Groupon(US:GRPN)2023-11-10 01:44Financial Data and Key Metrics Changes - In Q3 2023, global billings were $419 million, a decrease of approximately 3%, showing significant improvement from a 14% decline in Q2 [30] - Revenue was $126 million, down 12% year-over-year, but improved sequentially compared to Q2 [30] - Adjusted EBITDA was $18 million, marking the second consecutive quarter of positive adjusted EBITDA generation [32] - Free cash outflow was $18 million, an improvement compared to previous quarters, but still negative [32] Business Line Data and Key Metrics Changes - Local billings reached $354 million, up 2% year-over-year, marking the first growth since the pandemic [34] - North America local billings were $260 million, up 5% year-over-year, while international local billings were $94 million, down 3% [34] - Goods billings were $36 million, down 34% year-over-year, and travel billings were $29 million, down 16% [34] Market Data and Key Metrics Changes - The company experienced a strong performance in the "Things To Do" vertical, aided by a large enterprise deal in August [34] - Health, Beauty & Wellness and Food & Drink verticals continued to face headwinds [34] Company Strategy and Development Direction - The company is transitioning from a cost-cutting mindset to a topline-first approach, focusing on product, engineering, sales, marketing, and revenue management [9] - A plan to raise approximately $100 million through an equity rights offering and non-core asset sales is in place to support the transformation [6][10] - The company aims to improve its marketplace reliability and enhance the customer experience through a new consumer front-end [15][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that several ambitious projects will take longer to deliver than expected, impacting financial progress [8] - The company is cautious about local billings potentially turning negative in Q4, despite earlier growth [44] - Management expects to generate positive free cash flow for the entire year of 2024, although Q1 may be negative due to seasonal factors [45] Other Important Information - Eric Lefkofsky resigned from the Board of Directors to focus on other commitments, but remains engaged as a significant shareholder [27][28] - The company is evaluating monetization of non-core assets, including stakes in SumUp and GiftCloud, which could generate additional liquidity [42] Q&A Session Summary Question: Can you discuss the cadence of growth in North America local billings throughout Q3? - Management noted that local billings were helped by strong seasonal performance and a popular deal, but they do not comment on monthly trends [48][49] Question: What constraints were faced in increasing marketing spend? - Management indicated that current platform limitations affect advertising capabilities, but improvements are expected with ongoing projects [50][51] Question: What steps are being taken to drive retention between merchants and consumers? - Management plans to offer different pricing conditions for first-time and repeat customers to enhance retention [52][54] Question: How far along is the merchant acquisition process? - Management expressed a desire for faster delivery in merchant acquisition and emphasized ongoing improvements in sales productivity [56][59]