Groupon (GRPN) Q3 Earnings call transcript Nov 12, 2024

In a recent earnings call, Groupon Inc. provided insights into its third quarter 2024 performance, highlighting both challenges and opportunities for the company. Amidst a backdrop of platform migrations and shifting market dynamics, Groupon is working to transform its business and position itself for long-term success.

Market Performance and Challenges

Groupon reported a decline in global billings and revenue for the third quarter, with revenue decreasing by 9.5% year-over-year. This trend was attributed to a combination of factors, including the exit of Italy from the Local business due to a tax matter and challenges in North America, particularly in the form of technical issues related to platform migrations. Despite these challenges, the company's management remains optimistic about the future, with a focus on improving international markets and addressing the technical challenges in North America.

International Growth and Strategies

International markets, excluding Italy, showed positive signs of recovery, with several green shoots emerging in various countries. Groupon's strategy to implement its marketplace playbook, which focuses on improving sales capacity, repopulating main categories, and targeting high-volume deals, is expected to drive growth in international markets. The company's success in Spain, where it first applied the marketplace playbook, is a promising indicator of its potential for success in other markets.

North America Performance and Transformation

In North America, Groupon faced significant challenges in the third quarter, with revenue falling short of expectations. The company's efforts to transform its platform and enhance the customer experience are ongoing, with a focus on improving sales capacity, targeting key categories, and bringing on volume drivers to fuel growth. Despite the challenges, Groupon remains committed to its long-term vision of sustainable growth.

Financial Outlook and Strategies

Groupon's financial outlook for the fourth quarter and full year 2024 reflects a cautious yet optimistic approach. The company expects to achieve positive adjusted EBITDA and free cash flow for the full year, with revenue projected to decline year-over-year. Groupon's focus on cost savings, exploring potential payment method changes, and evaluating noncore asset sales are all part of its efforts to improve financial flexibility and position itself for future growth.

Conclusion

Groupon's third quarter 2024 results underscore the company's ongoing transformation journey, marked by both challenges and opportunities. With a focus on international growth, North America's turnaround, and financial strategies, Groupon is poised to navigate the evolving market landscape and work towards sustainable growth in the years ahead.