Groupon's billings growth improves, but spending pressures EPS

|By:, SA News Editor

Groupon (GRPN) expects Q2 revenue of $725M-$775M and EPS of $0.00-$0.02 vs. a consensus of $754.4M and $0.03. Adjusted EBITDA is expected to rise to $45M-$65M from a Q1 level of $40.3M (down from $71.9M a year ago).

Gross billings rose 29% Y/Y in Q1 to $1.82B, an improvement from Q4's 5% clip. North American revenue rose 26.9% to $431M, EMEA 25.6% to $230.9M, and rest of world +22.6% to $95.7M.

Gross margin, pressured lately by a mix shift towards Goods/e-commerce sales, came in at 50.9%, +170 bps Q/Q but -1210 bps Y/Y. SG&A spend rose 5% Y/Y to $325M, and marketing spend a hefty 59% to $78.9M (affected EPS and EBITDA). $29.5M was spent on buybacks.

Local revenue (daily deals-dominated) rose fractionally Y/Y to $330.2M. Goods revenue (e-commerce-dominated) rose 68% to $386.2M. Travel revenue fell 3% to $41.3M.

Active customers (a customer in the last 12 months) rose 15% Q/Q and 24% Y/Y to 51.8M. Units sold rose 50% Q/Q and 85% Y/Y to 84M. Active deals totaled 200K+, up from 140K+ at the end of Q4. Mobile accounted for 54% of transactions, and search generated 9% of North American transactions. GRPN -4% AH. Q1 results, PR