Core Viewpoint - Groupon has experienced a significant increase in stock performance, returning +41.1% over the past month, outperforming the S&P 500's +4.2% and the Internet - Commerce industry’s +3.5% [1] Earnings Estimates - For the current quarter, Groupon is expected to report a loss of $0.16 per share, a decrease of -60% year-over-year, with the consensus estimate remaining unchanged [3] - The consensus earnings estimate for the current fiscal year is $0.05, reflecting a year-over-year increase of +109.6%, also unchanged over the last 30 days [3] - For the next fiscal year, the consensus estimate is $0.33, indicating a substantial increase of +560% compared to the previous year, with no changes in the estimate over the past month [3] Revenue Growth - The consensus sales estimate for the current quarter is $123.83 million, showing a year-over-year decline of -4.1% [6] - The sales estimates for the current and next fiscal years are $539.26 million and $579.85 million, indicating increases of +4.7% and +7.5%, respectively [6] Recent Performance - Groupon reported revenues of $123.08 million in the last quarter, a year-over-year increase of +1.2%, and an EPS of $0.06 compared to -$0.65 a year ago [7] - The reported revenues exceeded the Zacks Consensus Estimate of $118.37 million by +3.98%, and the EPS surprise was +133.33% [7] - The company has consistently beaten consensus EPS estimates in the last four quarters and topped revenue estimates three times during this period [7] Valuation - Groupon's valuation is assessed through various multiples, including price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to determine if the stock is fairly valued [8] - The Zacks Value Style Score grades Groupon as C, indicating it is trading at par with its peers [10] Market Outlook - The Zacks Rank 1 (Strong Buy) for Groupon suggests potential for outperforming the broader market in the near term [11]

Stock Performance - Groupon's stock has returned +68.9% over the past month, significantly outperforming the Zacks S&P 500 composite's +5% change and the Zacks Internet - Commerce industry's +5.5% gain [1] Earnings Estimates - Current quarter earnings estimate is a loss of $0.16 per share, representing a year-over-year change of -60% [2] - Current fiscal year consensus earnings estimate is $0.05, indicating a year-over-year change of +109.6% [3] - Next fiscal year consensus earnings estimate is $0.33, showing a year-over-year change of +560% [3] - Zacks Rank 1 (Strong Buy) assigned to Groupon based on earnings estimate revisions [3] Revenue Estimates - Current quarter consensus sales estimate is $123.83 million, representing a year-over-year change of -4.1% [5] - Current fiscal year revenue estimate is $539.26 million, indicating a year-over-year change of +4.7% [5] - Next fiscal year revenue estimate is $579.85 million, showing a year-over-year change of +7.5% [5] Recent Financial Performance - Last reported quarter revenues were $123.08 million, representing a year-over-year change of +1.2% [6] - Last reported quarter EPS was $0.06, compared to -$0.65 a year ago [6] - Revenue surprise of +3.98% compared to Zacks Consensus Estimate of $118.37 million [6] - EPS surprise of +133.33% in the last reported quarter [6] - Company has beaten consensus EPS estimates in each of the trailing four quarters [6] - Company has topped consensus revenue estimates three times over the last four quarters [6] Valuation - Groupon is graded C on the Zacks Value Style Score, indicating it is trading at par with its peers [9] - Valuation metrics suggest the stock is fairly valued compared to its peers [9]

Groupon stock could be a turnaround in the making.Groupon (GRPN 27.43%) -- remember Groupon? It's apparently still a thing -- reported earnings last night, and investors are cheering the results. Shares of the online coupon site soared 22.2% through 10:20 a.m. ET Friday after the company missed on earnings, but beat on sales.The question is why.Heading into the Q1 2024 report, analysts forecast Groupon would earn $0.05 per share on sales of $121.6 million. As it turned out, sales were better than expected a ...

Core Insights - Groupon reported non-GAAP earnings of 6 cents per share for Q1 2024, surpassing the Zacks Consensus Estimate of a loss of 18 cents per share, compared to a non-GAAP loss of 65 cents per share in the same quarter last year [1] - Revenues reached $123.1 million, exceeding the consensus estimate by 4% and showing a 1% year-over-year increase [1] Revenue Breakdown - North America revenues were $94.1 million, beating the consensus by 10.7% and increasing 5.5% year-over-year [1] - International revenues totaled $28.95 million, missing the consensus by 4.1% and declining 10.5% year-over-year [1] - Local revenues amounted to $111.2 million, exceeding estimates by 6.4% and rising 4.3% year-over-year [2] - Consolidated Travel revenues were $6.4 million, beating estimates by 32.6% and increasing 12.3% year-over-year [2] - Goods revenues were $5.5 million, missing estimates by 7.5% and declining 40.7% year-over-year [2] Customer Metrics - Groupon had approximately 16.1 million active customers at the end of Q1, down from 18.2 million year-over-year but beating the consensus estimate by 4.6% [3] - North America active customers were approximately 10.2 million, exceeding the consensus by 11.4%, while international active customers were 5.9 million, missing the consensus by 5.3% [3] Operating Performance - Gross profit for Q1 was $110.6 million, up 6% year-over-year [4] - Selling, general and administrative expenses decreased by 26.9% to $74.3 million, while marketing expenses rose by 15.9% to $28.8 million [4] - The company reported a GAAP operating income of $7.4 million, a significant improvement from a loss of $30.6 million in the previous year [4] Financial Position - Groupon ended the quarter with cash and cash equivalents of $158.7 million, up from $141.6 million at the end of 2023 [5] - The operating cash outflow was $10.1 million, compared to an operating cash flow of $54.5 million in the prior quarter [5] - Free cash outflow was $13.8 million, down from $51.1 million of free cash flow in the previous quarter [5] Guidance - For Q2 2024, Groupon expects revenues between $116 million and $122 million, indicating a year-over-year decline of 10-5% [6] - Adjusted EBITDA is projected to be between $12 million and $17 million [6] - For the full year 2024, revenues are expected to be between $489 million and $515 million, reflecting a year-over-year change of (5%)-0% [6] - Adjusted EBITDA for 2024 is anticipated to be between $80 million and $100 million, with a positive free cash flow expected for the year [6]

Groupon 1st Quarter Earnings May 9th, 2024 Agenda Dusan Senkypl CEO ● CEO Commentary ● Financial Overview Jiri Ponrt ● Guidance CFO ● Q&A Rana Kashyap SVP, Corp Dev & IR ...

Financial Data and Key Metrics Changes - In Q1 2024, Groupon reported global billings of $381 million, a decrease of approximately 4% year-over-year, while revenue increased by 1% year-over-year to $123 million, exceeding guidance [27][28] - Adjusted EBITDA was positive $20 million, marking the fourth consecutive quarter of positive adjusted EBITDA, with the last twelve months adjusted EBITDA reaching $80 million, a $93 million increase from the previous year [28][29] - The company ended the quarter with $159 million in cash and cash equivalents, excluding $30 million of restricted cash [29] Business Line Data and Key Metrics Changes - North America Local and Travel categories saw a combined revenue increase of 8% year-over-year, representing 74% of total business in Q1 [7][8] - Consolidated local billings were $316 million, flat compared to the prior year, with North America local billings up 4% year-over-year [30] - The Travel category experienced consolidated billings of $36 million, up 2% year-over-year, with North America travel billing growth of 30% year-over-year [30] Market Data and Key Metrics Changes - Active customers worldwide totaled approximately 16 million, down 0.4 million from the prior quarter, with a slight decline in North America [29] - International local billings were down 9% year-over-year, indicating challenges in that segment [30] Company Strategy and Development Direction - The company is focused on a transformation plan aimed at stabilizing revenue and driving profitable growth, with an emphasis on improving customer and merchant experiences [8][18] - Groupon is shifting from quantity to quality by removing low-quality deals and enhancing deal content using AI [19] - The company aims to increase the number of bookable deals, particularly in the Travel category, to improve customer experience and drive sales [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transformation plan, noting that while challenges remain, there is a positive trajectory towards sustained growth [17][21] - The company anticipates that technical issues affecting performance will be resolved, with expectations for revenue growth in the second half of 2024 [37] - Management reiterated the importance of building a motivated performance-driven team to achieve long-term goals [22][26] Other Important Information - Groupon has taken steps to improve liquidity, including the sale of non-core assets and a successful rights offering [34] - The company is facing a tax assessment issue in Italy, which has temporarily paused local voucher sales in that market [35] Q&A Session Summary Question: Progress on increasing frequency of Groupon as a gift and making the platform more merchant-friendly - Management highlighted improvements in merchant dashboards to enhance visibility on promotional activities, which were previously lacking [40] - Focus remains on enhancing gifting options for the upcoming Q4 season [41] Question: Disparity between North America and international travel performance - Management noted better connectivity in North America as a key factor, with plans to implement improvements in international markets [44] Question: Incremental investments for platform growth - Management emphasized the need to focus on quality merchants and improving deal structures rather than increasing the number of merchants [48] - Competitive advantages include a performance-based model where merchants pay only for delivered customers [50]

Company Performance - Groupon reported quarterly earnings of $0.06 per share, exceeding the Zacks Consensus Estimate of a loss of $0.18 per share, and showing improvement from a loss of $0.65 per share a year ago, resulting in an earnings surprise of 133.33% [1] - The company generated revenues of $123.08 million for the quarter ended March 2024, surpassing the Zacks Consensus Estimate by 3.98% and showing an increase from $121.61 million in the same quarter last year [1] - Over the last four quarters, Groupon has consistently surpassed consensus EPS estimates four times and revenue estimates three times [1] Future Outlook - The sustainability of Groupon's stock price movement will largely depend on management's commentary during the earnings call and the company's earnings outlook [2][3] - Current consensus EPS estimate for the upcoming quarter is -$0.16 on revenues of $125.14 million, while for the current fiscal year, the estimate is $0.05 on revenues of $528.77 million [4] - The estimate revisions trend for Groupon is currently favorable, resulting in a Zacks Rank 1 (Strong Buy), indicating expectations for the stock to outperform the market in the near future [4] Industry Context - The Internet - Commerce industry, to which Groupon belongs, is currently ranked in the top 28% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [5] - Empirical research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1, highlighting the potential for growth in this industry [5]

Core Insights - Consumers are increasing spending on travel and local experiences while reducing purchases of retail products [1][2] - Groupon's North American segment, excluding the Goods business, experienced an 8% year-over-year growth, while gross billings from Goods declined by 36% [1] - The company is focusing on enhancing local experiences and services under the leadership of newly appointed CEO Dusan Senkypl [2] Financial Performance - Gross billings for local experiences in North America rose by 4%, and travel gross billings increased by 3% [2] - Groupon reported four consecutive quarters of positive Adjusted EBITDA, indicating a stabilization in topline performance [2] Consumer Behavior Trends - A significant portion of consumers, particularly across income levels, are cutting back on nonessential spending due to rising retail product prices [1] - There is a generational trend where younger consumers allocate more income towards recreation, leisure, and entertainment activities [3] Strategic Initiatives - Groupon is leveraging digital innovations to enhance consumer experience, including fraud prevention, improved search capabilities, and the use of artificial intelligence to enhance deal quality [3] - The company is actively removing low-quality deals and helping quality merchants curate their offerings to drive demand [3]

Q1 2024 Financial Highlights & Management Commentary [First Quarter 2024 Highlights](index=1&type=section&id=First%20Quarter%202024%20Highlights) Groupon reported Q1 2024 results that surpassed the high-end of its guidance, marking the first consolidated revenue growth since 2016, while achieving its fourth consecutive quarter of positive Adjusted EBITDA and significantly narrowing its net loss Q1 2024 Key Financial Metrics | Metric | Value (USD) | | :--- | :--- | | Global Revenue | $123.1 million | | Global Billings | $381.1 million | | Net Loss | $11.5 million | | Adjusted EBITDA | $19.5 million | | Quarter-End Cash | $158.7 million | - The company reported its first consolidated revenue growth since **2016**[1](index=1&type=chunk)[2](index=2&type=chunk) - Dusan Senkypl has been named the permanent Chief Executive Officer[1](index=1&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Dusan Senkypl highlighted the solid start to the year, with results exceeding guidance and a return to consolidated revenue growth, expressing confidence in restarting growth and establishing Groupon as a key destination for local experiences, while acknowledging that the business is not yet operating at full capacity - CEO Dusan Senkypl stated, "Our business is back on its feet and momentum is in the right direction, but not yet firing on all cylinders"[2](index=2&type=chunk) - The company's mission is to become the "ultimate destination for local experiences and services"[2](index=2&type=chunk) Detailed Financial Performance [Consolidated Performance](index=1&type=section&id=Consolidated%20Performance) Consolidated revenue for Q1 2024 increased by 1% year-over-year to $123.1 million, driven by a 4% rise in Local revenue, with gross profit growing 6% to $110.6 million, and profitability improving significantly as net loss narrowed to $11.5 million from $28.6 million, and Adjusted EBITDA turned positive at $19.5 million compared to a loss of $4.9 million in the prior year, aided by a substantial reduction in SG&A expenses Q1 2024 Consolidated Results vs. Q1 2023 (YoY) | Metric | Q1 2024 (USD) | Q1 2023 (USD) | Change | | :--- | :--- | :--- | :--- | | Revenue | $123.1 million | $121.6 million | +1% | | Gross Profit | $110.6 million | $104.7 million | +6% | | SG&A | $74.3 million | $101.6 million | -27% | | Net Loss | -$11.5 million | -$28.6 million | +59.8% | | Adjusted EBITDA | $19.5 million | -$4.9 million | N/A | - The decrease in SG&A was primarily driven by a reduction in payroll costs[3](index=3&type=chunk) - Operating cash outflow was **$10.1 million**, and free cash flow was negative **$13.8 million**[4](index=4&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) The North America segment drove the company's growth with a 6% revenue increase, while the International segment saw an 11% revenue decline, with active customers decreasing in both segments, showing a more pronounced 19% drop internationally [North America](index=2&type=section&id=North%20America) The North America segment reported a 6% increase in revenue to $94.1 million, primarily driven by strong demand in the Travel category, with revenue excluding Goods growing by 8%, and gross profit increasing by 11% to $84.1 million, despite active customers declining by 6% year-over-year to 10.2 million North America Q1 2024 Performance (YoY) | Metric | Q1 2024 | Change (YoY) | | :--- | :--- | :--- | | Revenue | $94.1 million | +6% | | Revenue (ex-Goods) | $91.1 million | +8% | | Gross Profit | $84.1 million | +11% | | Active Customers | 10.2 million | -6% | - The revenue increase was primarily due to higher demand in the Travel category and favorable refund rates in the Local category[5](index=5&type=chunk) [International](index=2&type=section&id=International) The International segment faced challenges, with revenue declining 11% (12% FX-neutral) to $29.0 million due to decreased demand across all categories, gross profit falling 8% to $26.4 million, and the active customer base seeing a significant contraction, falling 19% year-over-year to 5.9 million International Q1 2024 Performance (YoY) | Metric | Q1 2024 | Change (YoY) | Change (FX-Neutral) | | :--- | :--- | :--- | :--- | | Revenue | $29.0 million | -11% | -12% | | Gross Profit | $26.4 million | -8% | -10% | | Active Customers | 5.9 million | -19% | N/A | - The decrease in revenue is primarily attributable to an overall decline in demand for Local, Goods, and Travel categories[6](index=6&type=chunk) Key Operating Metrics [Customer and Unit Trends](index=12&type=section&id=Customer%20and%20Unit%20Trends) Total active customers continued to decline, reaching 16.1 million in Q1 2024, down from 18.2 million in the prior year, with the decline observed in both North America (down to 10.2 million) and International (down to 5.9 million) segments, and consolidated units sold also decreasing year-over-year from 10.5 million to 9.1 million Active Customers (in millions) | Region | Q1 2024 | Q1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | North America | 10.2 | 10.9 | -6.4% | | International | 5.9 | 7.3 | -19.2% | | **Total** | **16.1** | **18.2** | **-11.5%** | Consolidated Units Sold (in thousands) | Category | Q1 2024 | Q1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Local | 7,990 | 8,470 | -5.7% | | Goods | 978 | 1,819 | -46.2% | | Travel | 157 | 170 | -7.6% | | **Total** | **9,125** | **10,459** | **-12.8%** | [Headcount](index=12&type=section&id=Headcount) The company continued to reduce its workforce, with total headcount decreasing to 2,058 in Q1 2024 from 2,778 in Q1 2023, representing a 26% year-over-year reduction, and the sales team was reduced to 628 employees from 746 a year prior Headcount Trend | Category | Q1 2024 | Q1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Sales | 628 | 746 | -15.8% | | Other | 1,430 | 2,032 | -29.6% | | **Total** | **2,058** | **2,778** | **-25.9%** | Financial Statements [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the first quarter of 2024, Groupon reported revenue of $123.1 million, a slight increase from $121.6 million in the prior-year period, with gross profit improving to $110.6 million, and a significant reduction in operating expenses, particularly SG&A, leading to income from operations of $7.4 million, a strong turnaround from an operating loss of $30.6 million in Q1 2023, resulting in a net loss attributable to Groupon, Inc. of $12.3 million, or ($0.33) per share, a notable improvement from a net loss of $29.1 million, or ($0.95) per share, a year ago Q1 2024 Statement of Operations (in thousands USD, except per share data) | Line Item | Three Months Ended Mar 31, 2024 | Three Months Ended Mar 31, 2023 | | :--- | :--- | :--- | | Revenue | $123,084 | $121,611 | | Gross Profit | $110,557 | $104,711 | | Total Operating Expenses | $103,187 | $135,276 | | Income (Loss) from Operations | $7,370 | $(30,565) | | Net Loss Attributable to Groupon, Inc. | $(12,271) | $(29,147) | | Diluted Net Loss Per Share | $(0.33) | $(0.95) | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, Groupon's balance sheet showed total assets of $580.5 million and total liabilities of $539.1 million, with cash and cash equivalents standing at $158.7 million, an increase from $141.6 million at the end of 2023, and total equity turning positive to $41.4 million from a deficit of $40.3 million at year-end 2023, primarily due to an increase in additional paid-in capital Balance Sheet Summary (in thousands USD) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $158,717 | $141,563 | | Total current assets | $276,896 | $255,583 | | Total assets | $580,526 | $570,956 | | Total current liabilities | $297,306 | $369,154 | | Total liabilities | $539,101 | $611,268 | | Total equity (deficit) | $41,425 | $(40,312) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In the first quarter of 2024, Groupon used $10.1 million in cash from operating activities, a significant improvement from the $76.3 million used in the same period last year, with investing activities using $3.9 million, and financing activities providing $35.3 million in cash, largely due to $79.6 million in net proceeds from a Rights Offering, which offset the repayment of borrowings, resulting in a net increase in cash of $20.8 million for the quarter Q1 2024 Cash Flow Summary (in thousands USD) | Cash Flow Category | Three Months Ended Mar 31, 2024 | Three Months Ended Mar 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(10,111) | $(76,320) | | Net cash used in investing activities | $(3,931) | $(9,013) | | Net cash provided by (used in) financing activities | $35,341 | $(29,197) | | **Net increase (decrease) in cash** | **$20,805** | **$(114,678)** | - Financing activities included **$79.6 million** in proceeds from a Rights Offering, net of issuance costs[26](index=26&type=chunk) Non-GAAP Financial Measures & Reconciliations [Explanation of Non-GAAP Measures](index=2&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Groupon utilizes several non-GAAP financial measures, including Adjusted EBITDA and free cash flow, to provide investors with management's perspective on the company's core operating performance, excluding items such as stock-based compensation, depreciation and amortization, certain non-operating items, and special charges like restructuring costs, believing these metrics facilitate historical and peer comparisons but are not a substitute for U.S. GAAP reporting - Key non-GAAP measures provided include Foreign currency exchange rate neutral operating results, Adjusted EBITDA, and free cash flow[8](index=8&type=chunk)[9](index=9&type=chunk) - Adjusted EBITDA is defined as Net income (loss) excluding income taxes, interest, depreciation and amortization, stock-based compensation, and other special charges[12](index=12&type=chunk) - Free cash flow is defined as Net cash from operating activities less purchases of property, equipment, and capitalized software[15](index=15&type=chunk) [Adjusted EBITDA Reconciliation](index=14&type=section&id=Adjusted%20EBITDA%20Reconciliation) For Q1 2024, Groupon reported a positive Adjusted EBITDA of $19.5 million, reconciled from a net loss of $11.5 million by adding back items such as stock-based compensation ($2.4 million), depreciation & amortization ($9.7 million), net other expense ($12.7 million), and provision for income taxes ($6.2 million), marking a significant improvement from the negative $4.9 million Adjusted EBITDA in Q1 2023 Reconciliation of Net Loss to Adjusted EBITDA (in thousands USD) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net income (loss) | $(11,506) | $(28,613) | | Stock-based compensation | 2,374 | 2,363 | | Depreciation and amortization | 9,677 | 14,505 | | Restructuring and related charges | 96 | 8,794 | | Other (income) expense, net | 12,682 | (3,070) | | Provision for income taxes | 6,194 | 1,118 | | **Adjusted EBITDA** | **$19,517** | **$(4,903)** | [Free Cash Flow Reconciliation](index=15&type=section&id=Free%20Cash%20Flow%20Reconciliation) Groupon's free cash flow for Q1 2024 was negative $13.8 million, calculated by taking the net cash used in operating activities of $10.1 million and subtracting $3.7 million for purchases of property, equipment, and capitalized software, representing an 83.9% improvement from the negative $85.9 million free cash flow in Q1 2023 Reconciliation to Free Cash Flow (in thousands USD) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(10,111) | $(76,320) | | Purchases of property, equipment and capitalized software | $(3,709) | $(9,544) | | **Free cash flow** | **$(13,820)** | **$(85,864)** |

PART I. Financial Information [Financial Statements and Supplementary Data (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20and%20Supplementary%20Data%20(unaudited)) Groupon's unaudited Q1 2024 financial statements show improved revenue, a narrowed net loss, and strengthened equity from a recent Rights Offering Condensed Consolidated Statements of Operations (Q1 2024 vs Q1 2023) | Financial Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :--- | :--- | :--- | | **Revenue** | **$123,084** | **$121,611** | | Gross profit | $110,557 | $104,711 | | Income (loss) from operations | $7,370 | $(30,565) | | **Net income (loss) attributable to Groupon, Inc.** | **$(12,271)** | **$(29,147)** | | Basic and diluted net income (loss) per share | $(0.33) | $(0.95) | Condensed Consolidated Balance Sheet Highlights | Balance Sheet Item | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $158,717 | $141,563 | | Total current assets | $276,896 | $255,583 | | Total liabilities | $539,101 | $611,268 | | **Total equity (deficit)** | **$41,425** | **$(40,312)** | Condensed Consolidated Statements of Cash Flows Highlights | Cash Flow Activity | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | $(10,111) | $(76,320) | | Net cash used in investing activities | $(3,931) | $(9,013) | | **Net cash provided by (used in) financing activities** | **$35,341** | **$(29,197)** | - The company completed an **$80.0 million Rights Offering** in January 2024, significantly improving its equity position and providing cash for debt repayment[17](index=17&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail asset sales, debt termination, a significant $119.3 million Italian tax assessment, restructuring charges, and segment performance - In March 2024, the company agreed to sell certain intangible assets for **$10.0 million**, classified as held-for-sale as of March 31, 2024, with the sale completed in April 2024[36](index=36&type=chunk) - In February 2024, the company prepaid **$43.1 million** to terminate its Credit Agreement using Rights Offering proceeds, eliminating **$42.8 million** in outstanding borrowings[55](index=55&type=chunk)[57](index=57&type=chunk) - A subsidiary in Italy is litigating a **$119.3 million tax assessment**, with an appeal hearing set for July 9, 2024, despite the company believing it is without merit[62](index=62&type=chunk)[112](index=112&type=chunk) - The 2022 Restructuring Plan is expected to cost **$22.0 million to $24.1 million**, with **$21.2 million** in pre-tax charges incurred since inception, involving approximately **1,150 position reductions**[99](index=99&type=chunk) Contribution Profit by Segment (Q1 2024 vs Q1 2023) | Segment | Q1 2024 Contribution Profit (in thousands) | Q1 2023 Contribution Profit (in thousands) | | :--- | :--- | :--- | | North America | $62,346 | $60,639 | | International | $19,402 | $19,224 | | **Consolidated** | **$81,748** | **$79,863** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strategy, operating metrics, and financial performance, highlighting improved Adjusted EBITDA and bolstered liquidity despite customer declines - The company's strategy focuses on becoming the trusted marketplace for local services and experiences by strengthening merchant inventory and enhancing customer experience[135](index=135&type=chunk) Key Operating Metrics (Q1 2024 vs Q1 2023) | Operating Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Gross billings (in thousands) | $381,146 | $396,425 | | Units (in thousands) | 9,125 | 10,459 | | TTM active customers (in thousands) | 16,130 | 18,225 | Key Financial Metrics (Q1 2024 vs Q1 2023) | Financial Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Revenue | $123,084 | $121,611 | | Gross profit | $110,557 | $104,711 | | **Adjusted EBITDA** | **$19,517** | **$(4,903)** | | Free cash flow | $(13,820) | $(85,864) | - SG&A expenses decreased **26.9%** year-over-year to **$74.3 million**, primarily due to lower payroll costs from restructuring efforts[173](index=173&type=chunk)[174](index=174&type=chunk) - The company believes it has sufficient liquidity for the next 12 months, bolstered by the Rights Offering and debt prepayment, despite a pending tax assessment in Italy[188](index=188&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details market risks, including foreign currency exposure, limited interest rate risk from fixed-rate debt, and potential impacts of inflation - **23.5%** of revenue from the International segment exposes the company to foreign currency risk, with a hypothetical **10%** adverse FX change impacting working capital deficit by **$0.3 million**[205](index=205&type=chunk)[207](index=207&type=chunk) - Interest rate risk is limited as the **$230.0 million** 2026 Notes have a fixed interest rate[208](index=208&type=chunk) - Inflation risk could impact consumer and merchant discretionary spending and increase operating costs[209](index=209&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to a material weakness, but financial statements are fairly presented, with remediation ongoing - The CEO and CFO concluded that disclosure controls and procedures were **not effective** as of March 31, 2024, due to an unremediated material weakness[210](index=210&type=chunk) - A remediation plan is in progress to address the material weakness through automation, enhanced review controls, and improved reconciliation procedures[211](index=211&type=chunk) - Despite the material weakness, management concluded that the financial statements are **fairly presented** in all material respects in accordance with GAAP[210](index=210&type=chunk) PART II. Other Information [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 6 for material legal proceedings, primarily a $119.3 million tax dispute in Italy - The report refers to Note 6 of the Condensed Consolidated Financial Statements for details on material legal proceedings[216](index=216&type=chunk) - The key legal matter is a **$119.3 million tax assessment** being litigated by a subsidiary in Italy[62](index=62&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported from the Annual Report on Form 10-K for the year ended December 31, 2023 - No material changes were reported from the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023[218](index=218&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity securities were issued, nor were shares repurchased, though shares were withheld for employee tax obligations - No unregistered equity securities were issued during the three months ended March 31, 2024[220](index=220&type=chunk) - **15,130 shares** were withheld from employees to satisfy mandatory tax withholding requirements upon the vesting of stock-based awards[222](index=222&type=chunk) [Other Information](index=44&type=section&id=Item%205.%20Other%20Information) No officers or directors adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No officers or directors adopted or terminated a Rule 10b5-1 trading arrangement during the quarter ended March 31, 2024[223](index=223&type=chunk) [Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including employment agreements, officer certifications, and XBRL data files - The report includes various exhibits, such as CEO and CFO employment and compensation agreements, Sarbanes-Oxley certifications, and a report on the Italy Income Tax Assessment Matter[225](index=225&type=chunk)