grpn-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number: 1-35335

Groupon, Inc.

(Exact name of registrant as specified in its charter)

Delaware

27-0903295

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

35 West Wacker Drive

60601

25th Floor

(Zip Code)

Chicago

Illinois

(773)

945-6801

(Address of principal executive offices)

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.0001 per share

GRPN

NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☒

Non-accelerated filer ☐ Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of May 6, 2024, there were 39,540,752 shares of the registrant's common stock outstanding.

TABLE OF CONTENTS


PART I. Financial Information			Page
G lossary of Defined Terms and Abbreviations			3
Forward-Looking Statements			4
Item 1. Financial Statements and Supplementary Data (unaudited)			5
Condensed Consolidated Balance Sheets			5
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)			6
Condensed Consolidated Statements of Stockholders' Equity (Deficit)			7
Condensed Consolidated Statements of Cash Flows			8
Notes to Condensed Consolidated Financial Statements			10
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			26
Item 3. Quantitative and Qualitative Disclosures about Market Risk			40
Item 4. Controls and Procedures			41
PART II. Other Information
Item 1. Legal Proceedings			42
Item 1A. Risk Factors			43
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			44
Item 5. Other Information			44
Item 6. Exhibits			45
Signatures			46

GLOSSARY OF DEFINED TERMS AND ABBREVIATIONS

Groupon, Inc. (the "Company." "we," "our," "us," and similar terms include Groupon, Inc. and it subsidiaries, unless the context indicates otherwise. The Company also uses several other terms in this Quarterly Report on Form 10-Q, which are defined in the list below (the "Glossary"):


Abbreviation			Description
2011 Plan			The Company’s 2011 Incentive Stock Plan, as amended
2020 Restructuring Plan			April 2020 Board approved multi-phase restructuring plan
2022 Cost Savings Plan			August 2022 Board approved multi-phase cost savings plan
2022 Restructuring Plan			August 2022 Board approved restructuring plan, included within the 2022 Cost Savings Plan
2026 Notes			The Company’s 1.125% convertible senior notes due May 2026
600 West Chicago			The Company’s previously leased headquarters located in Chicago, Illinois
Assessment			Claims for tax assessments by foreign jurisdictions, inclusive of estimated incremental interest from the original assessment.
ASU			Accounting Standards Update
Backstop Party			Pale Fire Capital SICAV a.s.
Bank Secrecy Act			Bank Secrecy Act of 1970
Board			The Company’s Board of Directors
CARD Act			Credit Card Accountability Responsibility and Disclosure Act of 2009
Cash Collateral Agreement			Agreement dated March 2, 2023 with JPMorgan Chase Bank, N.A.
Common Stock			Company common stock, par value $0.00001 per share
Compensation Committee			Compensation Committee of the Board
CPRA			California Privacy Rights Act
Credit Agreement			Second amended and restated credit agreement JPMorgan Chase Bank, N.A., dated May 14, 2019, as amended from time to time and as terminated as of February 12, 2024
EBITDA			Earnings Before Interest, Taxes, Depreciation and Amortization
ESPP			The Company’s 2012 Employee Stock Purchase Plan
Exchange Act			Securities Exchange Act of 1934, as amended
Expiration Date			January 17, 2024, 5:00 p.m., New York City time, representing the date the subscription period for the Rights Offering expired
FASB			Financial Accounting Standards Board
GAAP			U.S. Generally Accepted Accounting Principles
GDPR			General Data Protection Regulation
Payoff Amount			Payment of $43.1 million to terminate all commitments to extend further credit under the Credit Agreement
PSU			Performance Share Units
RSU			Restricted Stock Units
Rights Offering			Board approved $80 million fully backstopped rights offering to the Company's stockholders that commenced on November 20, 2023
Quarterly Report			Quarterly Report on Form 10-Q for the period ended March 31, 2024
SEC			Securities and Exchange Commission
Securities Act			Securities Act of 1933, as amended
SG&A			Selling, general and administrative
SumUp			SumUp Holdings S.a.r.l, a privately-held mobile payments company
TTM			Trailing twelve months
Uptake			Uptake, Inc.

PART I. FINANCIAL INFORMATION

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations and future liquidity. The words "may," "will," "should," "could," "expect," "anticipate," "believe," "estimate," "intend," "continue" and other similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, but are not limited to, our ability to execute and achieve the expected benefits of our go-forward strategy; execution of our business and marketing strategies; volatility in our operating results; challenges arising from our international operations, including fluctuations in currency exchange rates, tax, legal and regulatory developments in the jurisdictions in which we operate and geopolitical instability resulting from the conflicts in Ukraine and the Middle East; global economic uncertainty, including as a result of inflationary pressures; retaining and adding high quality merchants and third-party business partners; retaining existing customers and adding new customers; competing successfully in our industry; providing a strong mobile experience for our customers; managing refund risks; retaining and attracting members of our executive and management teams and other qualified employees and personnel; customer and merchant fraud; payment-related risks; our reliance on email, Internet search engines and mobile application marketplaces to drive traffic to our marketplace; cybersecurity breaches; maintaining and improving our information technology infrastructure; reliance on cloud-based computing platforms; completing and realizing the anticipated benefits from acquisitions, dispositions, joint ventures and strategic investments; lack of control over minority investments; managing inventory and order fulfillment risks; claims related to product and service offerings; protecting our intellectual property; maintaining a strong brand; the impact of future and pending litigation; compliance with domestic and foreign laws and regulations, including the CARD Act, GDPR, CPRA, and other privacy-related laws and regulations of the Internet and e-commerce; classification of our independent contractors, agency workers, or employees; our ability to remediate our material weakness over internal control over financial reporting; risks relating to information or content published or made available on our websites or service offerings we make available; exposure to greater than anticipated tax liabilities; adoption of tax laws; our ability to use our tax attributes; impacts if we become subject to the Bank Secrecy Act or other anti-money laundering or money transmission laws or regulations; our ability to raise capital if necessary; risks related to our access to capital and outstanding indebtedness, including our 2026 Notes; our Common Stock, including volatility in our stock price; our ability to realize the anticipated benefits from the capped call transactions relating to our 2026 Notes; and those risks and other factors discussed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2023 and Part II, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, as well as in our Condensed Consolidated Financial Statements, related notes, and the other financial information appearing elsewhere in this report and our other filings with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we make. Neither the Company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements for any reason after the date of this report to conform these statements to actual results or to future events or circumstances. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

GROUPON, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(unaudited)


	March 31, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	158,717	$	141,563
Accounts receivable, net	49,469		50,373
Prepaid expenses and other current assets	63,538		63,647
Assets held-for-sale	5,172		—
Total current assets	276,896		255,583
Property, equipment and software, net	25,793		30,530
Right-of-use assets - operating leases, net	2,696		2,197
Goodwill	178,685		178,685
Intangible assets, net	4,879		11,404
Investments	74,823		74,823
Deferred income taxes	11,445		11,639
Other non-current assets	5,309		6,095
Total assets	$	580,526	$	570,956
Liabilities and equity (deficit)
Current liabilities:
Short-term borrowings	$	—	$	42,776
Accounts payable	8,892		15,016
Accrued merchant and supplier payables	191,886		209,423
Accrued expenses and other current liabilities	96,528		101,939
Total current liabilities	297,306		369,154
Convertible senior notes, net	226,862		226,470
Operating lease obligations	1,451		2,382
Other non-current liabilities	13,482		13,262
Total liabilities	539,101		611,268
Commitments and contingencies (see Note 6)
Stockholders' equity (deficit)
Common Stock, par value $0.0001 per share, 100,500,000 shares authorized; 49,272,332 shares issued and 38,978,215 shares outstanding at March 31, 2024; 42,147,266 shares issued and 31,853,149 shares outstanding at December 31, 2023	5		4
Additional paid-in capital	2,419,282		2,337,565
Treasury stock, at cost, 10,294,117 shares at March 31, 2024 and December 31, 2023	(922,666)		(922,666)
Accumulated deficit	(1,462,158)		(1,449,887)
Accumulated other comprehensive income (loss)	6,705		(5,647)
Total Groupon, Inc. stockholders' equity (deficit)	41,168		(40,631)
Noncontrolling interests	257		319
Total equity (deficit)	41,425		(40,312)
Total liabilities and equity (deficit)	$	580,526	$	570,956

See Notes to Condensed Consolidated Financial Statements.

GROUPON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except share and per share amounts)

(unaudited)


	Three Months Ended March 31,
	2024		2023
Revenue	$	123,084	$	121,611
Cost of revenue	12,527		16,900
Gross profit	110,557		104,711
Operating expenses:
Marketing	28,809		24,848
Selling, general and administrative	74,282		101,634


Restructuring and related charges	96		8,794
Total operating expenses	103,187		135,276
Income (loss) from operations	7,370		(30,565)
Other income (expense), net	(12,682)		3,070
Income (loss) before provision (benefit) for income taxes	(5,312)		(27,495)
Provision (benefit) for income taxes	6,194		1,118
Net income (loss)	(11,506)		(28,613)
Net (income) loss attributable to noncontrolling interests	(765)		(534)
Net income (loss) attributable to Groupon, Inc.	$	(12,271)	$	(29,147)

SEC Form 10-Q filed by Groupon Inc.