are unusual in nature and infrequently occurring, income (loss) from discontinued operations and related tax effects		0.12			0.11
Non-GAAP net income (loss) per share	$	0.04		$	0.14

⁽¹⁾		For the three months and year ended December 31, 2015, a $3.7 million net cumulative translation adjustment gain was reclassified to earnings as a result of the Company’s exit from certain countries as part of its restructuring plan. For the year ended December 31, 2015, a $4.4 million loss related to the cumulative translation adjustment from the Company’s legacy business in the Republic of Korea was reclassified to earnings as a result of the Ticket Monster disposition.

⁽²⁾		The sum of per share amounts for quarterly periods may not equal year-to-date amounts due to rounding.

		Foreign exchange rate neutral operating results are non-GAAP financial measures. The Company reconciles foreign exchange rate neutral operating results to the most comparable U.S. GAAP financial measures, “Gross billings,” “Revenue” and “Income (loss) from continuing operations,” respectively, for the periods presented. The Company reconciles “foreign exchange rate neutral Gross billings growth” and “foreign exchange rate neutral Revenue growth” to year-over-year growth rates for the most comparable U.S. GAAP financial measures, “Gross billings growth” and “Revenue growth,” respectively, for the periods presented.

		The effect on the Company’s gross billings, revenue and income (loss) from changes in exchange rates versus the U.S. Dollar for the three months ended December 31, 2015 was as follows:

	Three Months Ended December 31, 2015									Three Months Ended December 31, 2015
	At Avg. Q4 2014			Exchange Rate			As			At Avg. Q3 2015			Exchange Rate			As
	Rates ⁽¹⁾			Effect ⁽²⁾			Reported			Rates ⁽³⁾			Effect ⁽²⁾			Reported
Gross billings	$	1,801,559		$	(94,567	)	$	1,706,992		$	1,721,580		$	(14,588	)	$	1,706,992
Revenue		959,561			(42,391	)		917,170			923,903			(6,733	)		917,170
Income (loss) from operations	$	(2,681	)	$	(2,742	)	$	(5,423	)	$	(4,620	)	$	(803	)	$	(5,423	)

	Year Ended December 31, 2015									Year Ended December 31, 2015
	At Avg. Q4									At Avg. Q4’14-
	2014 YTD			Exchange Rate			As			Q3’15			Exchange Rate			As
	Rates ⁽¹⁾			Effect ⁽²⁾			Reported			Rates ⁽³⁾			Effect ⁽²⁾			Reported
Gross billings	$	6,711,274		$	(455,734	)	$	6,255,540		$	6,346,012		$	(90,472	)	$	6,255,540
Revenue		3,315,691			(196,175	)		3,119,516			3,158,228			(38,712	)		3,119,516
Income (loss) from operations	$	(77,713	)	$	(2,064	)	$	(79,777	)	$	(78,679	)	$	(1,098	)	$	(79,777	)

⁽¹⁾		Represents the financial statement balances that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three months and year ended December 31, 2014.

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

⁽³⁾		Represents the financial statement balances that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three and twelve months ended September 30, 2015.

			Exchange
	At Avg. Q4		Rate			December 31, 2015		December 31, 2014		Y/Y %		Y/Y% Growth
	2014 Rates ⁽¹⁾		Effect ⁽²⁾			As Reported		As Reported		Growth		excluding FX
Local:
Third party and other	$	532,015	$	(861	)	$	531,154	$	499,250	6.4	%	6.6	%

Travel:
Third party		89,589		(200	)		89,389		80,296	11.3	%	11.6	%
Total services		621,604		(1,061	)		620,543		579,546	7.1	%	7.3	%

Goods:
Third party		13,401		(450	)		12,951		8,277	56.5	%	61.9	%
Direct		416,867		—			416,867		360,756	15.6		15.6
Total		430,268		(450	)		429,818		369,033	16.5	%	16.6

Total gross billings	$	1,051,872	$	(1,511	)	$	1,050,361	$	948,579	10.7	%	10.9	%

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

		Q4 2014				Q1 2015				Q2 2015				Q3 2015				Q4 2015
Segments
North America Segment:
Gross Billings ⁽¹⁾:
	Local ⁽²⁾Gross Billings	$	499,250			$	512,558			$	499,378			$	481,608			$	531,154
	Travel Gross Billings		80,296				96,678				102,908				101,801				89,389
	Gross Billings – Services		579,546				609,236				602,286				583,409				620,543
	Gross Billings – Goods		369,033				284,741				293,970				285,794				429,818
	Total Gross Billings	$	948,579			$	893,977			$	896,256			$	869,203			$	1,050,361
	Year-over-year growth		20		%		14		%		12		%		12		%		11		%
	% Third Party and Other		62		%		69		%		68		%		68		%		60		%
	% Direct		38		%		31		%		32		%		32		%		40		%
Gross Billings Trailing Twelve Months (TTM)		$	3,303,479			$	3,415,687			$	3,513,098			$	3,608,015			$	3,709,797

Revenue ⁽³⁾:
	Local Revenue	$	170,946			$	180,864			$	172,461			$	163,786			$	184,201
	Travel Revenue		17,165				19,989				21,958				21,394				18,390
	Revenue – Services		188,111				200,853				194,419				185,180				202,591
	Revenue – Goods		362,863				279,029				286,863				278,751				420,056
	Total Revenue	$	550,974			$	479,882			$	481,282			$	463,931			$	622,647
	Year-over-year growth		24		%		11		%		14		%		11		%		13		%
	% Third Party and Other		35		%		42		%		41		%		40		%		33		%
	% Direct		65		%		58		%		59		%		60		%		67		%
Revenue TTM		$	1,824,461			$	1,873,281			$	1,930,632			$	1,976,069			$	2,047,742

Gross Profit ⁽⁴⁾:
	Local Gross Profit	$	147,582			$	154,776			$	147,574			$	138,798			$	159,745
	% of North America Local Gross Billings		29.6		%		30.2		%		29.6		%		28.8		%		30.1		%
	Travel Gross Profit		14,187				15,791				18,385				17,644				15,207
	% of North America Travel Gross Billings		17.7		%		16.3		%		17.9		%		17.3		%		17.0		%
	Gross Profit – Services		161,769				170,567				165,959				156,442				174,952
	% of North America Services Gross Billings		27.9		%		28.0		%		27.6		%		26.8		%		28.2		%
	Gross Profit – Goods		34,404				23,923				30,598				34,801				44,329
	% of North America Goods Gross Billings		9.3		%		8.4		%		10.4		%		12.2		%		10.3		%
	Total Gross Profit	$	196,173			$	194,490			$	196,557			$	191,243			$	219,281
	Year-over-year growth		13		%		8		%		9		%		9		%		12		%
	% Third Party and Other		83		%		88		%		85		%		83		%		81		%
	% Direct		17		%		12		%		15		%		17		%		19		%
	% of North America Total Gross Billings		20.7		%		21.8		%		21.9		%		22.0		%		20.9		%

EMEA Segment:
Gross Billings:
	Local Gross Billings	$	242,119			$	217,598			$	198,553			$	182,540			$	197,445
	Travel Gross Billings		72,710				65,065				59,544				64,916				59,836
	Gross Billings – Services		314,829				282,663				258,097				247,456				257,281
	Gross Billings – Goods		245,712				176,526				175,439				167,026				229,866
	Total Gross Billings	$	560,541			$	459,189			$	433,536			$	414,482			$	487,147
	Year-over-year growth		(1	)	%		(11	)	%		(10	)	%		(15	)	%		(13	)	%
	Year-over-year growth, excluding FX ⁽⁵⁾		8		%		7		%		9		%		(1	)	%		(2	)	%
	% Third Party and Other		74		%		77		%		76		%		75		%		70		%
	% Direct		26		%		23		%		24		%		25		%		30		%
Gross Billings TTM		$	2,046,807			$	1,992,408			$	1,942,689			$	1,867,748			$	1,794,354

Revenue:
	Local Revenue	$	95,572			$	82,536			$	75,543			$	70,781			$	73,225
	Travel Revenue		16,321				14,717				13,100				13,561				11,681
	Revenue – Services		111,893				97,253				88,643				84,342				84,906
	Revenue – Goods		160,582				118,967				115,404				114,945				163,420
	Total Revenue	$	272,475			$	216,220			$	204,047			$	199,287			$	248,326
	Year-over-year growth		8		%		(6	)	%		(10	)	%		(13	)	%		9		%
	Year-over-year growth, excluding FX		18		%		13		%		9		%		2		%		3		%
	% Third Party and Other		46		%		51		%		48		%		48		%		41		%
	% Direct		54		%		49		%		52		%		52		%		59		%
Revenue TTM		$	961,130			$	946,457			$	922,814			$	892,029			$	867,880

Gross Profit:
	Local Gross Profit	$	90,150			$	77,356			$	70,270			$	66,288			$	68,966
	% of EMEA Local Gross Billings		37.2		%		35.5		%		35.4		%		36.3		%		34.9		%
	Travel Gross Profit		15,226				12,400				11,939				12,323				10,732
	% of EMEA Travel Gross Billings		20.9		%		19.1		%		20.1		%		19.0		%		17.9		%
	Gross Profit – Services		105,376				89,756				82,209				78,611				79,698
	% of EMEA Services Gross Billings		33.5		%		31.8		%		31.9		%		31.8		%		31.0		%
	Gross Profit – Goods		38,154				25,481				21,878				24,905				43,026
	% of EMEA Goods Gross Billings		15.5		%		14.4		%		12.5		%		14.9		%		18.7		%
	Total Gross Profit	$	143,530			$	115,237			$	104,087			$	103,516			$	122,724
	Year-over-year growth		(6	)	%		(18	)	%		(26	)	%		(21	)	%		(14	)	%
	% Third Party and Other		82		%		87		%		86		%		86		%		77		%
	% Direct		18		%		13		%		14		%		14		%		23		%
	% of EMEA Total Gross Billings		25.6		%		25.1		%		24.0		%		25.0		%		25.2		%

Rest of World Segment:
Gross Billings:
	Local Gross Billings	$	105,420			$	99,735			$	100,403			$	92,972			$	83,430
	Travel Gross Billings		32,313				32,946				31,263				30,709				25,369
	Gross Billings – Services		137,733				132,681				131,666				123,681				108,799
	Gross Billings – Goods		77,816				66,154				67,555				60,168				60,685
	Total Gross Billings	$	215,549			$	198,835			$	199,221			$	183,849			$	169,484
	Year-over-year growth		(10	)	%		(12	)	%		(9	)	%		(19	)	%		(21	)	%
	Year-over-year growth, excluding FX		—		%		(1	)	%		6		%		—		%		(7	)	%
	% Third Party and Other		96		%		98		%		97		%		96		%		95		%
	% Direct		4		%		2		%		3		%		4		%		5		%
Gross Billings TTM		$	887,546			$	861,032			$	840,243			$	797,454			$	751,389

Revenue:
	Local Revenue	$	32,264			$	30,281			$	28,499			$	26,372			$	22,229
	Travel Revenue		5,757				6,495				6,363				6,135				5,098
	Revenue – Services		38,021				36,776				34,862				32,507				27,327
	Revenue – Goods		21,758				17,478				18,204				17,870				18,870
	Total Revenue	$	59,779			$	54,254			$	53,066			$	50,377			$	46,197
	Year-over-year growth		(19	)	%		(18	)	%		(18	)	%		(23	)	%		(23	)	%
	Year-over-year growth, excluding FX		(9	)	%		(8	)	%		(4	)	%		(5	)	%		(8	)	%
	% Third Party and Other		86		%		91		%		87		%		86		%		82		%
	% Direct		14		%		9		%		13		%		14		%		18		%
Revenue TTM		$	256,532			$	244,326			$	232,802			$	217,476			$	203,894

Gross Profit:
	Local Gross Profit	$	27,175			$	26,161			$	24,567			$	22,568			$	18,889
	% of Rest of World Local Gross Billings		25.8		%		26.2		%		24.5		%		24.3		%		22.6		%
	Travel Gross Profit		3,815				4,906				5,012				4,859				4,040
	% of Rest of World Travel Gross Billings		11.8		%		14.9		%		16.0		%		15.8		%		15.9		%
	Gross Profit – Services		30,990				31,067				29,579				27,427				22,929
	% of Rest of World Services Gross Billings		22.5		%		23.4		%		22.5		%		22.2		%		21.1		%
	Gross Profit – Goods		7,416				6,612				6,784				6,726				6,806
	% of Rest of World Goods Gross Billings		9.5		%		10.0		%		10.0		%		11.2		%		11.2		%
	Total Gross Profit	$	38,406			$	37,679			$	36,363			$	34,153			$	29,735
	Year-over-year growth		(24	)	%		(16	)	%		(20	)	%		(28	)	%		(23	)	%
	% Third Party and Other		96		%		99		%		99		%		99		%		99		%
	% Direct		4		%		1		%		1		%		1		%		1		%
	% of Rest of World Total Gross Billings		17.8		%		18.9		%		18.3		%		18.6		%		17.5		%

Consolidated Results of Operations:
Gross Billings:
	Local Gross Billings	$	846,789			$	829,891			$	798,334			$	757,120			$	812,029
	Travel Gross Billings		185,319				194,689				193,715				197,426				174,594
	Gross Billings – Services		1,032,108				1,024,580				992,049				954,546				986,623
	Gross Billings – Goods		692,561				527,421				536,964				512,988				720,369
	Total Gross Billings	$	1,724,669			$	1,552,001			$	1,529,013			$	1,467,534			$	1,706,992
	Year-over-year growth		8		%		2		%		2		%		(2	)	%		(1	)	%
	Year-over-year growth, excluding FX		13		%		10		%		10		%		6		%		4		%
	% Third Party and Other		70		%		75		%		74		%		74		%		66		%
	% Direct		30		%		25		%		26		%		26		%		34		%
Gross Billings TTM		$	6,237,832			$	6,269,127			$	6,296,030			$	6,273,217			$	6,255,540
	Year-over-year growth		8		%		7		%		6		%		3		%		—		%

Revenue:
	Local Revenue	$	298,782			$	293,681			$	276,503			$	260,939			$	279,655
	Travel Revenue		39,243				41,201				41,421				41,090				35,169
	Revenue – Services		338,025				334,882				317,924				302,029				314,824
	Revenue – Goods		545,203				415,474				420,471				411,566				602,346
Total Revenue		$	883,228			$	750,356			$	738,395			$	713,595			$	917,170
	Year-over-year growth		15		%		3		%		3		%		—		%		4		%
	Year-over-year growth, excluding FX		19		%		10		%		11		%		7		%		9		%
	% Third Party and Other		42		%		48		%		46		%		46		%		38		%
	% Direct		58		%		52		%		54		%		54		%		62		%
Revenue TTM		$	3,042,123			$	3,064,064			$	3,086,248			$	3,085,574			$	3,119,516
	Year-over-year growth		18		%		13		%		10		%		5		%		3		%

Gross Profit:
	Local Gross Profit	$	264,907			$	258,293			$	242,411			$	227,654			$	247,600
	% of Consolidated Local Gross Billings		31.3		%		31.1		%		30.4		%		30.1		%		30.5		%
	Travel Gross Profit		33,228				33,097				35,336				34,826				29,979
	% of Consolidated Travel Gross Billings		17.9		%		17.0		%		18.2		%		17.6		%		17.2		%
	Gross Profit – Services		298,135				291,390				277,747				262,480				277,579
	% of Consolidated Services Gross Billings		28.9		%		28.4		%		28.0		%		27.5		%		28.1		%
	Gross Profit – Goods		79,974				56,016				59,260				66,432				94,161
	% of Consolidated Goods Gross Billings		11.5		%		10.6		%		11.0		%		13.0		%		13.1		%
	Total Gross Profit	$	378,109			$	347,406			$	337,007			$	328,912			$	371,740
	Year-over-year growth		—		%		(5	)	%		(8	)	%		(7	)	%		(2	)	%
	% Third Party and Other		84		%		89		%		87		%		85		%		81		%
	% Direct		16		%		11		%		13		%		15		%		19		%
	% of Total Consolidated Gross Billings		21.9		%		22.4		%		22.0		%		22.4		%		21.8		%

Marketing		$	59,812			$	52,533			$	57,007			$	61,587			$	83,208
Selling, general and administrative		$	285,466			$	289,847			$	288,721			$	326,248			$	287,976
Adjusted EBITDA		$	92,914			$	72,370			$	61,118			$	56,334			$	67,010
	% of Total Consolidated Gross Billings		5.4		%		4.7		%		4.0		%		3.8		%		3.9		%
	% of Total Consolidated Revenue		10.5		%		9.6		%		8.3		%		7.9		%		7.3		%

Global headcount as of December 31, 2015 and 2014 was as follows:

		Q4 2014	Q4 2015
	Sales ⁽⁸⁾	4,493	3,992
	% North America	31 %	34 %
	% EMEA	42 %	41 %
	% Rest of World	27 %	25 %
	Other	6,256	5,880
	Total Headcount	10,749	9,872

(1)		Includes stock-based compensation classified within cost of revenue, marketing expense, and selling, general and administrative expense. Other expense (income), net, includes $0.02 million and $0.1 million of additional stock-based compensation for the three months endedJune 30, 2015 and the three months ended September 30, 2015, respectively.

		The following is a reconciliation of net income (loss) attributable to common stockholders to non-GAAP net income (loss) attributable to common stockholders and a reconciliation of diluted net income (loss) per share to non-GAAP net income (loss) per share for the three and nine months ended September 30, 2015:

Tag: Groupon

Groupon Announces a Business Model Transformation

Still a Huge Opportunity in Local

	Three Months Ended September 30, 2015			Nine Months Ended September 30, 2015
Net income (loss) attributable to common stockholders	$	(27,615	)	$	67,196
Stock-based compensation		35,575			109,204
Amortization of acquired intangible assets		5,160			14,966
Acquisition-related expense (benefit), net		1,064			1,300
Restructuring charges		24,146			24,146
Gain on disposition of business		(13,710	)		(13,710	)
Prepaid marketing write-off		6,690			6,690
Securities litigation expense		37,500			37,500
Intercompany foreign losses (gains) and reclassfication of translation adjustment to earnings ⁽¹⁾		4,708			20,666
Loss from changes in fair value of investments		2,564			2,114
Income tax effect of above adjustments		(43,541	)		(68,932	)
Income from discontinued operations, net of tax		—			(133,463	)
Non-GAAP net income (loss) attributable to common stockholders	$	32,541		$	67,677

Diluted shares		644,894,785			644,302,630
Incremental diluted shares		5,385,857			7,017,448
Adjusted diluted shares		650,280,642			651,320,078

Diluted net income (loss) per share	$	(0.04	)	$	0.10
Impact of stock-based compensation, amortization of acquired intangible assets, acquisition-related expense (benefit), net, intercompany foreign currency losses (gains), items that are unusual in nature and infrequently occurring, income (loss) from discontinued operations and related tax effects		0.09			—
Non-GAAP net income (loss) per share	$	0.05		$	0.10

(1)	For the nine months ended September 30, 2015, a $4.4 million loss related to the cumulative translation adjustment from the Company’s legacy business in the Republic of Korea was reclassified to earnings as a result of the Ticket Monster disposition.

	Foreign exchange rate neutral operating results are non-GAAP financial measures. The Company reconciles foreign exchange rate neutral operating results to the most comparable U.S. GAAP financial measures, “Gross billings,” “Revenue” and “Income (loss) from continuing operations,” respectively, for the periods presented. The Company reconciles “foreign exchange rate neutral Gross billings growth” and “foreign exchange rate neutral Revenue growth” to year-over-year growth rates for the most comparable U.S. GAAP financial measures, “Gross billings growth” and “Revenue growth,” respectively, for the periods presented.

The effect on the Company’s gross billings, revenue and income (loss) from changes in exchange rates versus the U.S. Dollar for the three months ended September 30, 2015 was as follows:

	Three Months Ended September 30, 2015									Three Months Ended September 30, 2015
	At Avg. Q3 2014 Rates⁽¹⁾			Exchange Rate Effect⁽²⁾			As Reported			At Avg. Q2 2015 Rates⁽³⁾			Exchange Rate Effect⁽²⁾			As Reported
Gross billings	$	1,584,655		$	(117,121	)	$	1,467,534		$	1,478,528		$	(10,994	)	$	1,467,534
Revenue		761,867			(48,272	)		713,595			716,702			(3,107	)		713,595
Income (loss) from operations	$	(71,056	)	$	633		$	(70,423	)	$	(71,189	)	$	766		$	(70,423	)

The effect on the Company’s gross billings, revenue and income (loss) from operations from changes in exchange rates versus the U.S. Dollar for the nine months ended September 30, 2015 was as follows:

	Nine Months Ended September 30, 2015									Nine Months Ended September 30, 2015
	At Avg. Q3 2014 YTD Rates⁽¹⁾			Exchange Rate Effect⁽²⁾			As Reported			At Avg. Q4’14-Q2’15 Rates⁽³⁾			Exchange Rate Effect⁽²⁾			As Reported
Gross billings	$	4,909,715		$	(361,167	)	$	4,548,548		$	4,624,647		$	(76,099	)	$	4,548,548
Revenue		2,356,130			(153,784	)		2,202,346			2,234,382			(32,036	)		2,202,346
(Loss) income from operations	$	(75,033	)	$	679		$	(74,354	)	$	(74,074	)	$	(280	)	$	(74,354	)

The following is a quarterly reconciliation of foreign exchange rate neutral Gross billings growth from the comparable quarterly periods of the prior year to reported Gross billings growth from the comparable quarterly periods of the prior year.

	Q3 2014			Q4 2014			Q1 2015			Q2 2015			Q3 2015
EMEA Gross billings growth, excluding FX	10		%	8		%	7		%	9		%	(1	)	%
FX Effect	—			(9	)		(18	)		(19	)		(14	)
EMEA Gross billings growth	10		%	(1	)	%	(11	)	%	(10	)	%	(15	)	%

Rest of World Gross billings growth, excluding FX	1		%	—		%	(1	)	%	6		%	—		%
FX Effect	(4	)		(10	)		(11	)		(15	)		(19	)
Rest of World Gross billings growth	(3	)	%	(10	)	%	(12	)	%	(9	)	%	(19	)	%

Consolidated Gross billings growth, excluding FX	12		%	13		%	10		%	10		%	6		%
FX Effect	(1	)		(5	)		(8	)		(8	)		(8	)
Consolidated Gross billings growth	11		%	8		%	2		%	2		%	(2	)	%

The following is a quarterly reconciliation of foreign exchange rate neutral Revenue growth from the comparable quarterly periods of the prior year to reported Revenue growth from the comparable quarterly periods of the prior year.

	Q3 2014			Q4 2014			Q1 2015			Q2 2015			Q3 2015
EMEA Revenue growth, excluding FX	55		%	18		%	13		%	9		%	2		%
FX Effect	1			(10	)		(19	)		(19	)		(15	)
EMEA Revenue growth	56		%	8		%	(6	)	%	(10	)	%	(13	)	%

Rest of World Revenue growth, excluding FX	(20	)	%	(9	)	%	(8	)	%	(4	)	%	(5	)	%
FX Effect	(4	)		(10	)		(10	)		(14	)		(18	)
Rest of World Revenue growth	(24	)	%	(19	)	%	(18	)	%	(18	)	%	(23	)	%

Consolidated Revenue growth, excluding FX	21		%	19		%	10		%	11		%	7		%
FX Effect	(1	)		(4	)		(7	)		(8	)		(7	)
Consolidated Revenue growth	20		%	15		%	3		%	3		%	—		%

The effect on North America’s gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended September 30, 2015 was as follows:

	At Avg. Q3 2014 Rates ⁽¹⁾		Exchange Rate Effect ⁽²⁾			September 30, 2015 As Reported		September 30, 2014 As Reported		Y/Y % Growth			Y/Y% Growth excluding FX
	At Avg. Q3 2014 Rates ⁽¹⁾		Exchange Rate Effect ⁽²⁾			September 30, 2015 As Reported		September 30, 2014 As Reported		Y/Y % Growth			Y/Y% Growth excluding FX
Local:
Third party and other	$	482,498	$	(890	)	$	481,608	$	446,573	7.8		%	8.0		%

Travel:
Third party		102,065		(264	)		101,801		84,820	20.0		%	20.3		%
Total services		584,563		(1,154	)		583,409		531,393	9.8		%	10.0		%

Goods:
Third party		9,181		(495	)		8,686		5,077	71.1		%	80.8		%
Direct		277,108		—			277,108		237,816	16.5			16.5
Total		286,289		(495	)		285,794		242,893	17.7		%	17.9

Travel:
Third party		102,065		(264	)		101,801		84,820	20.0		%	20.3		%

Total gross billings	$	870,852	$	(1,649	)	$	869,203	$	774,286	12.3		%	12.5		%

The effect on EMEA’s gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months endedSeptember 30, 2015 was as follows:

	At Avg. Q3 2014 Rates ⁽¹⁾		Exchange Rate Effect ⁽²⁾			September 30, 2015 As Reported		September 30, 2014 As Reported		Y/Y % Growth			Y/Y% Growth excluding FX
	At Avg. Q3 2014 Rates ⁽¹⁾		Exchange Rate Effect ⁽²⁾			September 30, 2015 As Reported		September 30, 2014 As Reported		Y/Y % Growth			Y/Y% Growth excluding FX
Local:
Third party and other	$	211,548	$	(29,008	)	$	182,540	$	218,615	(16.5	)	%	(3.2	)	%

Travel:
Third party		77,825		(12,909	)		64,916		79,802	(18.7	)	%	(2.5	)	%
Total services		289,373		(41,917	)		247,456		298,417	(17.1	)	%	(3.0	)	%

Goods:
Third party		74,621		(10,703	)		63,918		82,646	(22.7	)	%	(9.7	)	%
Direct		122,833		(19,725	)		103,108		108,360	(4.8	)		13.4
Total		197,454		(30,428	)		167,026		191,006	(12.6	)	%	3.4		%

Travel:
Third party		77,825		(12,909	)		64,916		79,802	(18.7	)	%	(2.5	)	%

Total gross billings	$	486,827	$	(72,345	)	$	414,482	$	489,423	(15.3	)	%	(0.5	)	%

The effect on Rest of World’s gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended September 30, 2015 was as follows:

	At Avg. Q3 2014 Rates ⁽¹⁾		Exchange Rate Effect ⁽²⁾			September 30, 2015 As Reported		September 30, 2014 As Reported		Y/Y % Growth			Y/Y% Growth excluding FX
	At Avg. Q3 2014 Rates ⁽¹⁾		Exchange Rate Effect ⁽²⁾			September 30, 2015 As Reported		September 30, 2014 As Reported		Y/Y % Growth			Y/Y% Growth excluding FX
Local:
Third party and other	$	115,909	$	(22,937	)	$	92,972	$	120,269	(22.7	)	%	(3.6	)	%

Travel:
Third party		38,890		(8,181	)		30,709		35,754	(14.1	)	%	8.8		%
Total services		154,799		(31,118	)		123,681		156,023	(20.7	)	%	(0.8	)	%

Goods:
Third party		63,749		(10,654	)		53,095		65,425	(18.8	)	%	(2.6	)	%
Direct		8,428		(1,355	)		7,073		5,190	36.3			62.4
Total		72,177		(12,009	)		60,168		70,615	(14.8	)	%	2.2		%

Travel:
Third party		38,890		(8,181	)		30,709		35,754	(14.1	)	%	8.8		%

Total gross billings	$	226,976	$	(43,127	)	$	183,849	$	226,638	(18.9	)	%	0.1		%

The effect on consolidated gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months endedSeptember 30, 2015 was as follows:

	At Avg. Q3 2014 Rates ⁽¹⁾		Exchange Rate Effect⁽²⁾			September 30, 2015 As Reported		September 30, 2014 As Reported		Y/Y % Growth			Y/Y% Growth excluding FX
	At Avg. Q3 2014 Rates ⁽¹⁾		Exchange Rate Effect⁽²⁾			September 30, 2015 As Reported		September 30, 2014 As Reported		Y/Y % Growth			Y/Y% Growth excluding FX
Local:
Third party and other	$	809,955	$	(52,835	)	$	757,120	$	785,457	(3.6	)	%	3.1		%

Travel:
Third party		218,780		(21,354	)		197,426		200,376	(1.5	)	%	9.2		%
Total services		1,028,735		(74,189	)		954,546		985,833	(3.2	)	%	4.4		%

Goods:
Third party		147,551		(21,852	)		125,699		153,148	(17.9	)	%	(3.7	)	%
Direct		408,369		(21,080	)		387,289		351,366	10.2			16.2
Total		555,920		(42,932	)		512,988		504,514	1.7		%	10.2		%


Total gross billings	$	1,584,655	$	(117,121	)	$	1,467,534	$	1,490,347	(1.5	)	%	6.3		%

(1)		Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.

(2)		Local represents deals from local merchants, deals with national merchants, and deals through local events. Other revenue transactions include advertising, payment processing, point of sale and commission revenue.

(3)		Includes third party revenue, direct revenue and other revenue. Third party revenue is related to sales for which the Company acts as a marketing agent for the merchant. This revenue is recorded on a net basis. Direct revenue is primarily related to the sale of products for which the Company is the merchant of record. These revenues are accounted for on a gross basis, with the cost of inventory included in cost of revenue. Other revenue primarily consists of advertising revenue, payment processing revenue, point of sale revenue and commission revenue.

(4)		Represents third party revenue, direct revenue and other revenue reduced by cost of revenue.

(5)		Represents the change in financial measures that would have resulted had average exchange rates in the reporting periods been the same as those in effect in the prior year periods.

(6)		Reflects the total number of unique user accounts who have purchased a voucher or product from us during the trailing twelve months.

(7)		Reflects the total gross billings generated in the trailing twelve months per average active customer over that period.

(8)		Includes merchant sales representatives, as well as sales support from continuing operations.

(9)		Financial information and other metrics have been retrospectively adjusted to exclude Ticket Monster, which has been classified as discontinued operations.

(10)		The definition, methodology and appropriateness of each of our supplemental metrics is reviewed periodically. As a result, metrics are subject to removal and/or change.