Why Groupon Can Soar Like Priceline.com
Kevin Kuo • 66 Comments
Kevin Kuo • 66 Comments
Thu, Apr. 28, 4:29 PM
- Groupon (GRPN -4.1%) has moved up 3.9% after its Q1 beat expectations for revenue and the company raised EBITDA guidance for 2016.
- EBITDA came to $31.3M, easily surpassing expectations for $22.1M.
- Gross billings were $1.47B -- down 5% Y/Y, and down 3% excluding exchange-rate effects. On forex-neutral basis, billings were up 5% in North America, but down 12% in EMEA and 17% in Rest of World. Groupon says the billings drop is in part due to de-emphasizing low-margin Shopping offerings.
- Global units (vouchers and products sold before cancellations and returns) fell 3% to 52M as international restructuring continued. North America was up 6%, though.
- It maintained guidance on full-year revenues ($2.75B-$3.05B, in line with expectations) but raised expected EBITDA to $85M-$135M (vs. $110M expected). Those assumptions are based on "expected marketing investments, continued progress on increasing Shopping margins, and a reduction of our international footprint."
- The company today named Mike Randolfi its new permanent chief financial officer; he's taking over for interim CFO Brian Kayman.
- Conference call to come at 5 p.m. ET.
- Press Release
Thu, Apr. 28, 4:08 PM
Wed, Apr. 27, 5:35 PM
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Thu, Feb. 11, 7:23 PM
- Having gone into earnings just $0.09 above a 52-week low of $2.15, Groupon (NASDAQ:GRPN) has jumped to $2.63 after handily beating Q4 estimates, hiking its 2016 adjusted EBITDA guidance, and reiterating its 2016 revenue guidance.
- Boosting Q4 EPS: $112.5M was spent to buy back 35.5M shares. $192.9M was spent on buybacks in Q3.
- Billings: Gross billings fell 1% Y/Y in Q4 to $1.71B (+4% exc. forex), after having dropped 2% in Q3. With revenue rising 3.8% excluding the impact of the TMON divestiture, take rate rose. North American billings remained strong, rising 10.7% Y/Y to $1.05B. EMEA billings -13.1% to $487.1M; Rest of World -21.4% to $169.5M.
- Segment performance/metrics: Local (daily deals) billings -4% Y/Y to $812M; revenue -6% to $279.7M. Goods (e-commerce) billings +4% to $720.4M; revenue +10% to $602.3M. Travel billings -6% to $174.6M; revenue -10% to $35.2M.
- Metrics: Units sold were roughly flat Y/Y at 62M. Active customers rose by 0.3M Q/Q and 1.5M Y/Y to 48.9M. Trailing 12 month customer spend fell by $2 Q/Q and $7 Y/Y to $130.
- Financials: With a mix shift towards Goods weighing, GAAP gross profit fell 2% Y/Y in spite of 4% revenue growth. Operating expenses rose 9% Y/Y to $377.2M, thanks to $5.4M in restructuring charges and a a 39% increase in marketing spend to $83.2M. 2015 free cash flow was $208.1M, up from $168.9M in 2014. Groupon ended 2015 with $853.4M in cash and no debt.
- CEO Rich Williams, three months removed from taking over the top job: "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."
- Groupon's results/guidance, earnings release, slides (.pdf)
Thu, Feb. 11, 4:14 PM
- Groupon (NASDAQ:GRPN): Q4 EPS of $0.04 beats by $0.04.
- Revenue of $917.2M (-0.9% Y/Y, +4% if adjusted for the TMON divestiture) beats by $71.3M.
- Continues to expect 2016 revenue of $2.75B-$3.05B vs. a $2.97B consensus. 2016 adjusted EBITDA guidance hiked to $80M-$130M.
- Shares +20.5% after hours.
- Press Release
Wed, Feb. 10, 5:35 PM
Nov. 3, 2015, 4:57 PM
- "I'm assuming the CEO role with three immediate priorities," says Rich Williams. "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." The remarks suggest Groupon plans to follow up on its September layoffs with more job cuts.
- Groupon's (NASDAQ:GRPN) Q3 numbers suggest Williams has plenty of work to do. Gross billings fell 2% Y/Y to $1.47B (they were up 6% excluding forex), after rising 2% in Q2. With revenue nearly flat after adjusting for the TMON sale, take rate improved modestly. North American billings +12.3% to $869.2M, EMEA -15.3% to $414.5M, rest of world -18.9% to $183.8M.
- Segment performance: Local billings (daily deals-driven) -4% Y/Y to $757.1M; Local revenue -10% to $260.9M (lower Local take rate). Goods billings +2% to $513M; Goods revenue +8% to $411.6M (higher Goods take rate). Travel billings -1% to $197.4M; Travel revenue -2% to $41.1M.
- Financials: Buybacks boosted Q3 EPS: $192.9M was spent to repurchase 44.1M shares. Gross margin (hurt by shift from Local to Goods) fell to 46.1% from 49.7% a year ago. Excluding a one-time gain, GAAP operating expenses rose 17% to $413M. Groupon ended Q3 with $963.6M in cash, and $195M in credit facility borrowings.
- Shares are still halted.
- Q3 results, PR
Nov. 3, 2015, 4:12 PM
- Groupon (NASDAQ:GRPN): Q3 EPS of $0.05 beats by $0.03.
- Revenue of $713.6M (-5.7% Y/Y) misses by $19.14M.
- Expects Q4 revenue of $815M-$865M and EPS of -$0.01 to $0.01, below a consensus of $956.8M and $0.07.
- Eric Lefkofsky steps down as CEO. COO Rich Williams is the new CEO. Lefkofsky will serve as chairman, replacing Ted Leonsis, who will now serve as lead independent director.
- Shares are halted.
Nov. 2, 2015, 5:35 PM
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Aug. 7, 2015, 9:37 AM
- In addition to missing Q2 estimates, Groupon (NASDAQ:GRPN) is guiding for Q3 revenue of $700M-$750M and EPS of $0.00-$0.02, below a consensus of $755.9M and $0.03.
- Full-year sales guidance of $3.15B-$3.3B is reiterated (consensus is at $3.21B), but adjusted EBITDA guidance has been cut to $290M from "greater than" $315M. Forex is now expected to have a 600 bps impact on 2015 revenue growth vs. a prior forecast of 700 bps.
- Billings: Gross billings rose 2% Y/Y in Q2 to $1.53B (+10% exc. forex), on par with Q1's growth rate and slightly below revenue growth of 3%. North American billings +12.2% to $896.3M; revenue +13.5%. EMEA -10.3% to $433.5M (+8.7% exc. forex); revenue -10.4%. Rest of World -9.4% to $199.2M (+5.6% exc. forex); revenue -17.8%. The figure imply a moderate increase in North American take rates, and a large drop in Rest of World take rates.
- Segment performance: Local billings (daily deals-driven) -0.4% to $798.3M. Goods billings (e-commerce-driven) +4.8% to $536.9M, with a 15.7% increase in direct billings offsetting a 17.4% drop in 3rd-party billings. Travel billings +2.9% to $193.7M. With local revenue (higher-margin) dropping 7% to $276.5M in spite of nearly flat billings, local take rates remained under pressure. On the other hand, Goods revenue rose 11% to $420.5M, implying a higher take rate. Travel revenue rose 3% to $41.4M.
- Metrics: Units rose 7% Y/Y to 53M; North America +9%, EMEA +10%; Rest of World (affected by the TMON sale) -3%. Active deals rose by ~85K Q/Q to nearly 510K, thanks to the addition of 75K coupons. Active customers +6% Y/Y to 48.6M. Trailing 12 month customer spend fell $2 Q/Q and $3 Y/Y to $133.
- Financials: Cost controls helped EPS stay positive: Operating expenses were fell 5% Y/Y at $346.2M. Also helping: $122.7M was spent to buy back 19.3M shares. Free cash flow for the trailing 12 months is $266.8M. Groupon ended Q2 with $1.1B in cash/equivalents, and no debt.
- Shares have made new 52-week lows.
- Q2 results, PR
Aug. 7, 2015, 7:35 AM
- Groupon (NASDAQ:GRPN): Q2 EPS of $0.02 misses by $0.01.
- Revenue of $738.4M (+3.1% Y/Y) misses by $1.85M.
Aug. 6, 2015, 5:30 PM
May 6, 2015, 3:59 PM
- The difference between Groupon's (NASDAQ:GRPN) Q1 North American Local (deals) billings growth (+12% Y/Y to $512.6M) and revenue growth (+2% to $180.8M) is receiving much scrutiny as shares fall to new 2015 lows post-earnings.
- Morgan Stanley (Equal-weight) observes commission rate concessions to merchants and customer couponing are hurting NA Local take rates. At the same time, it adds management is still aiming for 20%+ Y/Y NA Local billings growth.
- Credit Suisse (Neutral) notes take rates were hurt by order discounts meant to drive traffic/sales growth. The firm could become more positive on Groupon if it sees a greater "focus on improved demand generation against the supply base it has already assembled: 1) greater traction in the local segment through mobile offerings and Page product, 2) greater consumer engagement and adoption as company's Pull initiatives gain traction, 3) margin expansion in the goods business through logistics optimization."
- On the CC (transcript), CFO Jason Child defending Groupon's discounting. "While dilutive to margin in the short-term order discounts are an important means of driving traffic, awareness and at the end of the day transactions. Our goal is to ultimately maximize gross profit dollars ... take rates are likely to remain around the 35% level as we make continued investments in quality and growth but if we need to trade up margin at times to accelerate growth we may do so."
- CEO Eric Lefkofsky reiterated Groupon's commitment to growing search-derived traffic. He also declared the company is now focused on growing e-mail-driven revenue after stabilizing traffic (previously hurt by Google's creation of a Gmail Promotions tab).
- Q1 results, details
May 5, 2015, 6:02 PM
- With Groupon (NASDAQ:GRPN) receiving 42% of its gross billings from outside of North America, a strong dollar had a big impact in Q1: Revenue was up 3% Y/Y in actual dollars, and 10% excluding forex. Likewise, billings rose 2% in actual dollars to $1.55B, and 10% excluding forex. Forex is expected to have 700 bps impact on 2015 sales growth.
- In addition to offering light Q2 guidance, Groupon is forecasting full-year revenue of $3.15B-$3.3B, below a $3.51B consensus. However, both outlooks exclude Ticket Monster, which Groupon is set to sell a controlling stake in. Though missing consensus, Q1 sales of $750.4M met a revised guidance range (set on April 20) of $720M-$770M provided with the Ticket Monster announcement.
- Local billings (daily deals-driven) -0.2% Y/Y to $829.9M. Goods billings +4.4% to $527.4M. Travel billings +6.1% to $194.7M.
- The continuing mix shift towards goods led gross margin to fall 390 bps Y/Y to 46.3%. Lifting EPS: GAAP operating expenses fell 9% Y/Y to $342.1M. $18.5M was spent on buybacks.
- Geographic performance: North American billings +14% to $894M; revenue +11% to $479.9M. EMEA billings -11% to $459.2M (+7% exc. forex); revenue -6% to $216.2M. Rest of World billings -12% to $198.8M (-1% exc. forex); revenue -18% to $54.3M.
- Other stats: Units sold +6% Y/Y to 54M. Active deals rose to 425K from 370K in Q4, thanks to the addition of nearly 60K coupons. Active customers +7% Y/Y to 48.1M. Trailing 12 month billings per active customer fell to $135 from $155 as of Q4. 27% of North American transactions were search-related. Groupon ended Q1 with $975.5M in cash.
- Shares have fallen to $6.70 AH.
- Q1 results, PR
May 5, 2015, 4:12 PM
- Groupon (NASDAQ:GRPN): Q1 EPS of $0.03 beats by $0.02.
- Revenue of $750.4M misses by $61.79M.
- Expects Q2 revenue of $700M-$750M and EPS of $0.01-$0.03, mostly below a consensus of $826.7M and $0.03.
- Shares -0.4% AH.
- Update: Though officially missing consensus, Q1 revenue was in-line with a revised guidance range of $720M-$770M provided by Groupon on April 20. The revised guidance and official results exclude Ticket Monster, which Groupon is about to sell a controlling stake in, as does Groupon's Q2/2015 revenue guidance.
Groupon, Inc. is a local commerce marketplace that connects merchants to consumers by offering goods and services at a discount. The company operates through three segments: North America, EMEA, which is comprised of Europe, Middle East and Africa, and the remainder of the Company's... More
Industry: Internet Information Providers
Country: United States
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