Groupon, Inc. (NASDAQ: GRPN) today announced its financial results for the third quarter ended September 30, 2021 and provided details on its recent operating progress. The company filed its Form 10-Q with the Securities and Exchange Commission and posted an updated presentation on its investor relations website (investor.groupon.com).
Groupon Reports Third Quarter 2021 Results
North America Local Billings Up 38% Year-Over-Year
- Global Billings of $553 million
- Revenue of $214 million
- Net income attributable to common stockholders of $78 million
- Adjusted EBITDA of $35 million
“Throughout 2021, we have made meaningful progress expanding our Local inventory and improving the merchant experience. During the third quarter we grew our high value, active Local customer base, drove unit growth for customers who engaged with our restriction-free Deals, and demonstrated our ability to impact customer demand,” said Aaron Cooper, Interim CEO of Groupon. “As a result, despite the impact from the Delta variant we generated $553 million in global billings, of which approximately 76% were Local billings, $214 million in revenue and $35 million of adjusted EBITDA. We believe these are solid indicators that we remain on the path to recovery and that we are taking the right steps to transform our marketplace into the destination for Local in 2022 and beyond. Merchants are choosing to work with Groupon in new ways and consumers are beginning to respond.”
Operational Highlights
We continue to make progress on our two strategic priorities – expanding inventory and
Modernizing the marketplace:
- Increased the amount of Deal inventory in North America that is repeatable to more than 75% and remain on track to hit our goal of 80% by year-end
- Grew listings per Beauty and Wellness merchant in North America by over 30% since the launch of Offers
- Drove strong merchant adoption of self-service; over 50% of Deals launched in North America were done via self-service during the quarter
- Launched ‘Grab Life by the Groupon’ brand repositioning campaign
- Grew North America active Local customer base 4% quarter-over-quarter
Outlook
For the full year 2021, we are updating our Adjusted EBITDA guidance to a range of $130 million to $135 million and our revenue guidance to a range of $950 million to $975 million.
Third Quarter 2021 Summary
All comparisons in this press release are year-over-year unless otherwise noted. Consolidated
- Revenue was $214.2 million in the third quarter 2021, down 30% (30% FX-neutral) compared with the third quarter 2020, primarily due to lower demand for our Goods category and the transition of Goods from a first-party to a third-party marketplace model. In a third-party marketplace model, we generate service revenue that is presented on a net basis compared with a first-party model, which recognizes revenue on a gross basis. The Goods revenue decline was partially offset by an increase in North America Local gross billings and higher variable consideration from unredeemed
- Gross profit was $181.4 million in the third quarter 2021, up 13% (13% FX-neutral) compared with the third quarter 2020, primarily driven by an increase in North America Local gross billings and higher variable consideration from unredeemed vouchers, partially offset by a decrease in demand for our Goods
- SG&A was $119.5 million in the third quarter 2021, compared with $124.3 million in the third quarter
- Marketing expense was $53.2 million in the third quarter 2021, an increase of 69% compared with the prior year period, primarily driven by the launch of new brand campaigns and increased investment in an effort to drive consumer
- Restructuring charges were $12.5 million in the third quarter 2021 and were related to our multi-phase restructuring plan announced in April
- Other income, net was $82.5 million in the third quarter 2021, compared with an expense of $0.9 million in the third quarter 2020. Other income, net during the current period was primarily related to an unrealized gain of $89.1 million recorded as a result of an upward adjustment for an observable price change on an other equity investment in a mobile payments
- Net income from continuing operations was $78.7 million in the third quarter 2021 compared with a net loss of $16.6 million in the third quarter
- Net income attributable to common stockholders in the third quarter 2021 was $78.1 million, or $2.36 per diluted share, compared with a net loss of $16.3 million, or $0.57 per diluted share, in the prior year period. Non-GAAP net income attributable to common stockholders plus assumed conversions was $12.5 million, or $0.38 per diluted share, in the third quarter 2021, compared with non-GAAP net income attributable to common stockholders of $4.5 million, or $0.15 per diluted share, in the third quarter
- Adjusted EBITDA, a non-GAAP financial measure, was $34.6 million in the third quarter 2021, compared with Adjusted EBITDA of $30.8 million in the third quarter 2020.
- Global units sold in the third quarter 2021 were 15.7 million, down 26% compared with the prior year period, primarily driven by lower consumer demand in our Goods In the third quarter 2021, North America units were flat in Local and down 58% in Goods compared with the prior year period. International units were down 12% and 59% in Local and Goods compared with the prior year period.
- Operating cash flow for the trailing twelve month period was an outflow of $74.0 million, and free cash flow, a non-GAAP financial measure, was an outflow of $124.0 million for the trailing twelve month period. The outflow was primarily driven by seasonal timing of payments to inventory suppliers, mid-year bonus payments and a shortening of the
purchase to redemption cycle relative to year-end 2020 when redemption patterns were more heavily impacted by COVID-19, resulting in higher merchant payment outflows for the year-to-date period. We expect operating and free cash flow to return to more normalized patterns going forward.
- Cash and cash equivalents as of September 30, 2021 were $476.8 million. As of September 30, 2021, we had $100.0 million of outstanding borrowings under our revolving credit
North America
- North America gross profit in the third quarter 2021 was $126.8 million, up 16% compared with the third quarter 2020, primarily driven by an increase in Local gross billings and higher variable consideration from unredeemed vouchers, partially offset by lower demand for our Goods
- North America active customers were 15.0 million as of September 30, 2021, slightly below the balance at the end of the second quarter 2021, primarily driven by declines in our Goods customer Active North America Local customers increased for the same period.
International
- International gross profit in the third quarter 2021 increased 9% to $54.6 million (6% FX- neutral), primarily driven by higher variable consideration from unredeemed vouchers, partially offset by declines in Local and Goods gross
- International active customers were 9.0 million as of September 30, 2021, compared with
9.7 million as of June 30, 2021.
Definitions and reconciliations of all non-GAAP financial measures and additional information regarding operating measures are included below in the section titled “Non-GAAP Financial Measures and Operating Metrics” and in the accompanying tables.
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