Groupon(US:GRPN)2023-05-11 00:33Financial Data and Key Metrics Changes - In Q1 2023, Groupon reported global billings of $396 million, a decrease of 14% year-over-year, and revenues of $122 million, down 21% year-over-year [17][24] - Adjusted EBITDA was negative $5 million, with a free cash outflow of $86 million [17][24] - The company ended the quarter with $164 million in cash, including $48 million drawn on its revolving credit facility [26] Business Line Data and Key Metrics Changes - Local category consolidated billings were $316 million, down 8% year-over-year, with North America local billings at $222 million, down 11% year-over-year [24][25] - Goods billings were $46 million, down 35%, and travel billings were $35 million, down 11% [25] Market Data and Key Metrics Changes - North America had 9 million active local customers, down 2% sequentially and 19% year-over-year [24] - International local billings were $94 million, flat compared to the prior year, with 5 million active local customers, flat sequentially and up 2% year-over-year [24] Company Strategy and Development Direction - The company is focusing on a transformation strategy built on eight strategic pillars, including fixing the supply side of the marketplace and improving product experience [9][10] - Groupon aims to enhance its marketing engine towards lower funnel performance channels and create a high-performance team focused on operational excellence [13][14] - The company plans to leverage its other categories to support local experiences and improve financial flexibility through restructuring and cost-saving measures [16][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in turning the business around and emphasized the need for a focused transformation [8][18] - The outlook for 2023 indicates expected revenue declines in Q2 similar to Q1, with slight improvements anticipated in the rate of declines in subsequent quarters [18][29] - Management expects to see an increase in year-over-year local billings by early 2024 as the transformation strategy takes hold [19][29] Other Important Information - The company incurred $9 million in one-time pretax charges related to its restructuring plan during Q1 2023 [26] - Groupon is on track to reduce its non-GAAP SG&A run rate to approximately $290 million beyond 2023 [28] Q&A Session Summary Question: Insights on North America and international local billings in March and Q2 - Management reported Q1 local billings in North America at $222 million, down 14% quarter-over-quarter and 11% year-over-year [32] Question: Potential monetization of the SumUp stake - Management indicated that monetization of noncore assets, including the SumUp stake, is possible if a sufficient bid arises [32] Question: Details on improving product experience and marketing engine - Management highlighted initiatives like the Hackathon Project to enhance user experience and the use of generative AI for better deal quality [34][35] - The marketing engine is being adjusted to focus more on geo-targeted performance marketing [36]