Groupon(US:GRPN)2025-11-06 21:15Financial Performance - Gross billings for North America increased by $44.0 million (16.0%) to $319.1 million for the three months ended September 30, 2025, compared to the same period in 2024 [202]. - Revenue for the three months ended September 30, 2025, was $122.8 million, up from $114.5 million in 2024, representing a growth of 7.9% [194]. - Gross profit for the same period increased to $111.8 million, compared to $102.9 million in 2024, reflecting a growth of 8.6% [194]. - Contribution profit for the three months ended September 30, 2025, was $70.4 million, a 5.3% increase from $66.6 million in 2024 [194]. - Adjusted EBITDA for the three months ended September 30, 2025, was $17.5 million, compared to $14.8 million in 2024, marking a growth of 18.9% [194]. - Contribution profit for North America increased by $6.9 million (14.0%) to $55,962 thousand for the three months ended September 30, 2025 [208]. - Total gross profit for North America increased by $10.0 million (12.8%) to $87,708 thousand for the three months ended September 30, 2025 [206]. - Total gross profit for North America increased by $11.3 million (4.5%) to $262,012 thousand for the nine months ended September 30, 2025 [207]. - Revenue for the nine months ended September 30, 2025, was $365.7 million, with an increase of $1.9 million attributed to exchange rate changes [238]. - The company reported a gross profit of $332.6 million for the nine months ended September 30, 2025, which is an increase of $1.7 million from the previous year [238]. Customer Metrics - Active customers in North America grew by 8.3% to 10.999 million for the trailing twelve months ended September 30, 2025 [202]. - International TTM active customers decreased by 170 thousand (3.2%) to 5,127 thousand for the trailing twelve months ended September 30, 2025 [211]. Segment Performance - North America segment revenue increased by $9.1 million (10.5%) to $96,007 thousand for the three months ended September 30, 2025, compared to the prior year [206]. - International segment revenue decreased by $0.8 million (2.8%) to $26,818 thousand for the three months ended September 30, 2025 [215]. - International revenue decreased by $4.2 million (5.1%) to $78,598 thousand for the nine months ended September 30, 2025 [216]. - The Local category gross billings increased by 18.1% to $293.8 million for the three months ended September 30, 2025 [202]. - The Goods category experienced a decline of 31.9% in gross billings, dropping to $7.6 million for the three months ended September 30, 2025 [202]. Expenses and Cash Flow - Free cash flow for the three months ended September 30, 2025, was $(24.6) million, compared to $(19.7) million in 2024 [194]. - North America marketing expense increased by $3.1 million (10.8%) to $31,746 thousand for the three months ended September 30, 2025 [208]. - International marketing expense increased by 27.3% to $9,696,000 for the three months ended September 30, 2025, compared to $7,615,000 in 2024 [217]. - Total operating expenses for the three months ended September 30, 2025 were $109,642,000, a slight increase of 1.1% from $108,481,000 in 2024 [222]. - Selling, general and administrative (SG&A) expenses decreased by 4.3% to $68,264,000 for the three months ended September 30, 2025, compared to $71,327,000 in 2024 [222]. Tax and Other Financial Matters - Provision for income taxes for the three months ended September 30, 2025 was $2,321,000, compared to $21,248,000 in 2024, reflecting a significant change in effective tax rate [227]. - The company expects future effective tax rates to differ significantly from the U.S. federal income tax rate due to valuation allowances in jurisdictions with losses [227]. - The company expects to pay approximately $15.2 million in cash for tax assessments in Italy, significantly reduced from initial claims of $170 million [242]. - Other income (expense), net for the three months ended September 30, 2025 was $(98,728,000), a significant decrease from $22,429,000 in 2024, primarily due to a loss on extinguishment of debt [225]. Cash and Liquidity - As of September 30, 2025, the company had a cash balance of $238.5 million, with sufficient liquidity to meet operational needs for the next 12 months [240]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $7.9 million, compared to a net cash used of $11.1 million in the prior period [248]. - Net cash provided by investing activities for the nine months ended September 30, 2025, was $4.0 million, an increase from a net cash used of $3.1 million in the prior period [249]. - The company used $6.4 million in financing activities for the nine months ended September 30, 2025, a decrease from $32.9 million provided in the prior period [250]. - As of September 30, 2025, the company held $67.0 million in cash in international subsidiaries, primarily in various foreign currencies [260]. Foreign Currency and Debt - The company is exposed to inflationary pressures that could negatively impact operating costs and financial performance [270]. - The company assesses foreign currency exchange risk using a sensitivity analysis based on a hypothetical 10% change in currency rates [267]. - The net working capital deficit from subsidiaries subject to foreign currency translation risk was $29.8 million as of September 30, 2025 [268]. - A hypothetical 10% adverse change in foreign currency exchange rates could increase the working capital deficit by $3.0 million [268]. - The company has fixed-rate debt with aggregate principal amounts of $33.7 million, $47.3 million, and $244.1 million for the 2026, 2027, and 2030 Notes, respectively [269]. - Changes in market interest rates affect the fair value of the company's fixed-rate notes and other financial variables [269]. - The company’s cash balance as of September 30, 2025, consists of bank deposits, limiting exposure to interest rate changes [269]. - As of September 30, 2025, the U.S. dollar index decreased by 9.6% compared to December 31, 2024 [266]. - Approximately 21.8% and 21.5% of the company's revenue for the three and nine months ended September 30, 2025, respectively, was derived from the International segment [266].