Core Viewpoint - Groupon's shares have increased by approximately 25.9% since the last earnings report, outperforming the S&P 500, raising questions about the sustainability of this positive trend leading up to the next earnings release [1] Group 1: Earnings and Estimates - The consensus estimate for Groupon has shifted downward by 7.24% over the past month, indicating a negative trend in estimates [2] - The most recent earnings report is crucial for understanding the catalysts affecting the stock's performance [1] Group 2: VGM Scores - Groupon has a strong Growth Score of A, but it is significantly lagging in Momentum Score with an F, while holding a middle-tier value grade of C [3] - The aggregate VGM Score for Groupon is C, which is relevant for investors not focused on a single strategy [3] Group 3: Outlook - The overall trend for estimates has been downward, suggesting a potential decline in stock performance, with a Zacks Rank of 3 (Hold) indicating expectations for an in-line return in the coming months [4]

Company Performance - Groupon's stock closed at $16.80, showing no change from the previous day, outperforming the S&P 500 which fell by 1.57% [1] - Over the past month, Groupon's shares have increased by 70.9%, while the Retail-Wholesale sector and S&P 500 experienced losses of 11.13% and 12.16%, respectively [1] Earnings Expectations - The upcoming earnings report is expected to show an EPS of -$0.20, a decline of 433.33% from the same quarter last year, with projected revenue of $115.5 million, down 6.16% year-over-year [2] - For the annual period, the Zacks Consensus Estimates predict an EPS of -$0.25 and revenue of $497.1 million, reflecting increases of 83.44% and 0.92% from the previous year [3] Analyst Sentiment - Recent changes in analyst estimates for Groupon indicate a shift in near-term business trends, with positive revisions suggesting optimism about the company's profitability [3] - The Zacks Rank system, which evaluates these estimate changes, currently ranks Groupon at 3 (Hold), with the EPS estimate having decreased by 21.72% in the past month [5] Industry Context - Groupon operates within the Internet - Commerce industry, which is part of the Retail-Wholesale sector, currently holding a Zacks Industry Rank of 63, placing it in the top 26% of over 250 industries [6] - The Zacks Industry Rank assesses the strength of industry groups, indicating that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [6]

Group 1 - Groupon, Inc. (GRPN) has reached a significant support level and is considered a good pick for investors from a technical perspective due to a "golden cross" formation [1] - The golden cross is characterized by a short-term moving average breaking above a long-term moving average, indicating a potential bullish breakout [2] - GRPN shares have increased by 54.6% over the past four weeks, and the company holds a 3 (Hold) rating on the Zacks Rank, suggesting a potential breakout [3] Group 2 - The positive earnings outlook for GRPN is supported by one upward revision in earnings estimates over the past 60 days, with no downward revisions, leading to an increase in the Zacks Consensus Estimate [3] - The combination of earnings estimate revisions and the technical breakout signals indicates that investors should monitor GRPN for potential gains in the near future [4]

Core Viewpoint - Groupon, Inc. (GRPN) stock is currently overbought and nearing a resistance level, indicating a potential sell-off in the near future [1][4][5] Group 1: Stock Performance - Trading in Groupon stock has been quiet but trending higher, with a significant chance of reversal and sell-off due to overbought conditions [1] - The Relative Strength Momentum Indicator (RSI) shows that the stock is in overbought territory, as indicated by the blue line being above the horizontal red line [1][2] Group 2: Market Behavior - Over the past year, each time the RSI indicated overbought conditions, a subsequent decline in stock price followed [4] - Groupon is approaching a resistance level around $18, where many traders may look to sell, fearing they will miss out on potential profits [4][5] - The fear of being undercut by other sellers may lead to a reduction in the prices traders are willing to accept, potentially triggering a snowball effect that drives the price lower [5]

Group 1 - The stock markets have experienced a sharp reversion recently, yet smaller-cap stocks, which are typically considered riskier, have shown significant upside during this downturn [1] - The performance of these smaller-cap stocks contrasts with the overall market trend, indicating potential investment opportunities in this segment [1] Group 2 - Gary Alexander has extensive experience in the technology sector, having worked on Wall Street and in Silicon Valley, and has been involved with seed-round startups [2] - His insights and analyses have been featured in various publications and trading platforms, suggesting a strong influence on market perceptions [2]

Core Insights - Groupon's shares surged 37% following a better-than-expected earnings report and progress in its turnaround strategy [1] Financial Performance - Groupon reported a fourth-quarter net loss per share of $1.20 on total revenue of $130.4 million, exceeding analyst expectations [2] - Adjusted earnings were $18.7 million, which was $800,000 higher than estimates [2] - North America Local Billings grew by 8% in the fourth quarter, marking a recovery after a challenging third quarter [2] Future Outlook - Management anticipates full-year revenue for 2025 to be flat to 2% higher, surpassing estimates [3] - Expected adjusted earnings for 2025 are projected to be between $70 million and $75 million, with free cash flow of at least $41 million [3] Strategic Transformation - Under CEO Dusan Senkypl, Groupon has streamlined its operations and is focused on returning to growth after recent struggles [4] - The stock is trading at approximately 13 times forward earnings, indicating it is not overly expensive despite recent gains [4]

Financial Data and Key Metrics Changes - In Q4 2024, Groupon reported an 8% growth in North America Local billings, recovering from a 19% decline in 2022 [10][12] - The company generated $69 million in adjusted EBITDA and $41 million in free cash flow for the full year, marking its first positive free cash flow since exiting the pandemic [11][12] - The cash position improved to $229 million compared to the previous year [14] Business Line Data and Key Metrics Changes - North America Local saw a return to 8% billing growth in Q4, while International Local (excluding Italy) grew billings by 2% [13] - Key verticals such as Things to Do, enterprise brands, and gifting experienced double-digit growth [13] Market Data and Key Metrics Changes - The top five metro areas in North America experienced double-digit growth in Q4, attributed to targeted strategies [26][28] - Internationally, positive trends were noted in major markets including Spain, the U.K., France, and Germany, which collectively account for approximately 80% of international local business [83] Company Strategy and Development Direction - Groupon's 2025 strategy focuses on winning in key markets through a city-by-city approach, prioritizing high-impact categories like Things to Do, beauty and wellness, and gifting [14] - The company aims to enhance customer retention through improved personalization and boost merchant success with enhanced tools [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to sustained growth in 2025, with a focus on improving platform stability and customer retention [14][96] - The company acknowledged challenges in Q3 due to technical migrations but noted a strong rebound in Q4 [12][19] Other Important Information - Gifting has gained importance, with double-digit shares of orders during the peak holiday season, although still below the long-term goal of 50% [77][79] - The impact of recent U.S. tariffs is expected to be minimal, as most of Groupon's business is focused on local experiences rather than goods [92] Q&A Session Summary Question: What drove the local growth in the U.S.? - Management attributed the turnaround to improved platform stability and a shift towards a curated marketplace focusing on quality rather than quantity [19][20] Question: Were any lost loyal customers recovered? - Management noted improvements in platform stability contributed to recovering some of the lost cohort, leading to better overall results [22] Question: What drove the strength in the top five metro areas? - The growth was a result of targeted strategies and building market management capabilities [28][30] Question: Does the guidance include continued customer growth? - The plan expects slight improvements in customer acquisition and retention [40] Question: What critical investments are being made to drive purchase frequency? - Management highlighted the introduction of "wow deals" and improved communication with customers post-purchase as key strategies [49][50] Question: How is the company attracting higher quality merchants? - The strategy involves a consultative sales approach and focusing on high-quality deals rather than deep discounts [66][68] Question: Will Groupon see counter-cyclical tailwinds if consumer pressure increases? - Management believes Groupon will be attractive to merchants with excess capacity and to consumers seeking value [72] Question: What metrics are available regarding gifting improvements? - Gifting has shown significant improvement, particularly during the holiday season, although specific numbers were not disclosed [77] Question: What are the drivers of growth in international markets? - Positive trends were noted in Spain, the U.K., France, and Germany, with a focus on optimizing supply and marketing [85] Question: How is employee turnover being managed? - Management acknowledged high turnover in sales but emphasized a strong performance-based compensation structure to retain top salespeople [88] Question: What is the expected impact of U.S. tariffs? - The impact is expected to be minimal, as most revenue comes from local experiences rather than goods [92] Question: What is the relationship between user engagement and growth? - Improved conversion rates and effective marketing strategies have driven growth, with a focus on increasing transaction frequency [96][99]

Financial Data and Key Metrics Changes - In Q4 2024, North America Local experienced an 8% growth in billings, recovering from a 19% decline in 2022, indicating a significant turnaround in marketplace health [10][12] - The company generated $69 million in adjusted EBITDA and $41 million in free cash flow for the full year, marking its first positive free cash flow since exiting the pandemic [11][12] - The cash position improved to $229 million compared to the previous year, providing a stronger foundation for growth [14] Business Line Data and Key Metrics Changes - North America Local saw a return to 8% billing growth, while International Local, excluding Italy, grew by 2%, with positive momentum across all major markets [13] - Key verticals such as Things to Do, enterprise brands, and gifting experienced double-digit growth [13] Market Data and Key Metrics Changes - The top five metro areas in North America achieved double-digit growth in Q4, reflecting the effectiveness of the targeted strategy [26][28] - Internationally, Spain showed strong performance, with some areas reaching 2019 levels, and positive trends were noted in the UK, France, and Germany [83] Company Strategy and Development Direction - The 2025 strategy focuses on winning in key markets through a city-by-city approach, prioritizing high-impact categories like Things to Do, beauty and wellness, and gifting [14] - The company aims to enhance customer retention through improved personalization and boost merchant success with enhanced tools [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to sustained growth in 2025, emphasizing the importance of platform stability and curated marketplace strategies [14][19] - The company anticipates slight improvements in customer acquisition and retention, with a focus on increasing transaction frequency [38][40] Other Important Information - The company is investing in platform modernization, including major migrations of its fraud detection platform and cloud infrastructure, which are expected to drive innovation and engagement [11] - Management noted that the impact of recent U.S. tariffs on the business would be minimal, as most revenue comes from local experiences rather than goods [92] Q&A Session Summary Question: What drove the local growth in the U.S.? - Management attributed the turnaround to improved platform stability and a strategic shift towards a curated marketplace focused on quality rather than quantity [19][20] Question: Were any lost loyal customers recovered? - Management indicated that improvements in platform stability led to better results across the board, including the recovery of some lost cohorts [22] Question: What drove the strength in the top five metro areas? - The growth was a result of targeted strategies and market management capabilities developed over the past two years [28][30] Question: Does the guidance include continued customer growth? - Management expects slight improvements in customer acquisition and retention, but does not anticipate significant changes [40] Question: What are the critical investments to drive purchase frequency? - Management highlighted the introduction of "wow deals" and improved communication with customers post-purchase as key strategies to increase purchase frequency [49][50] Question: How is the company attracting higher quality merchants? - The company focuses on a consultative sales approach, emphasizing value over deep discounts to attract quality merchants [66][68] Question: Will the company see counter-cyclical tailwinds if consumers face pressure? - Management believes that Groupon will be an attractive option for merchants with excess capacity and for consumers seeking value [72][73] Question: What metrics indicate improvement in gifting? - Gifting has gained importance, with double-digit shares of orders during peak holiday seasons, showing significant improvement compared to last year [77][78] Question: What are the drivers of growth within international markets? - Positive signals were noted in Spain, the UK, France, and Germany, with a focus on optimizing supply and marketing strategies [83][85] Question: How is the company managing employee turnover in sales? - Management acknowledged high turnover in sales but emphasized a strong performance-based compensation structure to retain top salespeople [88] Question: What is the expected impact of U.S. tariffs? - The impact is expected to be minimal, as the majority of the business is focused on local experiences rather than goods [92]

Core Insights - Groupon reported its financial results for Q4 and the fiscal year 2024, highlighting a flat local revenue in North America for Q4 and a modest growth in local billings by 8% [1][2] - The company achieved a positive operating cash flow of $55.9 million and free cash flow of $40.6 million for the trailing twelve months [1] - Groupon's CEO emphasized the successful execution of the transformation strategy, returning North America Local to growth and generating positive free cash flow for the first time since the pandemic [2] Financial Performance - North America Q4 Local Revenue remained flat, while Local Billings increased by 8% [1] - For the full year 2024, North America Local Revenue grew by 1% and Local Billings by 3% [1] - The company reported a positive operating cash flow of $55.9 million and free cash flow of $40.6 million for the trailing twelve months [1] Strategic Outlook - The CEO noted a rebound in Q4 following a challenging Q3, indicating a stronger foundation for growth entering 2025 [2] - The company aims to accelerate growth based on the momentum gained in the fourth quarter [2]

Revenue Performance - Full year 2024 revenue was $492.6 million, down 4% compared to $514.9 million in 2023[4] - Full year gross billings totaled $1.6 billion, down 5% from $1.65 billion in 2023[3] - Fourth quarter 2024 revenue was $130.4 million, down 5% compared to the prior year period[6] - Revenue for Q4 2024 was $130,379,000, a decrease of 5.4% from $137,716,000 in Q4 2023[36] - Total revenue for Q4 2024 was $137.7 million, reflecting a decline of 5.3% compared to the previous year[41] Customer Metrics - Active customers as of December 31, 2024, were 15.4 million, a decrease of 6% year-over-year[6] - Active customers in North America remained stable at 10.3 million in Q4 2024, while international active customers decreased to 5.1 million[42] Profitability and Loss - Fourth quarter 2024 net loss was $50.1 million, compared to net income of $28.5 million in the prior year period[6] - Net loss attributable to Groupon, Inc. for Q4 2024 was $50,649,000, compared to a net income of $27,702,000 in Q4 2023[36] - Net income for Q4 2024 was a loss of $50,118 thousand, compared to a profit of $28,489 thousand in Q4 2023[38] - The company reported a basic net loss per share of $1.20 for Q4 2024, compared to a net income per share of $0.87 in Q4 2023[36] Operating Performance - Fourth quarter 2024 adjusted EBITDA was $18.7 million, down from $26.9 million in the prior year period[6] - Contribution profit for Q4 2024 was $75.6 million, down 14.0% year-over-year[41] - Adjusted EBITDA for Q4 2023 was $26,938, decreasing to $18,661 in Q4 2024[46] Cash Flow and Liquidity - Operating cash flow for the full year 2024 was $55.9 million, with free cash flow of $40.6 million[4] - The company exited Q4 2024 with $228.8 million in cash and cash equivalents[6] - Cash and cash equivalents increased to $228,843,000 in Q4 2024, compared to $141,563,000 in Q4 2023, a significant increase of 61.5%[34] - Free cash flow for Q4 2024 was $63.2 million, representing a 23.6% increase year-over-year[41] - Total net cash provided by operating activities for Q4 2024 was $66,963 thousand, an increase from $54,500 thousand in Q4 2023[38] Expenses - Operating expenses increased to $115,535,000 in Q4 2024, up from $104,657,000 in Q4 2023, representing a rise of 10.4%[36] - Marketing expenses for Q4 2024 were $42,620,000, an increase of 23.5% from $34,492,000 in Q4 2023[36] - Total depreciation and amortization for the year ended December 31, 2024 was $27,889 thousand, down from $43,401 thousand in 2023[38] - Depreciation and amortization expenses decreased from $10,902 in Q4 2023 to $6,504 in Q4 2024[46] Assets and Liabilities - Total current assets rose to $315,361,000 as of December 31, 2024, compared to $255,583,000 at the end of 2023, an increase of 23.4%[34] - Total liabilities decreased to $571,639,000 as of December 31, 2024, down from $611,268,000 at the end of 2023, a reduction of 6.5%[34] - The company’s total assets increased to $612,690,000 as of December 31, 2024, compared to $570,956,000 at the end of 2023, an increase of 7.1%[34] Segment Performance - North America Local billings grew 8% in Q4 2024, indicating a rebound from previous quarters[2] - The North America segment reported gross billings of $300.3 million in Q4 2024, with a year-over-year growth of 1.8%[41] - International segment gross billings totaled $136.1 million in Q4 2024, reflecting a decline of 8.7% year-over-year[41] - International revenue in Q4 2024 was $33.7 million, down 11% year-over-year, primarily due to exiting the Local business in Italy[13] Other Financial Metrics - Stock-based compensation for Q4 2024 was $9,052 thousand, significantly higher than $710 thousand in Q4 2023[38] - The company recorded a foreign currency gain of $34,837 thousand in Q4 2024, compared to a loss of $14,633 thousand in Q4 2023[38] - Net cash used in investing activities for Q4 2024 was $(3,742) thousand, a decrease from net cash provided of $15,568 thousand in Q4 2023[38] - Net cash provided by financing activities for Q4 2024 was $14,861 thousand, compared to a net cash used of $(4,737) thousand in Q4 2023[38]