Attached files
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| 8-K - 8-K - Groupon, Inc. | a2016q38-k.htm |
Exhibit 99.1
Groupon Announces Third Quarter 2016 Results
Added 1.2 million net new customers and achieved double digit billings growth in North America Local
• | Gross billings of $1.43 billion |
• | Revenue of $720.5 million |
• | Net Loss of $35.8 million |
• | Adjusted EBITDA of $32.1 million |
• | GAAP loss per share of $0.07; non-GAAP loss per share of $0.01 |
• | Operating Cash Flow of $78.9 million for the trailing twelve month period; Free Cash Flow of $14.2 million for the trailing twelve month period |
• | Fiscal year 2016 revenue guidance of $3.075 billion to $3.150 billion and 2016 Adjusted EBITDA guidance of $150.0 million to $165.0 million |
• | Agreed to acquire LivingSocial, expect to close by early November 2016 |
CHICAGO - (BUSINESS WIRE) - October 26, 2016 - Groupon, Inc. (NASDAQ: GRPN) today announced financial results for the quarter ended September 30, 2016.
“Our strategy continues to deliver results with double-digit growth in North America local billings and our highest quarter for customer acquisition in over three years,” said Groupon CEO Rich Williams. “We are looking forward to a strong finish to the year and further progress on our mission to make Groupon a daily habit for consumers.”
Third Quarter 2016 Summary
• | Gross Billings were $1.43 billion in the third quarter 2016, down 2% from $1.47 billion in the third quarter 2015. Gross billings were impacted by dispositions and country exits in connection with Groupon’s restructuring efforts. On a same-country basis, gross billings grew 1% year-over-year excluding the unfavorable impact of year-over-year changes in foreign exchange rates. North America gross billings increased 6%, reflecting the contribution of new active customer cohorts, while EMEA declined by 10% and Rest of World declined by 24%. Excluding the impact of changes in foreign exchange rates, EMEA declined 8% and Rest of World declined 23%. Gross billings reflect the total dollar value of customer purchases of goods and services. |
• | Revenue was $720.5 million in the third quarter 2016, compared with $713.6 million in the third quarter 2015. Revenue increased 1% globally, or 2% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter. North America revenue increased 4%, EMEA declined 1% and Rest of World declined 19%. Excluding the impact of changes in foreign exchange rates, EMEA was flat year-over-year and Rest of World declined 15%. |
• | Gross profit was $314.1 million in the third quarter 2016, compared with $328.9 million in the third quarter 2015. Gross profit declined 4% globally. North America gross profit increased 5%, EMEA declined 18% and Rest of World declined 20%. |
• | Net loss from continuing operations was $35.8 million in the third quarter 2016, compared with $24.6 million in the third quarter 2015. |
• | Adjusted EBITDA, a non-GAAP performance measure, was $32.1 million in the third quarter 2016, compared with $56.3 million in the third quarter 2015, reflecting our increased investments in customer acquisition. |
• | Net loss attributable to common stockholders was $38.0 million, or $0.07 per share. Non-GAAP net loss attributable to common stockholders was $8.1 million, or $0.01 per share. |
• | Global units sold declined 5% year-over-year to 49 million, primarily driven by country exits and our restructuring efforts in international segments. Units in North America increased 4%, EMEA units declined 8%, and Rest of World units declined 31%. Units are defined as vouchers and products sold before cancellations and refunds. |
• | Operating cash flow for the trailing twelve months ended September 30, 2016 was $78.9 million. Free cash flow, a non-GAAP liquidity measure, was negative $53.7 million in the third quarter 2016, bringing free cash flow for the trailing twelve months ended September 30, 2016 to $14.2 million, which reflects the adverse cash flow impact of restructuring charges, country exits, and the funding of our securities litigation settlement. |
• | Cash and cash equivalents as of September 30, 2016 were $689.7 million, and we had no outstanding borrowings under our $250.0 million revolving credit facility. |
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
• | North America Local Billings grew 10% year-over-year. North America Local Billings accelerated to 10% year-over-year growth as we continue to see the contribution of new cohorts. |
• | North America accelerated customer growth with nearly 1.2 million incremental active customers. Customer acquisition marketing yielded an incremental 1.2 million active customers in North America, as compared with the prior quarter, which is the highest acquisition in over three years. North America had 29.1 million active customers as of September 30, 2016. Active customers represent unique customer accounts that have purchased a voucher or product within the last twelve months. |
• | SG&A declined $72.0 million, or $34.0 million excluding the impact of a litigation reserve recorded in the third quarter 2015, on solid execution of operational streamlining initiatives. SG&A in all markets declined year-over-year as we continue to execute on our restructuring plan and scale regional shared service centers, which we expect to not only improve our customer service but also create greater operating leverage over time. |
• | Streamlined country footprint. The Company has identified its go-forward country footprint to consist of 15 countries, down from 27 in the portfolio as of the second quarter 2016. We are pursuing strategic alternatives and other options to exit the remaining countries, which we expect will continue into 2017. |
Acquisition of LivingSocial
On October 24, 2016, Groupon entered into an agreement to acquire all of the outstanding shares of LivingSocial, Inc. The acquisition is expected to close by early November 2016, subject to satisfaction of customary closing conditions. The acquisition consideration is not material.
Share Repurchase
During the third quarter 2016, Groupon repurchased 5,213,778 shares of its Class A common stock for an aggregate purchase price of $24.6 million. Up to $244.7 million of Class A common stock was available for repurchase under Groupon’s share repurchase program as of September 30, 2016. The timing and amount of any share repurchases are determined based on market conditions, share price and other factors, and the program 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, stabilizing trends in Shopping, the acquisition of LivingSocial, potential disruption related to country exits, and cost benefits associated with our streamlining initiatives.
Groupon is raising its revenue guidance range to between $3.075 and $3.150 billion for the full year, and narrowing its expected 2016 Adjusted EBITDA range to between $150.0 million and $165.0 million.
Conference Call
A conference call will be webcast live today at 4:00 p.m. CDT / 5:00 p.m. EDT, 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 loss attributable to common stockholders, non-GAAP earnings
loss 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: gains and losses related to minority investments, foreign currency gains and losses, interest income and interest expense, including non-cash interest expense from our convertible senior notes. 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 three and nine months ended September 30, 2016 and 2015, items that we believe to be unusual in nature or infrequently occurring were gains from business dispositions and charges related to our restructuring plan. During the three and nine months ended September 30, 2015, items that we believe to be unusual in nature or infrequently occurring also included the write-off of a prepaid asset related to a marketing program that was discontinued because the counterparty ceased operations and 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.
Income Tax Effect of Items Excluded from Non-GAAP Financial Measures. We determine the income tax effect of items excluded from our measures of non-GAAP net income (loss) attributable to common stockholders and non-GAAP earnings (loss) per share by performing a tax provision calculation using pre-tax income (loss) amounts that have been adjusted to exclude those items in the respective jurisdictions to which they relate. The difference between the income tax expense (benefit) determined on that basis and our reported income tax expense (benefit) represents the income tax effect of the excluded items.
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 performance measure that we define as net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, acquisition-related expense (benefit), net, and 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 performance 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 are non-GAAP performance measures that 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, |
• | gains on business dispositions, |
• | non-cash interest expense on convertible senior notes, |
• | 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 the above 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 liquidity 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 and any potential adverse impact from the United Kingdom’s likely exit from the European Union; 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; our senior convertible notes; and our ability to realize the anticipated benefits from the hedge and warrant transactions. 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 year ended December 31, 2015, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2016, June 30, 2016 and September 30, 2016 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 October 26, 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 building the daily habit in local commerce, offering a vast mobile and online marketplace where people discover and save on amazing things to do, see, eat and buy. By enabling real-time commerce across local businesses, travel destinations, consumer products and live events, shoppers can find the best a city has to offer.
Groupon is redefining how small businesses attract and retain customers by providing them with customizable and scalable marketing tools and services to profitably grow their businesses.
To download Groupon's top-rated mobile apps, visit www.groupon.com/mobile. To search for great deals or subscribe to Groupon emails, visit www.groupon.com. To learn more about the company’s merchant solutions and how to work with Groupon, visit www.groupon.com/merchant.
Contacts:
Investor Relations Public Relations
Deb Schwartz Bill Roberts
312-662-6535 312-459-5191
ir@groupon.com
Groupon, Inc..
Summary Consolidated and Segment Results
(in thousands, except share and per share amounts)
(unaudited)
The financial results of Ticket Monster are presented as discontinued operations in the accompanying condensed consolidated financial statements and tables for the nine months ended September 30, 2015. All prior period financial information and operational metrics have been retrospectively adjusted to reflect this presentation.
Three Months Ended September 30, | Y/Y % Growth | FX Effect(2) | Y/Y % Growth excluding FX(2) | Nine Months Ended September 30, | Y/Y % Growth | FX Effect(2) | Y/Y % Growth excluding FX(2) | |||||||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||||||||||||||||||
Gross Billings(1): | ||||||||||||||||||||||||||||||||||||||||
North America | $ | 920,962 | $ | 869,203 | 6.0 | % | $ | 17 | 6.0 | % | $ | 2,824,290 | $ | 2,659,436 | 6.2 | % | $ | (1,085 | ) | 6.2 | % | |||||||||||||||||||
EMEA | 370,992 | 414,482 | (10.5 | ) | (8,371 | ) | (8.5 | ) | 1,144,528 | 1,307,207 | (12.4 | ) | (20,595 | ) | (10.9 | ) | ||||||||||||||||||||||||
Rest of World | 140,201 | 183,849 | (23.7 | ) | (1,802 | ) | (22.8 | ) | 428,229 | 581,905 | (26.4 | ) | (35,628 | ) | (20.3 | ) | ||||||||||||||||||||||||
Consolidated gross billings | $ | 1,432,155 | $ | 1,467,534 | (2.4 | ) | % | $ | (10,156 | ) | (1.7 | ) | % | $ | 4,397,047 | $ | 4,548,548 | (3.3 | ) | % | $ | (57,308 | ) | (2.1 | ) | % | ||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||||
North America | $ | 483,281 | $ | 463,931 | 4.2 | % | $ | 4 | 4.2 | % | $ | 1,501,016 | $ | 1,425,095 | 5.3 | % | $ | (260 | ) | 5.3 | % | |||||||||||||||||||
EMEA | 196,573 | 199,287 | (1.4 | ) | (2,718 | ) | — | 583,848 | 619,554 | (5.8 | ) | (7,626 | ) | (4.5 | ) | |||||||||||||||||||||||||
Rest of World | 40,614 | 50,377 | (19.4 | ) | (1,976 | ) | (15.5 | ) | 123,605 | 157,697 | (21.6 | ) | (14,576 | ) | (12.4 | ) | ||||||||||||||||||||||||
Consolidated revenue | $ | 720,468 | $ | 713,595 | 1.0 | % | $ | (4,690 | ) | 1.6 | % | $ | 2,208,469 | $ | 2,202,346 | 0.3 | % | $ | (22,462 | ) | 1.3 | % | ||||||||||||||||||
Income (loss) from operations | $ | (26,685 | ) | $ | (70,423 | ) | 62.1 | % | $ | (562 | ) | 62.9 | % | $ | (117,187 | ) | $ | (74,354 | ) | (57.6 | ) | % | $ | (1,005 | ) | (56.3 | ) | % | ||||||||||||
Income (loss) from continuing operations | $ | (35,792 | ) | $ | (24,613 | ) | $ | (133,119 | ) | $ | (56,619 | ) | ||||||||||||||||||||||||||||
Income (loss) from discontinued operations, net of tax | $ | — | $ | — | $ | — | $ | 133,463 | ||||||||||||||||||||||||||||||||
Net income (loss) attributable to Groupon, Inc. | $ | (37,976 | ) | $ | (27,615 | ) | $ | (141,999 | ) | $ | 67,196 | |||||||||||||||||||||||||||||
Basic net income (loss) per share: | ||||||||||||||||||||||||||||||||||||||||
Continuing operations | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.25 | ) | $ | (0.10 | ) | ||||||||||||||||||||||||||||
Discontinued operations | — | — | — | 0.20 | ||||||||||||||||||||||||||||||||||||
Basic net income (loss) per share | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.25 | ) | $ | 0.10 | |||||||||||||||||||||||||||||
Diluted net income (loss) per share: | ||||||||||||||||||||||||||||||||||||||||
Continuing operations | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.25 | ) | $ | (0.10 | ) | ||||||||||||||||||||||||||||
Discontinued operations | — | — | — | 0.20 | ||||||||||||||||||||||||||||||||||||
Diluted net income (loss) per share | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.25 | ) | $ | 0.10 | |||||||||||||||||||||||||||||
Weighted average number of shares outstanding | ||||||||||||||||||||||||||||||||||||||||
Basic | 575,216,191 | 644,894,785 | 578,290,291 | 664,302,630 | ||||||||||||||||||||||||||||||||||||
Diluted | 575,216,191 | 644,894,785 | 578,290,291 | 664,302,630 | ||||||||||||||||||||||||||||||||||||
(1) | Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds. |
(2) | Represents the change in financial measures that would have resulted had average exchange rates in the reporting period been the same as those in effect during the three and nine months ended September 30, 2015. |
Groupon, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 (1) | 2016 | 2015 (1) | ||||||||||||
Operating activities | |||||||||||||||
Net income (loss) | $ | (35,792 | ) | $ | (24,613 | ) | $ | (133,119 | ) | $ | 76,844 | ||||
Less: Income (loss) from discontinued operations, net of tax | — | — | — | 133,463 | |||||||||||
Income (loss) from continuing operations | (35,792 | ) | (24,613 | ) | (133,119 | ) | (56,619 | ) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization of property, equipment and software | 28,845 | 30,475 | 88,697 | 84,241 | |||||||||||
Amortization of acquired intangible assets | 4,408 | 5,160 | 13,643 | 14,966 | |||||||||||
Stock-based compensation | 26,442 | 35,575 | 94,750 | 109,204 | |||||||||||
Restructuring-related long-lived asset impairments | — | 345 | 45 | 345 | |||||||||||
Gains on business dispositions | (2,060 | ) | (13,710 | ) | (11,399 | ) | (13,710 | ) | |||||||
Deferred income taxes | (1,288 | ) | (15,202 | ) | (6,436 | ) | (15,252 | ) | |||||||
(Gain) loss, net from changes in fair value of contingent consideration | (162 | ) | 435 | 4,130 | (268 | ) | |||||||||
(Gain) loss from changes in fair value of investments | 1,594 | 2,564 | 7,301 | 2,114 | |||||||||||
Amortization of debt discount on convertible senior notes | 2,458 | — | 4,854 | — | |||||||||||
Change in assets and liabilities, net of acquisitions: | |||||||||||||||
Restricted cash | 361 | 1,392 | (332 | ) | 4,555 | ||||||||||
Accounts receivable | (4,798 | ) | 16,635 | (3,593 | ) | 6,353 | |||||||||
Prepaid expenses and other current assets | 44,266 | (33,366 | ) | 10,738 | (39,813 | ) | |||||||||
Accounts payable | 2,831 | 5,371 | (4,326 | ) | (944 | ) | |||||||||
Accrued merchant and supplier payables | (46,354 | ) | (51,319 | ) | (171,816 | ) | (101,852 | ) | |||||||
Accrued expenses and other current liabilities | (51,854 | ) | 51,169 | (47,919 | ) | 57,214 | |||||||||
Other, net | (9,719 | ) | (18,551 | ) | (16,775 | ) | (1,242 | ) | |||||||
Net cash provided by (used in) operating activities from continuing operations | (40,822 | ) | (7,640 | ) | (171,557 | ) | 49,292 | ||||||||
Net cash provided by (used in) operating activities from discontinued operations | — | (19,205 | ) | — | (36,578 | ) | |||||||||
Net cash provided by (used in) operating activities | (40,822 | ) | (26,845 | ) | (171,557 | ) | 12,714 | ||||||||
Net cash provided by (used in) investing activities from continuing operations | (12,088 | ) | (98,028 | ) | (51,719 | ) | (146,012 | ) | |||||||
Net cash provided by (used in) investing activities from discontinued operations | — | — | — | 244,470 | |||||||||||
Net cash provided by (used in) investing activities | (12,088 | ) | (98,028 | ) | (51,719 | ) | 98,458 | ||||||||
Net cash provided by (used in) financing activities | (38,342 | ) | (14,793 | ) | 52,868 | (192,188 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents, including cash classified within current assets held for sale | 867 | (6,923 | ) | 6,793 | (27,338 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents, including cash classified within current assets held for sale | (90,385 | ) | (146,589 | ) | (163,615 | ) | (108,354 | ) | |||||||
Less: Net increase (decrease) in cash classified within current assets held for sale | — | — | — | (55,279 | ) | ||||||||||
Net increase (decrease) in cash and cash equivalents | (90,385 | ) | (146,589 | ) | (163,615 | ) | (53,075 | ) | |||||||
Cash and cash equivalents, beginning of period | 780,132 | 1,110,148 | 853,362 | 1,016,634 | |||||||||||
Cash and cash equivalents, end of period | $ | 689,747 | $ | 963,559 | $ | 689,747 | $ | 963,559 | |||||||
(1) | The Company adopted the guidance in Accounting Standards Update ("ASU") 2016-09, Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting, on January 1, 2016. ASU 2016-09 requires that all income tax-related cash flows resulting from share-based payments be reported as operating activities in the statement of cash flows. Previously, income tax benefits at settlement of an award were reported as a reduction to operating cash flows and an increase to financing cash flows to the extent that those benefits exceeded the income tax benefits reported in earnings during the award's vesting period. The Company has elected to apply that change in cash flow classification on a retrospective basis, which has resulted in a decrease to net cash provided by (used in) operating activities and net cash used in financing activities of $0.03 million for the three months ended September 30, 2015, and increases to net cash provided by (used in) operating activities and net cash used in financing activities of $6.2 million for the nine months ended September 30, 2015. |
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, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenue: | ||||||||||||||||
Third party and other | $ | 309,836 | $ | 326,306 | $ | 962,533 | $ | 1,027,273 | ||||||||
Direct | 410,632 | 387,289 | 1,245,936 | 1,175,073 | ||||||||||||
Total revenue | 720,468 | 713,595 | 2,208,469 | 2,202,346 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Third party and other | 40,419 | 46,050 | 131,000 | 145,292 | ||||||||||||
Direct | 365,932 | 338,633 | 1,090,436 | 1,043,729 | ||||||||||||
Total cost of revenue | 406,351 | 384,683 | 1,221,436 | 1,189,021 | ||||||||||||
Gross profit | 314,117 | 328,912 | 987,033 | 1,013,325 | ||||||||||||
Operating expenses: | ||||||||||||||||
Marketing | 87,858 | 61,587 | 269,616 | 171,127 | ||||||||||||
Selling, general and administrative | 253,554 | 326,248 | 811,710 | 904,816 | ||||||||||||
Restructuring charges | 1,459 | 24,146 | 29,988 | 24,146 | ||||||||||||
Gains on business dispositions | (2,060 | ) | (13,710 | ) | (11,399 | ) | (13,710 | ) | ||||||||
Acquisition-related expense (benefit), net | (9 | ) | 1,064 | 4,305 | 1,300 | |||||||||||
Total operating expenses | 340,802 | 399,335 | 1,104,220 | 1,087,679 | ||||||||||||
Income (loss) from operations | (26,685 | ) | (70,423 | ) | (117,187 | ) | (74,354 | ) | ||||||||
Other income (expense), net (1) | (7,028 | ) | (8,160 | ) | (14,303 | ) | (25,146 | ) | ||||||||
Income (loss) from continuing operations before provision (benefit) for income taxes | (33,713 | ) | (78,583 | ) | (131,490 | ) | (99,500 | ) | ||||||||
Provision (benefit) for income taxes | 2,079 | (53,970 | ) | 1,629 | (42,881 | ) | ||||||||||
Income (loss) from continuing operations | (35,792 | ) | (24,613 | ) | (133,119 | ) | (56,619 | ) | ||||||||
Income (loss) from discontinued operations, net of tax | — | — | — | 133,463 | ||||||||||||
Net income (loss) | (35,792 | ) | (24,613 | ) | (133,119 | ) | 76,844 | |||||||||
Net income attributable to noncontrolling interests | (2,184 | ) | (3,002 | ) | (8,880 | ) | (9,648 | ) | ||||||||
Net income (loss) attributable to Groupon, Inc. | $ | (37,976 | ) | $ | (27,615 | ) | $ | (141,999 | ) | $ | 67,196 | |||||
Basic net income (loss) per share: | ||||||||||||||||
Continuing operations | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.25 | ) | $ | (0.10 | ) | ||||
Discontinued operations | — | — | — | 0.20 | ||||||||||||
Basic net income (loss) per share | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.25 | ) | $ | 0.10 | |||||
Diluted net income (loss) per share: | ||||||||||||||||
Continuing operations | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.25 | ) | $ | (0.10 | ) | ||||
Discontinued operations | — | — | — | 0.20 | ||||||||||||
Diluted net income (loss) per share | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.25 | ) | $ | 0.10 | |||||
Weighted average number of shares outstanding | ||||||||||||||||
Basic | 575,216,191 | 644,894,785 | 578,290,291 | 664,302,630 | ||||||||||||
Diluted | 575,216,191 | 644,894,785 | 578,290,291 | 664,302,630 | ||||||||||||
(1) | Other income (expense), net includes foreign currency gains (losses), net of $0.2 million and $(5.2 million) for the three months ended September 30, 2016 and 2015, respectively, and foreign currency gains (losses), net of $5.4 million and $(22.1 million) for the nine months ended September 30, 2016 and 2015, respectively. |
Groupon, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
September 30, 2016 | December 31, 2015 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 689,747 | $ | 853,362 | ||||
Accounts receivable, net | 74,047 | 68,175 | ||||||
Prepaid expenses and other current assets | 145,280 | 153,705 | ||||||
Total current assets | 909,074 | 1,075,242 | ||||||
Property, equipment and software, net | 179,987 | 198,897 | ||||||
Goodwill | 289,856 | 287,332 | ||||||
Intangible assets, net | 25,475 | 36,483 | ||||||
Investments (including $150,532 and $163,675 at September 30, 2016 and December 31, 2015, respectively, at fair value) | 180,617 | 178,236 | ||||||
Deferred income taxes | 4,242 | 3,454 | ||||||
Other non-current assets | 24,290 | 16,620 | ||||||
Total Assets | $ | 1,613,541 | $ | 1,796,264 | ||||
Liabilities and Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 21,833 | $ | 24,590 | ||||
Accrued merchant and supplier payables | 608,939 | 776,211 | ||||||
Accrued expenses and other current liabilities | 353,696 | 402,724 | ||||||
Total current liabilities | 984,468 | 1,203,525 | ||||||
Convertible senior notes, net | 176,473 | — | ||||||
Deferred income taxes | 6,840 | 8,612 | ||||||
Other non-current liabilities | 113,604 | 113,540 | ||||||
Total Liabilities | 1,281,385 | 1,325,677 | ||||||
Commitments and contingencies | ||||||||
Stockholders' Equity | ||||||||
Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized, 730,849,600 shares issued and 571,551,487 shares outstanding at September 30, 2016 and 717,387,446 shares issued and 588,919,281 shares outstanding at December 31, 2015 | 73 | 72 | ||||||
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, 2016 and December 31, 2015 | — | — | ||||||
Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized, no shares issued and outstanding at September 30, 2016 and December 31, 2015 | — | — | ||||||
Additional paid-in capital | 2,094,975 | 1,964,453 | ||||||
Treasury stock, at cost, 159,298,113 shares at September 30, 2016 and 128,468,165 shares at December 31, 2015 | (757,520 | ) | (645,041 | ) | ||||
Accumulated deficit | (1,046,422 | ) | (901,292 | ) | ||||
Accumulated other comprehensive income (loss) | 40,132 | 51,206 | ||||||
Total Groupon, Inc. Stockholders' Equity | 331,238 | 469,398 | ||||||
Noncontrolling interests | 918 | 1,189 | ||||||
Total Equity | 332,156 | 470,587 | ||||||
Total Liabilities and Equity | $ | 1,613,541 | $ | 1,796,264 | ||||
Groupon, Inc.
Segment Information
(in thousands)
(unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||
North America | ||||||||||||||||||
Gross billings (1) | $ | 920,962 | $ | 869,203 | $ | 2,824,290 | $ | 2,659,436 | ||||||||||
Revenue | $ | 483,281 | $ | 463,931 | $ | 1,501,016 | $ | 1,425,095 | ||||||||||
Segment cost of revenue and operating expenses (2)(3)(4) | 483,036 | 494,843 | 1,510,731 | 1,404,472 | ||||||||||||||
Segment operating income (loss) (2) | $ | 245 | $ | (30,912 | ) | $ | (9,715 | ) | $ | 20,623 | ||||||||
Segment operating income (loss) as a percent of segment gross billings | — | % | (3.6 | ) | % | (0.3 | ) | % | 0.8 | % | ||||||||
Segment operating income (loss) as a percent of segment revenue | 0.1 | % | (6.7 | ) | % | (0.6 | ) | % | 1.4 | % | ||||||||
EMEA | ||||||||||||||||||
Gross billings (1) | $ | 370,992 | $ | 414,482 | $ | 1,144,528 | $ | 1,307,207 | ||||||||||
Revenue | $ | 196,573 | $ | 199,287 | $ | 583,848 | $ | 619,554 | ||||||||||
Segment cost of revenue and operating expenses (2)(4)(5) | 192,692 | 195,397 | 570,294 | 586,343 | ||||||||||||||
Segment operating income (loss) (2) | $ | 3,881 | $ | 3,890 | $ | 13,554 | $ | 33,211 | ||||||||||
Segment operating income (loss) as a percent of segment gross billings | 1.0 | % | 0.9 | % | 1.2 | % | 2.5 | % | ||||||||||
Segment operating income (loss) as a percent of segment revenue | 2.0 | % | 2.0 | % | 2.3 | % | 5.4 | % | ||||||||||
Rest of World | ||||||||||||||||||
Gross billings (1) | $ | 140,201 | $ | 183,849 | $ | 428,229 | $ | 581,905 | ||||||||||
Revenue | $ | 40,614 | $ | 50,377 | $ | 123,605 | $ | 157,697 | ||||||||||
Segment cost of revenue and operating expenses (2)(4) | 45,284 | 57,282 | 146,247 | 175,542 | ||||||||||||||
Segment operating income (loss) (2) | $ | (4,670 | ) | $ | (6,905 | ) | $ | (22,642 | ) | $ | (17,845 | ) | ||||||
Segment operating income (loss) as a percent of segment gross billings | (3.3 | ) | % | (3.8 | ) | % | (5.3 | ) | % | (3.1 | ) | % | ||||||
Segment operating income (loss) as a percent of segment revenue | (11.5 | ) | % | (13.7 | ) | % | (18.3 | ) | % | (11.3 | ) | % | ||||||
(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, which was subsequently settled. |
(4) | Segment cost of revenue and operating expenses for the three months ended September 30, 2016 includes restructuring charges of $1.0 million in North America, $(0.2) million in EMEA and $0.7 million in Rest of World. Segment cost of revenue and operating expenses for the nine months ended September 30, 2016 includes restructuring charges of $6.8 million in North America (which excludes $2.6 million of stock-based compensation), $13.9 million in EMEA (which excludes $2.1 million of stock-based compensation) and $4.6 million in Rest of World (which excludes $0.02 million of stock-based compensation). 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 performance measures. The Company reconciles Adjusted EBITDA to the most comparable U.S. GAAP performance 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 performance 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 performance measure, "Income (loss) from continuing operations."
Q3 2015 | Q4 2015 | Q1 2016 | Q2 2016 | Q3 2016 | ||||||||||||||||
Income (loss) from continuing operations | $ | (24,613 | ) | $ | (32,552 | ) | $ | (45,596 | ) | $ | (51,731 | ) | $ | (35,792 | ) | |||||
Adjustments: | ||||||||||||||||||||
Stock-based compensation (1) | 35,432 | 32,691 | 27,976 | 35,244 | 26,176 | |||||||||||||||
Depreciation and amortization | 35,635 | 33,763 | 34,797 | 34,290 | 33,253 | |||||||||||||||
Acquisition-related expense (benefit), net | 1,064 | 557 | 3,464 | 850 | (9 | ) | ||||||||||||||
Gains on business dispositions | (13,710 | ) | — | — | (9,339 | ) | (2,060 | ) | ||||||||||||
Restructuring charges | 24,146 | 5,422 | 12,444 | 16,085 | 1,459 | |||||||||||||||
Prepaid marketing write-off | 6,690 | — | — | — | — | |||||||||||||||
Securities litigation expense | 37,500 | — | — | — | — | |||||||||||||||
Non-operating expense (income), net | 8,160 | 3,393 | (3,486 | ) | 10,761 | 7,028 | ||||||||||||||
Provision (benefit) for income taxes | (53,970 | ) | 23,736 | 1,749 | (2,199 | ) | 2,079 | |||||||||||||
Total adjustments | 80,947 | 99,562 | 76,944 | 85,692 | 67,926 | |||||||||||||||
Adjusted EBITDA | $ | 56,334 | $ | 67,010 | $ | 31,348 | $ | 33,961 | $ | 32,134 | ||||||||||
(1) | Represents stock-based compensation recorded within cost of revenue, marketing expense, and selling, general and administrative expense. Non-operating expense (income), net, includes $0.1 million, $0.2 million, $0.2 million, $0.2 million and $0.3 million of additional stock-based compensation for the three months ended September 30, 2015, December 31, 2015, March 31, 2016, June 30, 2016 and September 30, 2016, respectively. Restructuring charges includes $2.6 million and $2.1 million of additional stock-based compensation for the three months ended March 31, 2016 and June 30, 3016, 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, 2016:
Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2016 | |||||||
Net income (loss) attributable to common stockholders | $ | (37,976 | ) | $ | (141,999 | ) | ||
Stock-based compensation (1) | 26,442 | 90,047 | ||||||
Amortization of acquired intangible assets | 4,408 | 13,643 | ||||||
Acquisition-related expense (benefit), net | (9 | ) | 4,305 | |||||
Restructuring charges | 1,459 | 29,988 | ||||||
Gains on business dispositions | (2,060 | ) | (11,399 | ) | ||||
Intercompany foreign currency losses (gains) and reclassifications of translation adjustments to earnings (2) | (3,263 | ) | (8,377 | ) | ||||
Losses (gains), net from changes in fair value of investments | 1,594 | 7,301 | ||||||
Non-cash interest expense on convertible senior notes | 2,458 | 4,854 | ||||||
Income tax effect of above adjustments | (1,154 | ) | (7,849 | ) | ||||
Non-GAAP net income (loss) attributable to common stockholders | $ | (8,101 | ) | $ | (19,486 | ) | ||
Diluted shares | 575,216,191 | 578,290,291 | ||||||
Incremental diluted shares | — | — | ||||||
Adjusted diluted shares | 575,216,191 | 578,290,291 | ||||||
Diluted net income (loss) per share | $ | (0.07 | ) | $ | (0.25 | ) | ||
Per share impact of adjustments and related tax effects | 0.06 | 0.22 | ||||||
Non-GAAP net income (loss) per share | $ | (0.01 | ) | $ | (0.03 | ) | ||
(1) | Excludes $4.7 million of stock-based compensation classified within restructuring charges for the nine months ended September 30, 2016. |
(2) | Foreign currency gains (losses), net for the nine months ended September 30, 2016 includes $0.3 million of net cumulative translation gains that were reclassified to earnings as a result of the Company's exit from certain countries as part of its restructuring plan. |
The following is a reconciliation of the Company's annual outlook for Adjusted EBITDA to the Company's outlook for the most comparable U.S. GAAP performance measure, "Net income (loss)."
Year Ending December 31, 2016 | |||
Expected net income (loss) range | $(155,394) to $(141,894) | ||
Expected adjustments: | |||
Stock-based compensation | 120,000 | ||
Depreciation and amortization | 136,000 | ||
Acquisition-related expense (benefit), net | 4,305 | ||
Restructuring charges | 29,988 | ||
Gains on business dispositions | (11,399 | ) | |
Non-operating expense (income), net | 20,000 | ||
Provision (benefit) for income taxes | 6,500 to 8,000 | ||
Total expected adjustments | $305,394 to $306,894 | ||
Expected Adjusted EBITDA range | $150,000 to $165,000 | ||
The outlook provided above does not reflect the potential impact of any additional restructuring actions that we may decide to pursue, business acquisitions or dispositions, changes in the fair values of investments or contingent consideration, foreign currency gains or losses or other unusual or non-recurring items that may occur during the fourth quarter of 2016.
Groupon, Inc.
Non-GAAP Reconciliation Schedules
(in thousands, except share and per share amounts)
(unaudited)
Foreign exchange rate neutral operating results are non-GAAP financial measures. The Company reconciles foreign exchange rate neutral operating results to the most comparable U.S. GAAP financial measures, "Gross billings," "Revenue" and "Income (loss) from continuing operations," respectively, for the periods presented. The Company reconciles "foreign exchange rate neutral Gross billings growth" and "foreign exchange rate neutral Revenue growth" to year-over-year growth rates for the most comparable U.S. GAAP financial measures, "Gross billings growth" and "Revenue growth," respectively, for the periods presented.
The effect on the Company's gross billings, revenue and income (loss) from changes in exchange rates versus the U.S. Dollar for the three months ended September 30, 2016 was as follows:
Three Months Ended September 30, 2016 | Three Months Ended September 30, 2016 | |||||||||||||||||||||||
At Avg. Q3 2015 Rates (1) | Exchange Rate Effect (2) | As Reported | At Avg. Q2 2016 Rates (3) | Exchange Rate Effect (2) | As Reported | |||||||||||||||||||
Gross billings | $ | 1,442,311 | $ | (10,156 | ) | $ | 1,432,155 | $ | 1,437,017 | $ | (4,862 | ) | $ | 1,432,155 | ||||||||||
Revenue | 725,158 | (4,690 | ) | 720,468 | 723,157 | (2,689 | ) | 720,468 | ||||||||||||||||
Income (loss) from operations | $ | (26,123 | ) | $ | (562 | ) | $ | (26,685 | ) | $ | (26,481 | ) | $ | (204 | ) | $ | (26,685 | ) | ||||||
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, 2016 was as follows:
Nine Months Ended September 30, 2016 | Nine Months Ended September 30, 2016 | |||||||||||||||||||||||
At Avg. Q3 2015 YTD Rates (1) | Exchange Rate Effect (2) | As Reported | At Avg. Q4'15-Q2'16 Rates (3) | Exchange Rate Effect (2) | As Reported | |||||||||||||||||||
Gross billings | $ | 4,454,355 | $ | (57,308 | ) | $ | 4,397,047 | $ | 4,394,617 | $ | 2,430 | $ | 4,397,047 | |||||||||||
Revenue | 2,230,931 | (22,462 | ) | 2,208,469 | 2,208,022 | 447 | 2,208,469 | |||||||||||||||||
Income (loss) from operations | $ | (116,182 | ) | $ | (1,005 | ) | $ | (117,187 | ) | $ | (115,292 | ) | $ | (1,895 | ) | $ | (117,187 | ) | ||||||
(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, 2015. |
(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, 2016. |
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 2015 | Q4 2015 | Q1 2016 | Q2 2016 | Q3 2016 | ||||||||||||
EMEA Gross billings growth, excluding FX | (1 | ) | % | (2 | ) | % | (12 | ) | % | (12 | ) | % | (8 | ) | % | |
FX Effect | (14 | ) | (11 | ) | (3 | ) | — | (2 | ) | |||||||
EMEA Gross billings growth | (15 | ) | % | (13 | ) | % | (15 | ) | % | (12 | ) | % | (10 | ) | % | |
Rest of World Gross billings growth, excluding FX | — | % | (7 | ) | % | (17 | ) | % | (21 | ) | % | (23 | ) | % | ||
FX Effect | (19 | ) | (14 | ) | (11 | ) | (6 | ) | (1 | ) | ||||||
Rest of World Gross billings growth | (19 | ) | % | (21 | ) | % | (28 | ) | % | (27 | ) | % | (24 | ) | % | |
Consolidated Gross billings growth, excluding FX | 6 | % | 4 | % | (3 | ) | % | (2 | ) | % | (2 | ) | % | |||
FX Effect | (8 | ) | (5 | ) | (2 | ) | — | — | ||||||||
Consolidated Gross billings growth | (2 | ) | % | (1 | ) | % | (5 | ) | % | (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 2015 | Q4 2015 | Q1 2016 | Q2 2016 | Q3 2016 | ||||||||||||
EMEA Revenue growth, excluding FX | 2 | % | 3 | % | (10 | ) | % | (3 | ) | % | — | % | ||||
FX Effect | (15 | ) | (12 | ) | (3 | ) | — | (1 | ) | |||||||
EMEA Revenue growth | (13 | ) | % | (9 | ) | % | (13 | ) | % | (3 | ) | % | (1 | ) | % | |
Rest of World Revenue growth, excluding FX | (5 | ) | % | (8 | ) | % | (8 | ) | % | (14 | ) | % | (15 | ) | % | |
FX Effect | (18 | ) | (15 | ) | (14 | ) | (9 | ) | (4 | ) | ||||||
Rest of World Revenue growth | (23 | ) | % | (23 | ) | % | (22 | ) | % | (23 | ) | % | (19 | ) | % | |
Consolidated Revenue growth, excluding FX | 7 | % | 9 | % | (1 | ) | % | 3 | % | 2 | % | |||||
FX Effect | (7 | ) | (5 | ) | (1 | ) | (1 | ) | (1 | ) | ||||||
Consolidated Revenue growth | — | % | 4 | % | (2 | ) | % | 2 | % | 1 | % | |||||
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, 2016 was as follows:
At Avg. Q3 2015 Rates (1) | Exchange Rate Effect (2) | September 30, 2016 As Reported | September 30, 2015 As Reported | Y/Y % Growth | Y/Y% Growth excluding FX | |||||||||||||||||
Local: | ||||||||||||||||||||||
Third party and other | $ | 530,760 | $ | 8 | $ | 530,768 | $ | 481,608 | 10.2 | % | 10.2 | % | ||||||||||
Travel: | ||||||||||||||||||||||
Third party | 93,562 | 2 | 93,564 | 101,801 | (8.1 | ) | % | (8.1 | ) | % | ||||||||||||
Total services | 624,322 | 10 | 624,332 | 583,409 | 7.0 | % | 7.0 | % | ||||||||||||||
Goods: | ||||||||||||||||||||||
Third party | 12,768 | 7 | 12,775 | 8,686 | 47.1 | % | 47.0 | % | ||||||||||||||
Direct | 283,855 | — | 283,855 | 277,108 | 2.4 | % | 2.4 | % | ||||||||||||||
Total | 296,623 | 7 | 296,630 | 285,794 | 3.8 | % | 3.8 | % | ||||||||||||||
Total gross billings | $ | 920,945 | $ | 17 | $ | 920,962 | $ | 869,203 | 6.0 | % | 6.0 | % | ||||||||||
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 September 30, 2016 was as follows:
At Avg. Q3 2015 Rates (1) | Exchange Rate Effect (2) | September 30, 2016 As Reported | September 30, 2015 As Reported | Y/Y % Growth | Y/Y% Growth excluding FX | |||||||||||||||||
Local: | ||||||||||||||||||||||
Third party and other | $ | 166,081 | $ | (7,289 | ) | $ | 158,792 | $ | 182,540 | (13.0 | ) | % | (9.0 | ) | % | |||||||
Travel: | ||||||||||||||||||||||
Third party | 57,510 | 84 | 57,594 | 64,916 | (11.3 | ) | % | (11.4 | ) | % | ||||||||||||
Total services | 223,591 | (7,205 | ) | 216,386 | 247,456 | (12.6 | ) | % | (9.6 | ) | % | |||||||||||
Goods: | ||||||||||||||||||||||
Third party | 35,564 | (1,295 | ) | 34,269 | 63,918 | (46.4 | ) | % | (44.4 | ) | % | |||||||||||
Direct | 120,208 | 129 | 120,337 | 103,108 | 16.7 | % | 16.6 | % | ||||||||||||||
Total | 155,772 | (1,166 | ) | 154,606 | 167,026 | (7.4 | ) | % | (6.7 | ) | % | |||||||||||
Total gross billings | $ | 379,363 | $ | (8,371 | ) | $ | 370,992 | $ | 414,482 | (10.5 | ) | % | (8.5 | ) | % | |||||||
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, 2016 was as follows:
At Avg. Q3 2015 Rates (1) | Exchange Rate Effect (2) | September 30, 2016 As Reported | September 30, 2015 As Reported | Y/Y % Growth | Y/Y% Growth excluding FX | |||||||||||||||||
Local: | ||||||||||||||||||||||
Third party and other | $ | 79,716 | $ | 602 | $ | 80,318 | $ | 92,972 | (13.6 | ) | % | (14.3 | ) | % | ||||||||
Travel: | ||||||||||||||||||||||
Third party | 24,914 | (748 | ) | 24,166 | 30,709 | (21.3 | ) | % | (18.9 | ) | % | |||||||||||
Total services | 104,630 | (146 | ) | 104,484 | 123,681 | (15.5 | ) | % | (15.4 | ) | % | |||||||||||
Goods: | ||||||||||||||||||||||
Third party | 29,457 | (180 | ) | 29,277 | 53,095 | (44.9 | ) | % | (44.5 | ) | % | |||||||||||
Direct | 7,916 | (1,476 | ) | 6,440 | 7,073 | (8.9 | ) | % | 11.9 | % | ||||||||||||
Total | 37,373 | (1,656 | ) | 35,717 | 60,168 | (40.6 | ) | % | (37.9 | ) | % | |||||||||||
Total gross billings | $ | 142,003 | $ | (1,802 | ) | $ | 140,201 | $ | 183,849 | (23.7 | ) | % | (22.8 | ) | % | |||||||
The effect on consolidated gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended September 30, 2016 was as follows:
At Avg. Q3 2015 Rates (1) | Exchange Rate Effect (2) | September 30, 2016 As Reported | September 30, 2015 As Reported | Y/Y % Growth | Y/Y% Growth excluding FX | |||||||||||||||||
Local: | ||||||||||||||||||||||
Third party and other | $ | 776,557 | $ | (6,679 | ) | $ | 769,878 | $ | 757,120 | 1.7 | % | 2.6 | % | |||||||||
Travel: | ||||||||||||||||||||||
Third party | 175,986 | (662 | ) | 175,324 | 197,426 | (11.2 | ) | % | (10.9 | ) | % | |||||||||||
Total services | 952,543 | (7,341 | ) | 945,202 | 954,546 | (1.0 | ) | % | (0.2 | ) | % | |||||||||||
Goods: | ||||||||||||||||||||||
Third party | 77,789 | (1,468 | ) | 76,321 | 125,699 | (39.3 | ) | % | (38.1 | ) | % | |||||||||||
Direct | 411,979 | (1,347 | ) | 410,632 | 387,289 | 6.0 | % | 6.4 | % | |||||||||||||
Total | 489,768 | (2,815 | ) | 486,953 | 512,988 | (5.1 | ) | % | (4.5 | ) | % | |||||||||||
Total gross billings | $ | 1,442,311 | $ | (10,156 | ) | $ | 1,432,155 | $ | 1,467,534 | (2.4 | ) | % | (1.7 | ) | % | |||||||
(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, 2015. |
(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. |
The following is a reconciliation of foreign exchange rate neutral same country gross billings growth for the three months ended September 30, 2016 from the prior year period:
September 30, 2016 | September 30, 2015 | Y/Y % Growth | |||||||||
Gross billings as reported | $ | 1,432,155 | $ | 1,467,534 | (2.4 | )% | |||||
Less: Gross billings from countries where Groupon no longer operates | (763 | ) | (36,255 | ) | |||||||
Exchange rate effect (1) | 10,156 | — | |||||||||
Same-country gross billings | $ | 1,441,548 | $ | 1,431,279 | 0.7 | % | |||||
(1) | Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable prior year period. |
The following is a reconciliation of foreign exchange rate neutral same country gross billings growth for our EMEA segment for the three months ended September 30, 2016 from the prior year period:
September 30, 2016 | September 30, 2015 | Y/Y % Growth | |||||||||
EMEA gross billings as reported | $ | 370,992 | $ | 414,482 | (10.5 | )% | |||||
Less: EMEA Gross billings from countries where Groupon no longer operates | — | (26,488 | ) | ||||||||
Exchange rate effect (1) | 8,371 | — | |||||||||
Same-country gross billings | $ | 379,363 | $ | 387,994 | (2.2 | )% | |||||
(1) | Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable prior year period. |
The following is a reconciliation of foreign exchange rate neutral same-country revenue growth for our EMEA segment for the three months ended September 30, 2016 from the prior year period:
September 30, 2016 | September 30, 2015 | Y/Y % Growth | |||||||||
EMEA revenue as reported | $ | 196,573 | $ | 199,287 | (1.4 | )% | |||||
Less: EMEA revenue from countries where Groupon no longer operates | — | (11,078 | ) | ||||||||
Exchange rate effect (1) | 2,718 | — | |||||||||
Same-country revenue | $ | 199,291 | $ | 188,209 | 5.9 | % | |||||
(1) | 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)(11)
(financial data in thousands; active customers in millions)
(unaudited)
Q3 2015 | Q4 2015 | Q1 2016 | Q2 2016 | Q3 2016 | |||||||||||||||||
Segments | |||||||||||||||||||||
North America Segment: | |||||||||||||||||||||
Gross Billings (1): | |||||||||||||||||||||
Local (2) Gross Billings | $ | 481,608 | $ | 531,154 | $ | 539,623 | $ | 542,439 | $ | 530,768 | |||||||||||
Travel Gross Billings | 101,801 | 89,389 | 103,390 | 105,388 | 93,564 | ||||||||||||||||
Gross Billings - Services | 583,409 | 620,543 | 643,013 | 647,827 | 624,332 | ||||||||||||||||
Gross Billings - Goods | 285,794 | 429,818 | 294,061 | 318,427 | 296,630 | ||||||||||||||||
Total Gross Billings | $ | 869,203 | $ | 1,050,361 | $ | 937,074 | $ | 966,254 | $ | 920,962 | |||||||||||
Year-over-year growth | 12 | % | 11 | % | 5 | % | 8 | % | 6 | % | |||||||||||
% Third Party and Other | 68 | % | 60 | % | 70 | % | 68 | % | 69 | % | |||||||||||
% Direct | 32 | % | 40 | % | 30 | % | 32 | % | 31 | % | |||||||||||
Gross Billings Trailing Twelve Months (TTM) | $ | 3,608,015 | $ | 3,709,797 | $ | 3,752,894 | $ | 3,822,892 | $ | 3,874,651 | |||||||||||
Revenue (3): | |||||||||||||||||||||
Local Revenue | $ | 163,786 | $ | 184,201 | $ | 192,153 | $ | 184,139 | $ | 176,220 | |||||||||||
Travel Revenue | 21,394 | 18,390 | 20,914 | 21,401 | 21,241 | ||||||||||||||||
Revenue - Services | 185,180 | 202,591 | 213,067 | 205,540 | 197,461 | ||||||||||||||||
Revenue - Goods | 278,751 | 420,056 | 287,746 | 311,382 | 285,820 | ||||||||||||||||
Total Revenue | $ | 463,931 | $ | 622,647 | $ | 500,813 | $ | 516,922 | $ | 483,281 | |||||||||||
Year-over-year growth | 11 | % | 13 | % | 4 | % | 7 | % | 4 | % | |||||||||||
% Third Party and Other | 40 | % | 33 | % | 43 | % | 40 | % | 41 | % | |||||||||||
% Direct | 60 | % | 67 | % | 57 | % | 60 | % | 59 | % | |||||||||||
Revenue TTM | $ | 1,976,069 | $ | 2,047,742 | $ | 2,068,673 | $ | 2,104,313 | $ | 2,123,663 | |||||||||||
Gross Profit (4): | |||||||||||||||||||||
Local Gross Profit | $ | 138,798 | $ | 159,745 | $ | 164,018 | $ | 158,812 | $ | 152,873 | |||||||||||
% of North America Local Gross Billings | 28.8 | % | 30.1 | % | 30.4 | % | 29.3 | % | 28.8 | % | |||||||||||
Travel Gross Profit | 17,644 | 15,207 | 15,712 | 16,334 | 17,257 | ||||||||||||||||
% of North America Travel Gross Billings | 17.3 | % | 17.0 | % | 15.2 | % | 15.5 | % | 18.4 | % | |||||||||||
Gross Profit - Services | 156,442 | 174,952 | 179,730 | 175,146 | 170,130 | ||||||||||||||||
% of North America Services Gross Billings | 26.8 | % | 28.2 | % | 28.0 | % | 27.0 | % | 27.2 | % | |||||||||||
Gross Profit - Goods | 34,801 | 44,329 | 36,213 | 42,028 | 31,531 | ||||||||||||||||
% of North America Goods Gross Billings | 12.2 | % | 10.3 | % | 12.3 | % | 13.2 | % | 10.6 | % | |||||||||||
Total Gross Profit | $ | 191,243 | $ | 219,281 | $ | 215,943 | $ | 217,174 | $ | 201,661 | |||||||||||
Year-over-year growth | 9 | % | 12 | % | 11 | % | 10 | % | 5 | % | |||||||||||
% Third Party and Other | 83 | % | 81 | % | 84 | % | 82 | % | 85 | % | |||||||||||
% Direct | 17 | % | 19 | % | 16 | % | 18 | % | 15 | % | |||||||||||
% of North America Total Gross Billings | 22.0 | % | 20.9 | % | 23.0 | % | 22.5 | % | 21.9 | % | |||||||||||
EMEA Segment: | |||||||||||||||||||||
Gross Billings: | |||||||||||||||||||||
Local Gross Billings | $ | 182,540 | $ | 197,445 | $ | 174,033 | $ | 165,290 | $ | 158,792 | |||||||||||
Travel Gross Billings | 64,916 | 59,836 | 57,201 | 52,880 | 57,594 | ||||||||||||||||
Gross Billings - Services | 247,456 | 257,281 | 231,234 | 218,170 | 216,386 | ||||||||||||||||
Gross Billings - Goods | 167,026 | 229,866 | 160,993 | 163,139 | 154,606 | ||||||||||||||||
Total Gross Billings | $ | 414,482 | $ | 487,147 | $ | 392,227 | $ | 381,309 | $ | 370,992 | |||||||||||
Year-over-year growth | (15 | ) | % | (13 | ) | % | (15 | ) | % | (12 | ) | % | (10 | ) | % | ||||||
Year-over-year growth, excluding FX (5) | (1 | ) | % | (2 | ) | % | (12 | ) | % | (12 | ) | % | (8 | ) | % | ||||||
% Third Party and Other | 75 | % | 70 | % | 73 | % | 68 | % | 68 | % | |||||||||||
% Direct | 25 | % | 30 | % | 27 | % | 32 | % | 32 | % | |||||||||||
Gross Billings TTM | $ | 1,867,748 | $ | 1,794,354 | $ | 1,727,392 | $ | 1,675,165 | $ | 1,631,675 | |||||||||||
Revenue: | |||||||||||||||||||||
Local Revenue | $ | 70,781 | $ | 73,225 | $ | 61,886 | $ | 60,616 | $ | 58,581 | |||||||||||
Travel Revenue | 13,561 | 11,681 | 11,178 | 10,709 | 12,866 | ||||||||||||||||
Revenue - Services | 84,342 | 84,906 | 73,064 | 71,325 | 71,447 | ||||||||||||||||
Revenue - Goods | 114,945 | 163,420 | 115,906 | 126,980 | 125,126 | ||||||||||||||||
Total Revenue | $ | 199,287 | $ | 248,326 | $ | 188,970 | $ | 198,305 | $ | 196,573 | |||||||||||
Year-over-year growth | (13 | ) | % | (9 | ) | % | (13 | ) | % | (3 | ) | % | (1 | ) | % | ||||||
Year-over-year growth, excluding FX | 2 | % | 3 | % | (10 | ) | % | (3 | ) | % | — | % | |||||||||
% Third Party and Other | 48 | % | 41 | % | 44 | % | 39 | % | 39 | % | |||||||||||
% Direct | 52 | % | 59 | % | 56 | % | 61 | % | 61 | % | |||||||||||
Revenue TTM | $ | 892,029 | $ | 867,880 | $ | 840,630 | $ | 834,888 | $ | 832,174 | |||||||||||
Q3 2015 | Q4 2015 | Q1 2016 | Q2 2016 | Q3 2016 | |||||||||||||||||
Gross Profit: | |||||||||||||||||||||
Local Gross Profit | $ | 66,288 | $ | 68,966 | $ | 58,263 | $ | 56,849 | $ | 54,467 | |||||||||||
% of EMEA Local Gross Billings | 36.3 | % | 34.9 | % | 33.5 | % | 34.4 | % | 34.3 | % | |||||||||||
Travel Gross Profit | 12,323 | 10,732 | 10,215 | 9,784 | 11,882 | ||||||||||||||||
% of EMEA Travel Gross Billings | 19.0 | % | 17.9 | % | 17.9 | % | 18.5 | % | 20.6 | % | |||||||||||
Gross Profit - Services | 78,611 | 79,698 | 68,478 | 66,633 | 66,349 | ||||||||||||||||
% of EMEA Services Gross Billings | 31.8 | % | 31.0 | % | 29.6 | % | 30.5 | % | 30.7 | % | |||||||||||
Gross Profit - Goods | 24,905 | 43,026 | 26,412 | 23,525 | 18,710 | ||||||||||||||||
% of EMEA Goods Gross Billings | 14.9 | % | 18.7 | % | 16.4 | % | 14.4 | % | 12.1 | % | |||||||||||
Total Gross Profit | $ | 103,516 | $ | 122,724 | $ | 94,890 | $ | 90,158 | $ | 85,059 | |||||||||||
Year-over-year growth | (21 | ) | % | (14 | ) | % | (18 | ) | % | (13 | ) | % | (18 | ) | % | ||||||
% Third Party and Other | 86 | % | 77 | % | 82 | % | 79 | % | 83 | % | |||||||||||
% Direct | 14 | % | 23 | % | 18 | % | 21 | % | 17 | % | |||||||||||
% of EMEA Total Gross Billings | 25.0 | % | 25.2 | % | 24.2 | % | 23.6 | % | 22.9 | % | |||||||||||
Rest of World Segment: | |||||||||||||||||||||
Gross Billings: | |||||||||||||||||||||
Local Gross Billings | $ | 92,972 | $ | 83,430 | $ | 75,294 | $ | 84,581 | $ | 80,318 | |||||||||||
Travel Gross Billings | 30,709 | 25,369 | 23,928 | 22,300 | 24,166 | ||||||||||||||||
Gross Billings - Services | 123,681 | 108,799 | 99,222 | 106,881 | 104,484 | ||||||||||||||||
Gross Billings - Goods | 60,168 | 60,685 | 43,487 | 38,438 | 35,717 | ||||||||||||||||
Total Gross Billings | $ | 183,849 | $ | 169,484 | $ | 142,709 | $ | 145,319 | $ | 140,201 | |||||||||||
Year-over-year growth | (19 | ) | % | (21 | ) | % | (28 | ) | % | (27 | ) | % | (24 | ) | % | ||||||
Year-over-year growth, excluding FX | — | % | (7 | ) | % | (17 | ) | % | (21 | ) | % | (23 | ) | % | |||||||
% Third Party and Other | 96 | % | 95 | % | 95 | % | 95 | % | 95 | % | |||||||||||
% Direct | 4 | % | 5 | % | 5 | % | 5 | % | 5 | % | |||||||||||
Gross Billings TTM | $ | 797,454 | $ | 751,389 | $ | 695,263 | $ | 641,361 | $ | 597,713 | |||||||||||
Revenue: | |||||||||||||||||||||
Local Revenue | $ | 26,372 | $ | 22,229 | $ | 22,082 | $ | 22,461 | $ | 21,876 | |||||||||||
Travel Revenue | 6,135 | 5,098 | 5,049 | 4,321 | 5,075 | ||||||||||||||||
Revenue - Services | 32,507 | 27,327 | 27,131 | 26,782 | 26,951 | ||||||||||||||||
Revenue - Goods | 17,870 | 18,870 | 15,057 | 14,021 | 13,663 | ||||||||||||||||
Total Revenue | $ | 50,377 | $ | 46,197 | $ | 42,188 | $ | 40,803 | $ | 40,614 | |||||||||||
Year-over-year growth | (23 | ) | % | (23 | ) | % | (22 | ) | % | (23 | ) | % | (19 | ) | % | ||||||
Year-over-year growth, excluding FX | (5 | ) | % | (8 | ) | % | (8 | ) | % | (14 | ) | % | (15 | ) | % | ||||||
% Third Party and Other | 86 | % | 82 | % | 85 | % | 82 | % | 84 | % | |||||||||||
% Direct | 14 | % | 18 | % | 15 | % | 18 | % | 16 | % | |||||||||||
Revenue TTM | $ | 217,476 | $ | 203,894 | $ | 191,828 | $ | 179,565 | $ | 169,802 | |||||||||||
Gross Profit: | |||||||||||||||||||||
Local Gross Profit | $ | 22,568 | $ | 18,889 | $ | 18,771 | $ | 18,739 | $ | 18,645 | |||||||||||
% of Rest of World Local Gross Billings | 24.3 | % | 22.6 | % | 24.9 | % | 22.2 | % | 23.2 | % | |||||||||||
Travel Gross Profit | 4,859 | 4,040 | 3,997 | 3,240 | 3,962 | ||||||||||||||||
% of Rest of World Travel Gross Billings | 15.8 | % | 15.9 | % | 16.7 | % | 14.5 | % | 16.4 | % | |||||||||||
Gross Profit - Services | 27,427 | 22,929 | 22,768 | 21,979 | 22,607 | ||||||||||||||||
% of Rest of World Services Gross Billings | 22.2 | % | 21.1 | % | 22.9 | % | 20.6 | % | 21.6 | % | |||||||||||
Gross Profit - Goods | 6,726 | 6,806 | 5,727 | 4,277 | 4,790 | ||||||||||||||||
% of Rest of World Goods Gross Billings | 11.2 | % | 11.2 | % | 13.2 | % | 11.1 | % | 13.4 | % | |||||||||||
Total Gross Profit | $ | 34,153 | $ | 29,735 | $ | 28,495 | $ | 26,256 | $ | 27,397 | |||||||||||
Year-over-year growth | (28 | ) | % | (23 | ) | % | (24 | ) | % | (28 | ) | % | (20 | ) | % | ||||||
% Third Party and Other | 99 | % | 99 | % | 100 | % | 99 | % | 100 | % | |||||||||||
% Direct | 1 | % | 1 | % | — | % | 1 | % | — | % | |||||||||||
% of Rest of World Total Gross Billings | 18.6 | % | 17.5 | % | 20.0 | % | 18.1 | % | 19.5 | % | |||||||||||
Consolidated Results of Operations: | |||||||||||||||||||||
Gross Billings: | |||||||||||||||||||||
Local Gross Billings | $ | 757,120 | $ | 812,029 | $ | 788,950 | $ | 792,310 | $ | 769,878 | |||||||||||
Travel Gross Billings | 197,426 | 174,594 | 184,519 | 180,568 | 175,324 | ||||||||||||||||
Gross Billings - Services | 954,546 | 986,623 | 973,469 | 972,878 | 945,202 | ||||||||||||||||
Gross Billings - Goods | 512,988 | 720,369 | 498,541 | 520,004 | 486,953 | ||||||||||||||||
Total Gross Billings | $ | 1,467,534 | $ | 1,706,992 | $ | 1,472,010 | $ | 1,492,882 | $ | 1,432,155 | |||||||||||
Year-over-year growth | (2 | ) | % | (1 | ) | % | (5 | ) | % | (2 | ) | % | (2 | ) | % | ||||||
Year-over-year growth, excluding FX | 6 | % | 4 | % | (3 | ) | % | (2 | ) | % | (2 | ) | % | ||||||||
% Third Party and Other | 74 | % | 66 | % | 73 | % | 71 | % | 71 | % | |||||||||||
% Direct | 26 | % | 34 | % | 27 | % | 29 | % | 29 | % | |||||||||||
Gross Billings TTM | $ | 6,273,217 | $ | 6,255,540 | $ | 6,175,549 | $ | 6,139,418 | $ | 6,104,039 | |||||||||||
Year-over-year growth | 3 | % | — | % | (1 | ) | % | (2 | ) | % | (3 | ) | % | ||||||||
Q3 2015 | Q4 2015 | Q1 2016 | Q2 2016 | Q3 2016 | |||||||||||||||||
Revenue: | |||||||||||||||||||||
Local Revenue | $ | 260,939 | $ | 279,655 | $ | 276,121 | $ | 267,216 | $ | 256,677 | |||||||||||
Travel Revenue | 41,090 | 35,169 | 37,141 | 36,431 | 39,182 | ||||||||||||||||
Revenue - Services | 302,029 | 314,824 | 313,262 | 303,647 | 295,859 | ||||||||||||||||
Revenue - Goods | 411,566 | 602,346 | 418,709 | 452,383 | 424,609 | ||||||||||||||||
Total Revenue | $ | 713,595 | $ | 917,170 | $ | 731,971 | $ | 756,030 | $ | 720,468 | |||||||||||
Year-over-year growth | — | % | 4 | % | (2 | ) | % | 2 | % | 1 | % | ||||||||||
Year-over-year growth, excluding FX | 7 | % | 9 | % | (1 | ) | % | 3 | % | 2 | % | ||||||||||
% Third Party and Other | 46 | % | 38 | % | 46 | % | 42 | % | 43 | % | |||||||||||
% Direct | 54 | % | 62 | % | 54 | % | 58 | % | 57 | % | |||||||||||
Revenue TTM | $ | 3,085,574 | $ | 3,119,516 | $ | 3,101,131 | $ | 3,118,766 | $ | 3,125,639 | |||||||||||
Year-over-year growth | 5 | % | 3 | % | 1 | % | — | % | 1 | % | |||||||||||
Gross Profit: | |||||||||||||||||||||
Local Gross Profit | $ | 227,654 | $ | 247,600 | $ | 241,052 | $ | 234,400 | $ | 225,985 | |||||||||||
% of Consolidated Local Gross Billings | 30.1 | % | 30.5 | % | 30.6 | % | 29.6 | % | 29.4 | % | |||||||||||
Travel Gross Profit | 34,826 | 29,979 | 29,924 | 29,358 | 33,101 | ||||||||||||||||
% of Consolidated Travel Gross Billings | 17.6 | % | 17.2 | % | 16.2 | % | 16.3 | % | 18.9 | % | |||||||||||
Gross Profit - Services | 262,480 | 277,579 | 270,976 | 263,758 | 259,086 | ||||||||||||||||
% of Consolidated Services Gross Billings | 27.5 | % | 28.1 | % | 27.8 | % | 27.1 | % | 27.4 | % | |||||||||||
Gross Profit - Goods | 66,432 | 94,161 | 68,352 | 69,830 | 55,031 | ||||||||||||||||
% of Consolidated Goods Gross Billings | 13.0 | % | 13.1 | % | 13.7 | % | 13.4 | % | 11.3 | % | |||||||||||
Total Gross Profit | $ | 328,912 | $ | 371,740 | $ | 339,328 | $ | 333,588 | $ | 314,117 | |||||||||||
Year-over-year growth | (7 | ) | % | (2 | ) | % | (2 | ) | % | (1 | ) | % | (4 | ) | % | ||||||
% Third Party and Other | 85 | % | 81 | % | 85 | % | 82 | % | 86 | % | |||||||||||
% Direct | 15 | % | 19 | % | 15 | % | 18 | % | 14 | % | |||||||||||
% of Total Consolidated Gross Billings | 22.4 | % | 21.8 | % | 23.1 | % | 22.3 | % | 21.9 | % | |||||||||||
Marketing | $ | 61,587 | $ | 83,208 | $ | 89,765 | $ | 91,993 | $ | 87,858 | |||||||||||
Selling, general and administrative | $ | 326,248 | $ | 287,976 | $ | 280,988 | $ | 277,168 | $ | 253,554 | |||||||||||
Income (loss) from continuing operations | $ | (24,613 | ) | $ | (32,552 | ) | $ | (45,596 | ) | $ | (51,731 | ) | $ | (35,792 | ) | ||||||
Adjusted EBITDA | $ | 56,334 | $ | 67,010 | $ | 31,348 | $ | 33,961 | $ | 32,134 | |||||||||||
% of Total Consolidated Gross Billings | 3.8 | % | 3.9 | % | 2.1 | % | 2.3 | % | 2.2 | % | |||||||||||
% of Total Consolidated Revenue | 7.9 | % | 7.3 | % | 4.3 | % | 4.5 | % | 4.5 | % | |||||||||||
Groupon, Inc.
Supplemental Financial Information and Business Metrics (9)(11)
(financial data in thousands; active customers in millions)
(unaudited)
Free cash flow is a non-GAAP financial measure. The following is a reconciliation of free cash flow to the most comparable U.S. GAAP financial measure, "Net cash provided by (used in) operating activities from continuing operations."
Q3 2015 (10) | Q4 2015 (10) | Q1 2016 | Q2 2016 | Q3 2016 | ||||||||||||||||
Net cash provided by (used in) operating activities from continuing operations | $ | (7,640 | ) | $ | 250,455 | $ | (76,725 | ) | $ | (54,010 | ) | $ | (40,822 | ) | ||||||
Purchases of property and equipment and capitalized software from continuing operations | (27,735 | ) | (15,507 | ) | (19,952 | ) | (16,395 | ) | (12,868 | ) | ||||||||||
Free cash flow | $ | (35,375 | ) | $ | 234,948 | $ | (96,677 | ) | $ | (70,405 | ) | $ | (53,690 | ) | ||||||
Net cash provided by (used in) operating activities from continuing operations (TTM) | $ | 325,971 | $ | 299,747 | $ | 179,415 | $ | 112,080 | $ | 78,898 | ||||||||||
Purchases of property and equipment and capitalized software from continuing operations (TTM) | (88,598 | ) | (83,988 | ) | (85,646 | ) | (79,589 | ) | (64,722 | ) | ||||||||||
Free cash flow (TTM) | $ | 237,373 | $ | 215,759 | $ | 93,769 | $ | 32,491 | $ | 14,176 | ||||||||||
Net cash provided by (used in) investing activities from continuing operations | $ | (98,028 | ) | $ | (31,238 | ) | $ | (20,778 | ) | $ | (18,853 | ) | $ | (12,088 | ) | |||||
Net cash provided by (used in) financing activities | $ | (14,793 | ) | $ | (323,597 | ) | $ | (78,015 | ) | $ | 169,225 | $ | (38,342 | ) | ||||||
Net cash provided by (used in) investing activities from continuing operations (TTM) | $ | (181,187 | ) | $ | (177,250 | ) | $ | (178,585 | ) | $ | (168,897 | ) | $ | (82,957 | ) | |||||
Net cash provided by (used in) financing activities (TTM) | $ | (216,683 | ) | $ | (515,785 | ) | $ | (557,962 | ) | $ | (247,180 | ) | $ | (270,729 | ) | |||||
Other Metrics: | ||||||||||||||||||||
Active Customers (6) | ||||||||||||||||||||
North America | 25.2 | 25.9 | 26.9 | 27.9 | 29.1 | |||||||||||||||
EMEA | 15.4 | 15.4 | 15.3 | 15.3 | 15.4 | |||||||||||||||
Rest of World | 8.0 | 7.6 | 7.2 | 6.8 | 6.3 | |||||||||||||||
Total Active Customers | 48.6 | 48.9 | 49.4 | 50.0 | 50.8 | |||||||||||||||
TTM Gross Billings / Average Active Customer (7) | ||||||||||||||||||||
North America | $ | 148 | $ | 149 | $ | 146 | $ | 145 | $ | 142 | ||||||||||
EMEA | 123 | 117 | 113 | 109 | 106 | |||||||||||||||
Rest of World | 99 | 96 | 90 | 86 | 84 | |||||||||||||||
Consolidated | 132 | 130 | 127 | 125 | 123 | |||||||||||||||
Global headcount as of September 30, 2016 and 2015 was as follows:
Q3 2015 | Q3 2016 | ||
Sales (8) | 4,168 | 3,285 | |
% North America | 33% | 34% | |
% EMEA | 42% | 43% | |
% Rest of World | 25% | 23% | |
Other | 6,301 | 5,089 | |
Total Headcount | 10,469 | 8,374 | |
(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 and commission revenue, are also included within the Local category. |
(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 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 exclude Ticket Monster, which has been classified as discontinued operations. The Company sold a controlling stake in Ticket Monster in May 2015. |
(10) | The Company adopted the guidance in ASU 2016-09 on January 1, 2016. ASU 2016-09 requires that all income tax-related cash flows resulting from share-based payments be reported as operating activities in the statement of cash flows. Previously, income tax benefits at settlement of an award were reported as a reduction to operating cash flows and an increase to financing cash flows to the extent that those benefits exceeded the income tax benefits reported in earnings during the award's vesting period. The Company has elected to apply that change in cash flow classification on a retrospective basis, which has resulted in adjustments to net cash provided by (used in) operating activities, net cash used in financing activities, and free cash flow for the three-month and trailing twelve-month periods ended September 30, 2015 and December 31, 2015. |
(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. |