CHICAGO--(BUSINESS WIRE)--Groupon, Inc. (NASDAQ: GRPN) today announced financial results for the quarter ended June 30, 2012.
Revenue increased 45% year-over-year to $568.3 million in the second quarter 2012, compared with $392.6 million in the second quarter 2011. Excluding the $32.4 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, revenue growth would have been 53% compared with second quarter 2011.
The second quarter 2012 was the first quarter that direct revenue, or the amount earned from the sale of products for which the Company is the merchant of record, was material to Groupon’s overall performance. Accordingly, the Company’s consolidated revenue presentation now includes third-party revenue, which is related to sales for which the Company acts as an agent for the merchant, as well as direct revenue. Third-party and direct revenues are recorded on a net and gross basis, respectively. Direct revenue was $65.4 million in the quarter, compared with $19.2 million in the first quarter 2012.
Gross billings, which reflects the total amount collected from customers, excluding any applicable taxes and net of estimated refunds, increased 38% year-over-year to $1.29 billion in the second quarter 2012, compared with $929.2 million in the second quarter 2011. Excluding the $75.1 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, gross billings growth would have been 47% compared with second quarter 2011.
Operating income was $46.5 million in the second quarter 2012, which included non-cash stock-based compensation and acquisition-related expenses of $25.4 million. This compares with a loss from operations of $101.0 million in the second quarter 2011, which included non-cash stock-based compensation expense of $38.7 million. Year-over-year changes in foreign exchange rates throughout the quarter had a $0.2 million unfavorable impact on operating income.
“We had a solid quarter despite challenges in Europe and continued investment in technology and infrastructure,” said Andrew Mason, CEO of Groupon. “We’ve deepened our relationships with a growing base of merchants and customers worldwide, demonstrating progress as we work to unlock the opportunity in local commerce.”
Operating cash flow increased 93% year-over-year to $75.3 million, compared with $39.0 million in the second quarter 2011. For the trailing twelve months ended June 30, 2012, operating cash flow was $392.5 million. Free cash flow, a non-GAAP financial measure calculated as operating cash flow less capital expenditures, was $48.6 million for the second quarter 2012, bringing free cash flow for the trailing twelve months ended June 30, 2012 to $330.1 million. This reflects an increase of 243% year-over-year compared to free cash flow in the trailing twelve months ended June 30, 2011 of $96.4 million. At the end of the quarter, Groupon had $1.2 billion in cash and cash equivalents and no long-term debt.
Second quarter 2012 net income attributable to common stockholders improved to $28.4 million, or $0.04 per share. Non-GAAP earnings attributable to common stockholders for the second quarter 2012 improved to $53.8 million, or $0.08 per share, excluding stock-based compensation and acquisition-related expenses of $25.4 million. Second quarter 2012 results included a $33.0 million net gain from non-recurring items, comprised of a $56.0 million non-operating gain and $23.0 million of tax expense. This resulted from a transaction whereby the Company’s minority interest in its China operations was exchanged along with an additional cash investment, for a minority interest in Life Media, Limited (also known as F-tuan), a leading competitor. Net income attributable to common stockholders also included a $3.9 million reduction related to the settling of remaining commitments to purchase additional interests in consolidated subsidiaries from minority shareholders. The net positive impact of these two items was $0.04 per share.
Second quarter 2012 net income attributable to common stockholders improved by $135.8 million year-over-year, from a net loss of $107.4 million, or a loss per share of $0.35 in the second quarter 2011. Non-GAAP net income attributable to common stockholders improved by $122.5 million year-over-year, from a net loss of $68.7 million, or a non-GAAP loss per share of $0.23 in the second quarter 2011, excluding non-cash stock-based compensation expenses of $38.7 million.
| Groupon, Inc. | ||||||||||||||||||||||||||
| Summary Consolidated and Segment Results | ||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| June 30, | Y/Y % | June 30, | Y/Y % | |||||||||||||||||||||||
| 2011 | 2012 |
Y/Y% |
Growth |
2011 | 2012 |
Y/Y% |
Growth |
|||||||||||||||||||
|
(dollars in thousands, except share and per share data) |
(dollars in thousands, except share and per share data) | |||||||||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| North America | $ | 157,205 | $ | 260,181 | 65.5 | % | 66.0 | % | $ | 293,817 | $ | 498,746 | 69.7 | % | 70.3 | % | ||||||||||
| International | 235,377 | 308,154 | 30.9 | % | 44.1 | % | 394,288 | 628,872 | 59.5 | % | 74.5 | % | ||||||||||||||
| Consolidated revenue | $ | 392,582 | $ | 568,335 | 44.8 | % | 53.0 | % | $ | 688,105 | $ | 1,127,618 | 63.9 | % | 72.6 | % | ||||||||||
| Operating (loss) income | $ | (101,027 | ) | $ | 46,485 | N/A | N/A | $ | (218,175 | ) | $ | 86,124 | N/A | N/A | ||||||||||||
| Net (loss) income attributable to common stockholders | $ | (107,406 | ) | $ | 28,386 | N/A | N/A | $ | (253,886 | ) | $ | 16,691 | N/A | N/A | ||||||||||||
| Non-GAAP net (loss) income attributable to common stockholders(2) | $ | (68,688 | ) | $ | 53,835 | N/A | N/A | $ | (196,304 | ) | $ | 70,092 | N/A | N/A | ||||||||||||
| Net (loss) earnings per share attributable to common stockholders | ||||||||||||||||||||||||||
| Basic | $ | (0.35 | ) | $ | 0.04 | $ | (0.83 | ) | $ | 0.03 | ||||||||||||||||
| Diluted | $ | (0.35 | ) | $ | 0.04 | $ | (0.83 | ) | $ | 0.03 | ||||||||||||||||
| Non-GAAP net (loss) earnings per share attributable to common stockholders (2) | $ | (0.23 | ) | $ | 0.08 | $ | (0.64 | ) | $ | 0.11 | ||||||||||||||||
| Weighted average basic shares outstanding | 303,414,676 | 647,149,537 | 305,626,028 | 645,072,582 | ||||||||||||||||||||||
| Weighted average diluted shares outstanding | 303,414,676 | 663,122,709 | 305,626,028 | 663,230,558 | ||||||||||||||||||||||
| Weighted average diluted shares for non-GAAP net (loss) earnings per share (3) | 303,414,676 | 663,122,709 | 305,626,028 | 663,230,558 | ||||||||||||||||||||||
| (1) Represents change in financial measures that would have resulted had average exchange rates in the reported period been the same as those in effect in the three and six months ended June 30, 2011. |
| (2) Non-GAAP net (loss) income attributable to common stockholders is a non-GAAP financial measure. This measure excludes stock-based compensation and acquisition-related costs. See ‘‘Non-GAAP Reconciliation Schedule’’ for a reconciliation of this measure to the most applicable financial measure under U.S. GAAP. |
| (3) The weighted-average diluted shares outstanding is calculated using the weighted-average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock units and restricted shares, as calculated using the treasury stock method. |
Highlights
- Continued North American revenue growth. North American revenues grew 66% year-over-year.
- Rapid growth in Groupon Goods. Groupon Goods surpassed the $200 million annual revenue run-rate in the second quarter 2012, in just its third quarter since launch in North America.
- Improved marketing efficiencies. Customer acquisition costs improved 43% year-over-year, enabling the reduction of marketing spend by 58% compared with the second quarter 2011.
- Solid growth in active customers. As of June 30, 2012, Groupon had 38.0 million active customers, an increase of 65% year-over-year.
- Record number of unique merchants featured. For the second straight quarter, Groupon featured more than 100,000 unique merchants, with second quarter 2012 merchants featured achieving a new record level.
- Mobile adoption increasing and transaction activity remains high. In July 2012, nearly one third of North American transactions were completed on mobile devices, an increase of over 35% compared with July 2011.
- Merchant support tools gaining traction. In the second quarter 2012, nearly 20% of merchants featured were utilizing one or more of Groupon's merchant tools, compared with 10% in the first quarter 2012.
- Launched new GrouponWorks site. The Company recently launched an updated site for merchants, featuring over 500 merchant videos on how to work with Groupon. (http://www.grouponworks.com/)
Third Quarter 2012 Outlook
Revenue for the third quarter 2012 is expected to be between $580 million and $620 million, an increase of between 35% and 44% compared with the third quarter 2011.
Income from operations for the third quarter 2012 is expected to be between $15 million and $35 million, compared with a loss from operations of $0.2 million in the third quarter 2011. This outlook includes approximately $30 million of stock-based compensation. The outlook further assumes no acquisitions or investments, or material changes in foreign exchange rates.
A conference call will be webcast live today at 4:00 p.m. CT / 5:00 p.m. ET, and will be available on Groupon’s investor relations website at http://investor.groupon.com. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.
Non-GAAP Financial Measures
This release includes the following non-GAAP financial measures: non-GAAP net (loss) income attributable to common stockholders and free cash flow. The Supplemental Financial Information Table and Business Metrics also includes operating income and operating margin, in each case excluding stock-based compensation and acquisition-related expenses. Free cash flow and non-GAAP net (loss) income attributable to common stockholders may be different from similar measures used by other companies. Groupon believes that these non-GAAP measures are useful because they provide for more meaningful comparisons of period-to-period results by excluding certain non-cash charges that Groupon believes are not driven by core operating results. However, these non-GAAP measures are not intended to be a substitute for cash flows from operations or net income, and are not intended to represent the total increase or decrease in Groupon’s cash balance for the applicable period. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. These non-GAAP measures should only be used to evaluate Groupon’s results of operations in conjunction with the corresponding GAAP measures. For a reconciliation of these non-GAAP financial measures to the nearest comparable U.S. GAAP measures, see “Non-GAAP Reconciliation Schedule” included in this release.
Non-GAAP net income excludes from GAAP net income stock-based compensation and acquisition-related expenses. Free cash flow represents operating cash flow less purchases of property and equipment. The non-GAAP measures included in this release are adjusted by excluding the items below:
Stock-based compensation expense: Stock-based compensation is excluded because it is a non-cash expense. It is, however, reflected in earnings per share, as it is incorporated in sharecount.
Acquisition-related expense: Acquisition-related costs that are non-cash in nature are excluded. The timing and nature of these expenses are unpredictable, the benefits of an acquisition may not be realized in the quarter in which the acquisition occurs, and Groupon believes that they do not provide for meaningful period-to-period comparisons.
Property and Equipment: Purchases of property and equipment are subtracted from operating cash flow in the calculation of free cash flow because Groupon believes that this is more aligned with an analysis of ongoing business operations, as purchases of fixed assets, software developed for internal use, and website development costs are necessary components of ongoing operations.
Included in the tables below are reconciliations of each of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
Note on Forward Looking Statements
The statements in this release that refer to plans and expectations for the next quarter or the future are forward-looking statements that involve a number of risks and uncertainties, and actual results could differ materially from those discussed. The risks and uncertainties that could cause results to differ materially from those included in the forward-looking statements include, but are not limited to, Groupon’s ability to continue to expand the business and continue revenue growth; risks related to Groupon’s business strategy; Groupon’s ability to manage the growth of the organization; responding to changes in the markets in which Groupon competes for business; retaining existing merchant partners and adding new merchant partners; competing against smaller competitors and competitors with more financial resources; developing new product and service offerings that are appealing to customers; maintaining a strong brand; effectively dealing with challenges arising from Groupon’s international operations; integrating Groupon’s technology platforms; managing refund risks; retaining the executive team; litigation; regulations, including the CARD Act and regulation of the Internet; tax liabilities; tax legislation; maintaining Groupon’s information technology infrastructure; security breaches; protecting Groupon’s intellectual property; handling acquisitions, joint ventures and strategic investments effectively; seasonality; payment-related risks; customer and merchant partner fraud; global economic uncertainty; compliance with rules and regulations associated with being a public company; and Groupon’s ability to raise capital if necessary. Groupon urges you to refer to the factors included under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K, and subsequent quarterly reports, copies of which may be obtained by visiting the company’s Investor Relations web site at http://investor.groupon.com or the SEC’s web site at www.sec.gov. Groupon’s actual results could differ materially from those predicted or implied, and reported results should not be considered an indication of future performance.
You should not rely upon forward-looking statements as predictions of future events. Although Groupon believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither the company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. The forward-looking statements reflect Groupon’s expectations as of August 13, 2012. Groupon undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this earnings release to conform these statements to actual results or to changes in its expectations.
Groupon encourages investors to use its investor relations website as a way of easily finding information about the company. Groupon promptly makes available on this website, free of charge, the reports that the company files or furnishes with the SEC, corporate governance information (including Groupon’s Global Code of Conduct), and select press releases and social media postings.
| Groupon, Inc. | ||||||||||||||||
| Consolidated Statement of Cash Flows | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2011 | 2012 | 2011 | 2012 | |||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
| Operating activities | ||||||||||||||||
| Net (loss) income | $ | (109,776 | ) | $ | 33,549 | $ | (223,667 | ) | $ | 29,956 | ||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||||||||||
| Depreciation and amortization | 8,098 | 12,810 | 15,696 | 24,526 | ||||||||||||
| Stock-based compensation | 38,718 | 27,084 | 57,582 | 55,087 | ||||||||||||
| Deferred income taxes | 1,147 | 13,873 | (2,237 | ) | 12,997 | |||||||||||
| Excess tax benefits on stock based compensation | (3,532 | ) | (18,869 | ) | (3,532 | ) | (21,750 | ) | ||||||||
| Loss on equity method investees | 7,881 | 3,428 | 8,763 | 8,556 | ||||||||||||
| Acquisition-related | - | (1,739 | ) | - | (1,687 | ) | ||||||||||
| Gain on sale of investment | - | (56,032 | ) | - | (56,032 | ) | ||||||||||
| Change in assets and liabilities, net of acquisitions: | ||||||||||||||||
| Restricted cash | (1,025 | ) | (1,471 | ) | (1,025 | ) | (2,828 | ) | ||||||||
| Accounts receivable | (37,023 | ) | 19,963 | (53,072 | ) | 8,085 | ||||||||||
| Prepaid expenses and other current assets | (8,933 | ) | (17,624 | ) | (17,221 | ) | (21,745 | ) | ||||||||
| Accounts payable | 8,091 | 20,089 | (14,374 | ) | 18,268 | |||||||||||
| Accrued merchant payable | 95,697 | (13,979 | ) | 216,870 | 32,021 | |||||||||||
| Accrued expenses and other current liabilities | 38,508 | 49,657 | 74,756 | 63,077 | ||||||||||||
| Other, net | 1,168 | 4,576 | (1,580 | ) | 10,498 | |||||||||||
| Net cash provided by operating activities | 39,019 | 75,315 | 56,959 | 159,029 | ||||||||||||
| Investing activities | ||||||||||||||||
| Purchases of property and equipment | (10,240 | ) | (26,709 | ) | (21,202 | ) | (39,792 | ) | ||||||||
| Acquisitions of businesses, net of acquired cash | (878 | ) | (17,267 | ) | (3,696 | ) | (40,271 | ) | ||||||||
| Purchases of intangible assets | (58 | ) | - | (272 | ) | (10 | ) | |||||||||
| Purchases of investments in subsidiaries | (9,387 | ) | (6,080 | ) | (34,387 | ) | (13,427 | ) | ||||||||
| Purchases of cost and equity method investments | (4,621 | ) | (10,097 | ) | (9,921 | ) | (13,097 | ) | ||||||||
| Net cash used in investing activities | (25,184 | ) | (60,153 | ) | (69,478 | ) | (106,597 | ) | ||||||||
| Financing activities | ||||||||||||||||
| Proceeds from issuance of stock, net of issuance costs | - | - | 509,692 | - | ||||||||||||
| Excess tax benefits on stock based compensation | 3,532 | 18,869 | 3,532 | 21,750 | ||||||||||||
| Tax withholdings related to net share settlements of restricted stock units | - | 964 | - | (5,668 | ) | |||||||||||
| Payments of contingent acquisition liability | - | - | - | (4,250 | ) | |||||||||||
| Repayments of loans to related parties | - | - | (14,358 | ) | - | |||||||||||
| Repurchase of common stock | (5,000 | ) | - | (353,550 | ) | - | ||||||||||
| Proceeds from exercise of stock options | 909 | 5,279 | 1,234 | 5,657 | ||||||||||||
| Proceeds from the sale of common stock | 137 | - | 137 | - | ||||||||||||
| Partnership distributions to noncontrolling interest holders | - | (954 | ) | - | (1,606 | ) | ||||||||||
| Redemption of preferred stock | - | - | (35,003 | ) | - | |||||||||||
| Net cash provided by financing activities | (422 | ) | 24,158 | 111,684 | 15,883 | |||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 2,992 | (14,511 | ) | 7,095 | (5,452 | ) | ||||||||||
| Net increase in cash and cash equivalents | 16,405 | 24,809 | 106,260 | 62,863 | ||||||||||||
| Cash and cash equivalents, beginning of the period | 208,688 | 1,160,989 | 118,833 | 1,122,935 | ||||||||||||
| Cash and cash equivalents, end of the period | $ | 225,093 | $ | 1,185,798 | $ | 225,093 | $ | 1,185,798 | ||||||||
| Supplemental disclosure of cash flow information | ||||||||||||||||
| Non-cash investing activity | ||||||||||||||||
| Contingent consideration in connection with acquisitions | $ | - | $ | - | $ | 15,920 | $ | 421 | ||||||||
| Contribution of investment in E-Commerce transaction | $ | - | $ | 47,042 | $ | - | $ | 47,042 | ||||||||
| Liability incurred in E-Commerce transaction | $ | - | $ | 20,000 | $ | - | $ | 20,000 | ||||||||
| Groupon, Inc. | ||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2011 | 2012 | 2011 | 2012 | |||||||||||||
|
(dollars in thousands, except |
(dollars in thousands, except |
|||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
| (Restated)(1) | ||||||||||||||||
| Third party and other revenue | $ | 392,582 | $ | 502,985 | $ | 688,105 | $ | 1,043,038 | ||||||||
| Direct revenue | - | 65,350 | - | 84,580 | ||||||||||||
| Total revenue | 392,582 | 568,335 | 688,105 | 1,127,618 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of revenue | 54,803 | 135,184 | 94,568 | 254,682 | ||||||||||||
| Marketing | 212,739 | 88,407 | 442,824 | 205,022 | ||||||||||||
| Selling, general and administrative | 226,067 | 299,894 | 368,888 | 583,477 | ||||||||||||
| Acquisition-related | - | (1,635 | ) | - | (1,687 | ) | ||||||||||
| Total operating expenses | 493,609 | 521,850 | 906,280 | 1,041,494 | ||||||||||||
| (Loss) income from operations | (101,027 | ) | 46,485 | (218,175 | ) | 86,124 | ||||||||||
| Interest and other income, net | 479 | 57,367 | 1,539 | 53,828 | ||||||||||||
| Loss on equity method investees | (7,881 | ) | (3,428 | ) | (8,763 | ) | (8,556 | ) | ||||||||
| (Loss) income before provision for income taxes | (108,429 | ) | 100,424 | (225,399 | ) | 131,396 | ||||||||||
| Provision (benefit) for income taxes | 1,347 | 66,875 | (1,732 | ) | 101,440 | |||||||||||
| Net (loss) income | (109,776 | ) | 33,549 | (223,667 | ) | 29,956 | ||||||||||
| Less: Net loss (income) attributable to noncontrolling interests | 8,536 | (1,220 | ) | 19,759 | (2,100 | ) | ||||||||||
| Net (loss) income attributable to Groupon, Inc. | $ | (101,240 | ) | $ | 32,329 | $ | (203,908 | ) | $ | 27,856 | ||||||
| Redemption of preferred stock in excess of carrying value | - | - | (34,327 | ) | - | |||||||||||
| Adjustment of redeemable noncontrolling interests to redemption value | (6,166 | ) | (3,943 | ) | (15,651 | ) | (11,165 | ) | ||||||||
| Net (loss) income attributable to common stockholders | $ | (107,406 | ) | $ | 28,386 | $ | (253,886 | ) | $ | 16,691 | ||||||
| Net (loss) earnings per share attributable to common stockholders | ||||||||||||||||
| Basic | $ | (0.35 | ) | $ | 0.04 | $ | (0.83 | ) | $ | 0.03 | ||||||
| Diluted | $ | (0.35 | ) | $ | 0.04 | $ | (0.83 | ) | $ | 0.03 | ||||||
| Weighted average number of shares outstanding | ||||||||||||||||
| Basic | 303,414,676 | 647,149,537 | 305,626,028 | 645,072,582 | ||||||||||||
| Diluted | 303,414,676 | 663,122,709 | 305,626,028 | 663,230,558 | ||||||||||||
(1) The Company restated the Condensed Consolidated Statements of Operations for the six months ended June 30, 2011, included in the Form S-1 filed with the SEC on September 23, 2011, to correct for an error in its presentation of certain income statement expenses. These changes were to be consistent with the Company's election to report revenue on a net basis. As a result, a portion of technology costs and editorial costs have been reclassified to cost of revenue from selling, general and administrative expense for the six months ended June 30, 2011. In addition, costs associated with the Company’s marketing staff, including payroll, benefits and stock compensation, have been reclassified to marketing for the six months ended June 30, 2011 from selling, general and administrative. The change in presentation had no effect on pre-tax loss, net loss or any per share amounts for the period.
| Groupon, Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| December 31, | June 30, | |||||||
| 2011 | 2012 | |||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,122,935 | $ | 1,185,798 | ||||
| Accounts receivable, net | 108,747 | 98,673 | ||||||
| Prepaid expenses and other current assets | 91,645 | 116,141 | ||||||
|
Total current assets |
1,323,327 | 1,400,612 | ||||||
| Property and equipment, net of accumulated depreciation of $14,627 and $28,147, respectively | 51,800 | 83,293 | ||||||
| Goodwill | 166,903 | 192,018 | ||||||
| Intangible assets, net | 45,667 | 54,303 | ||||||
| Investments in equity interests | 50,604 | 131,177 | ||||||
| Deferred income taxes, non-current | 46,104 | 45,517 | ||||||
| Other non-current assets | 90,071 | 76,178 | ||||||
| Total Assets | $ | 1,774,476 | $ | 1,983,098 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 40,918 | $ | 60,364 | ||||
| Accrued merchant payables | 520,723 | 543,840 | ||||||
| Accrued expenses | 212,007 | 258,343 | ||||||
| Deferred income taxes, current | 76,841 | 73,942 | ||||||
| Other current liabilities | 144,673 | 163,692 | ||||||
| Total current liabilities | 995,162 | 1,100,181 | ||||||
| Deferred income taxes, non-current | 7,428 | 25,837 | ||||||
| Other non-current liabilities | 70,766 | 74,773 | ||||||
| Total Liabilities | 1,073,356 | 1,200,791 | ||||||
| Redeemable noncontrolling interests | 1,653 | 5,943 | ||||||
| Groupon, Inc. Stockholders' Equity | ||||||||
| Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized, 641,745,225 shares issued and outstanding at December 31, 2011; 2,000,000,000 shares authorized, 649,165,744 shares issued and outstanding at June 30, 2012 | 64 | 65 | ||||||
| Class B common stock, par value $0.0001 per share, 10,000,000 shares authorized, 2,399,976 shares issued and outstanding at December 31, 2011 and June 30, 2012 | - | - | ||||||
| Common stock, par value $0.0001 per share, 2,010,000 shares authorized, and no shares issued and outstanding as of December 31, 2011 and June 30, 2012 | - | - | ||||||
| Additional paid-in capital | 1,388,253 | 1,437,327 | ||||||
| Stockholder receivable | - | (166 | ) | |||||
| Accumulated deficit | (698,704 | ) | (670,848 | ) | ||||
| Accumulated other comprehensive income | 12,928 | 12,937 | ||||||
| Total Groupon, Inc. Stockholders' Equity | 702,541 | 779,315 | ||||||
| Noncontrolling interests | (3,074 | ) | (2,951 | ) | ||||
| Total Equity | 699,467 | 776,364 | ||||||
| Total Liabilities and Equity | $ | 1,774,476 | $ | 1,983,098 | ||||
| Groupon, Inc. | ||||||||||||||||||||
| Segment Information | ||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||
| 2011 | 2012 | 2011 | 2012 | |||||||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||
| North America | ||||||||||||||||||||
| Revenue | $ | 157,205 | $ | 260,181 | $ | 293,817 | $ | 498,746 | ||||||||||||
| Segment operating expenses(1) | 167,706 | 216,752 | 326,096 | 415,145 | ||||||||||||||||
| Segment operating (loss) income | (10,501 | ) | 43,429 | (32,279 | ) | 83,601 | ||||||||||||||
| Segment (loss) income as a percent of segment revenue | (6.7 | ) | % | 16.7 | % | (11.0 | ) | % | 16.8 | % | ||||||||||
| International | ||||||||||||||||||||
| Revenue | $ | 235,377 | $ | 308,154 | $ | 394,288 | $ | 628,872 | ||||||||||||
| Segment operating expenses(1) | 287,185 | 279,649 | 522,602 | 572,949 | ||||||||||||||||
| Segment operating (loss) income | (51,808 | ) | 28,505 | (128,314 | ) | 55,923 | ||||||||||||||
| Segment (loss) income as a percent of segment revenue | (22.0 | ) | % | 9.3 | % | (32.5 | ) | % | 8.9 | % | ||||||||||
| Consolidated | ||||||||||||||||||||
| Revenue | $ | 392,582 | $ | 568,335 | $ | 688,105 | $ | 1,127,618 | ||||||||||||
| Segment operating expenses(1) | 454,891 | 496,401 | 848,698 | 988,094 | ||||||||||||||||
| Segment operating (loss) income | (62,309 | ) | 71,934 | (160,593 | ) | 139,524 | ||||||||||||||
| Segment (loss) income as a percent of segment revenue | (15.9 | ) | % | 12.7 | % | (23.3 | ) | % | 12.4 | % | ||||||||||
| Stock-based compensation | (38,718 | ) | (27,084 | ) | (57,582 | ) | (55,087 | ) | ||||||||||||
| Acquisition-related | - | 1,635 | - | 1,687 | ||||||||||||||||
| Operating (loss) income | (101,027 | ) | 46,485 | (218,175 | ) | 86,124 | ||||||||||||||
| Interest and other income, net | 479 | 57,367 | 1,539 | 53,828 | ||||||||||||||||
| Loss on equity method investees | (7,881 | ) | (3,428 | ) | (8,763 | ) | (8,556 | ) | ||||||||||||
| (Loss) income before income taxes | (108,429 | ) | 100,424 | (225,399 | ) | 131,396 | ||||||||||||||
| Provision (benefit) for income taxes | 1,347 | 66,875 | (1,732 | ) | 101,440 | |||||||||||||||
| Net (loss) income | $ | (109,776 | ) | $ | 33,549 | $ | (223,667 | ) | $ | 29,956 | ||||||||||
(1) Represents operating expenses, excluding stock-based compensation and acquisition-related expense, which are not allocated to segments.
| Foreign Exchange Rate Neutral Operating Results | ||||||||||||||||||||
| The effect on the Company's consolidated statements of operations from changes in exchange rates versus the U.S. Dollar for the three months ended June 30, 2012 are as follows: | ||||||||||||||||||||
| Three Months Ended | Three Months Ended | |||||||||||||||||||
| June 30, 2012 | June 30, 2012 | |||||||||||||||||||
| At Avg. | Exchange | At Avg. | Exchange | |||||||||||||||||
| Q2 2011 | Rate | As | Q1 2012 | Rate | As | |||||||||||||||
| Rates (1) | Effect (2) | Reported | Rates (3) | Effect (2) | Reported | |||||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||||
| Revenue | $ | 600,764 | $ | (32,429 | ) | $ | 568,335 | $ | 576,626 | $ | (8,291 | ) | $ | 568,335 | ||||||
| Income from operations | $ | 46,688 | $ | (203 | ) | $ | 46,485 | $ | 45,519 | $ | 966 | $ | 46,485 | |||||||
| The effect on the Company's consolidated statements of operations from changes in exchange rates versus the U.S. Dollar for the six months ended June 30, 2012 are as follows: | ||||||||||||||||||||
| Six Months Ended | Six Months Ended | |||||||||||||||||||
| June 30, 2012 | June 30, 2012 | |||||||||||||||||||
| At Avg. | Exchange | At Avg. | Exchange | |||||||||||||||||
| Q2 2011 YTD | Rate | As | Q4 '11 - Q1 '12 | Rate | As | |||||||||||||||
| Rates (1) | Effect (2) | Reported | Rates (3) | Effect (2) | Reported | |||||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||||
| Revenue | $ | 1,187,851 | $ | (60,233 | ) | $ | 1,127,618 | $ | 1,138,103 | $ | (10,485 | ) | $ | 1,127,618 | ||||||
| Income from operations | $ | 87,368 | $ | (1,244 | ) | $ | 86,124 | $ | 85,599 | $ | 525 | $ | 86,124 | |||||||
| (1) | Represents the outcome that would have resulted had average exchange rates in the reported period been the same as those in effect during the three and six months ended June 30, 2011. | |
| (2) | Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable period for operating results. | |
| (3) | Represents the outcome that would have resulted had average exchange rates in the reported period been the same as those in effect during the three and six months ended March 31, 2012. | |
| Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||
| Free Cash Flow | ||||||||||||||||
| The following is a reconciliation of free cash flow to the most comparable U.S. GAAP measure, ‘‘Net cash provided by operating activities,’’ for the three and six months ended June 30, 2011 and 2012: | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2011 | 2012 | 2011 | 2012 | |||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
| Net cash provided by operating activities | $ | 39,019 | $ | 75,315 | $ | 56,959 | $ | 159,029 | ||||||||
| Purchases of property and equipment | (10,240 | ) | (26,709 | ) | (21,202 | ) | (39,792 | ) | ||||||||
| Free cash flow | $ | 28,779 | $ | 48,606 | $ | 35,757 | $ | 119,237 | ||||||||
| Net cash used in investing activities | $ | (25,184 | ) | $ | (60,153 | ) | $ | (69,478 | ) | $ | (106,597 | ) | ||||
| Net cash provided in financing activities | $ | (422 | ) | $ | 24,158 | $ | 111,684 | $ | 15,883 | |||||||
| Non-GAAP Reconciliation Schedule | ||||||||||||||||||||||||||||||||||||||
| (dollars in thousands, except share and per share data) | ||||||||||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||||||||||
| Quarterly Non-GAAP Reconciliation | ||||||||||||||||||||||||||||||||||||||
| Revenue | Cost of Revenue | Marketing | SG&A | Acq-Related | Total OpEx | Operating Income (Loss) | Net Income (Loss) attributable to common stockholders | Sharecount | Diluted EPS (1) | |||||||||||||||||||||||||||||
| Three months ended June 30, 2012 | ||||||||||||||||||||||||||||||||||||||
| GAAP | $ | 568,335 | $ | 135,184 | $ | 88,407 | $ | 299,894 | $ | (1,635 | ) | $ | 521,850 | $ | 46,485 | $ | 28,386 | 663,122,709 | $ | 0.04 | ||||||||||||||||||
| Stock-based compensation (2) | - | (1,015 | ) | (646 | ) | (25,423 | ) | - | (27,084 | ) | 27,084 | 27,084 | - | 0.04 | ||||||||||||||||||||||||
| Acquisition-related charges (3) | - | - | - | - | 1,635 | 1,635 | (1,635 | ) | (1,635 | ) | - | - | ||||||||||||||||||||||||||
| Non-GAAP | $ | 568,335 | $ | 134,169 | $ | 87,761 | $ | 274,471 | $ | - | $ | 496,401 | $ | 71,934 | $ | 53,835 | 663,122,709 | $ | 0.08 | |||||||||||||||||||
| Three months ended March 31, 2012 | ||||||||||||||||||||||||||||||||||||||
| GAAP | $ | 559,283 | $ | 119,498 | $ | 116,615 | $ | 283,583 | $ | (52 | ) | $ | 519,644 | $ | 39,639 | $ | (11,695 | ) | 644,097,375 | $ | (0.02 | ) | ||||||||||||||||
| Stock-based compensation (2) | - | (482 | ) | (726 | ) | (26,795 | ) | - | (28,003 | ) | 28,003 | 28,003 | - | 0.04 | ||||||||||||||||||||||||
| Acquisition-related charges (3) | - | - | - | - | 52 | 52 | (52 | ) | (52 | ) | - | (0.00 | ) | |||||||||||||||||||||||||
| Non-GAAP | $ | 559,283 | $ | 119,016 | $ | 115,889 | $ | 256,788 | $ | - | $ | 491,693 | $ | 67,590 | $ | 16,256 | 663,665,615 | ((1 | )) | $ | 0.02 | |||||||||||||||||
| Three months ended December 31, 2011 | ||||||||||||||||||||||||||||||||||||||
| GAAP | $ | 492,164 | $ | 96,265 | $ | 155,299 | $ | 255,316 | $ | 256 | $ | 507,136 | $ | (14,972 | ) | $ | (65,379 | ) | 528,421,712 | $ | (0.12 | ) | ||||||||||||||||
| Stock-based compensation (2) | - | (650 | ) | (1,492 | ) | (30,526 | ) | - | (32,668 | ) | 32,668 | 32,668 | - | 0.06 | ||||||||||||||||||||||||
| Acquisition-related charges (3) | - | - | - | - | (256 | ) | (256 | ) | 256 | 256 | - | - | ||||||||||||||||||||||||||
| Non-GAAP | $ | 492,164 | $ | 95,615 | $ | 153,807 | $ | 224,790 | $ | - | $ | 474,212 | $ | 17,952 | $ | (32,455 | ) | 528,421,712 | $ | (0.06 | ) | |||||||||||||||||
| Three months ended September 30, 2011 | ||||||||||||||||||||||||||||||||||||||
| GAAP | $ | 430,161 | $ | 68,046 | $ | 170,349 | $ | 196,798 | $ | (4,793 | ) | $ | 430,400 | $ | (239 | ) | $ | (54,229 | ) | 307,605,060 | $ | (0.18 | ) | |||||||||||||||
| Stock-based compensation (2) | - | (56 | ) | (53 | ) | (3,231 | ) | - | (3,340 | ) | 3,340 | 3,340 | - | 0.01 | ||||||||||||||||||||||||
| Acquisition-related charges (3) | - | - | - | - | 4,793 | 4,793 | (4,793 | ) | (4,793 | ) | - | (0.01 | ) | |||||||||||||||||||||||||
| Non-GAAP | $ | 430,161 | $ | 67,990 | $ | 170,296 | $ | 193,567 | $ | - | $ | 431,853 | $ | (1,692 | ) | $ | (55,682 | ) | 307,605,060 | $ | (0.18 | ) | ||||||||||||||||
| Three months ended June 30, 2011 | ||||||||||||||||||||||||||||||||||||||
| GAAP | $ | 392,582 | $ | 54,803 | $ | 212,739 | $ | 226,067 | $ | - | $ | 493,609 | $ | (101,027 | ) | $ | (107,406 | ) | 303,414,676 | $ | (0.35 | ) | ||||||||||||||||
| Stock-based compensation (2) | - | (212 | ) | (493 | ) | (38,013 | ) | - | (38,718 | ) | 38,718 | 38,718 | - | 0.12 | ||||||||||||||||||||||||
| Acquisition-related charges (3) | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
| Non-GAAP | $ | 392,582 | $ | 54,591 | $ | 212,246 | $ | 188,054 | $ | - | $ | 454,891 | $ | (62,309 | ) | $ | (68,688 | ) | 303,414,676 | $ | (0.23 | ) | ||||||||||||||||
| Three months ended March 31, 2011 (Restated)(4) | ||||||||||||||||||||||||||||||||||||||
| GAAP | $ | 295,523 | $ | 39,765 | $ | 230,085 | $ | 142,821 | $ | - | $ | 412,671 | $ | (117,148 | ) | $ | (146,480 | ) | 307,849,412 | $ | (0.48 | ) | ||||||||||||||||
| Stock-based compensation (2) | - | (212 | ) | (493 | ) | (18,159 | ) | - | (18,864 | ) | 18,864 | 18,864 | - | 0.07 | ||||||||||||||||||||||||
| Acquisition-related charges (3) | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
| Non-GAAP | $ | 295,523 | $ | 39,553 | $ | 229,592 | $ | 124,662 | $ | - | $ | 393,807 | $ | (98,284 | ) | $ | (127,616 | ) | 307,849,412 | $ | (0.41 | ) | ||||||||||||||||
| Year-to-Date Non-GAAP Reconciliation | ||||||||||||||||||||||||||||||||||||||
| Revenue | Cost of Revenue | Marketing | SG&A | Acq-Related | Total OpEx | Operating Income (Loss) | Net Income (Loss) attributable to common stockholders | Sharecount | Diluted EPS (1) | |||||||||||||||||||||||||||||
| Six months ended June 30, 2012 | ||||||||||||||||||||||||||||||||||||||
| GAAP | $ | 1,127,618 | $ | 254,682 | $ | 205,022 | $ | 583,477 | $ | (1,687 | ) | $ | 1,041,494 | $ | 86,124 | $ | 16,691 | 663,230,558 | $ | 0.03 | ||||||||||||||||||
| Stock-based compensation (2) | - | (1,497 | ) | (1,372 | ) | (52,218 | ) | - | (55,087 | ) | 55,087 | 55,087 | - | 0.08 | ||||||||||||||||||||||||
| Acquisition-related charges (3) | - | - | - | - | 1,687 | 1,687 | (1,687 | ) | (1,687 | ) | - | - | ||||||||||||||||||||||||||
| Non-GAAP | $ | 1,127,618 | $ | 253,185 | $ | 203,650 | $ | 531,259 | $ | - | $ | 988,094 | $ | 139,524 | $ | 70,091 | 663,230,558 | $ | 0.11 | |||||||||||||||||||
| Six months ended June 30, 2011 (Restated)(4) | ||||||||||||||||||||||||||||||||||||||
| GAAP | $ | 688,105 | $ | 94,568 | $ | 442,824 | $ | 368,888 | $ | - | $ | 906,280 | $ | (218,175 | ) | $ | (253,886 | ) | 305,626,028 | $ | (0.83 | ) | ||||||||||||||||
| Stock-based compensation (2) | - | (424 | ) | (986 | ) | (56,172 | ) | - | (57,582 | ) | 57,582 | 57,582 | - | 0.19 | ||||||||||||||||||||||||
| Acquisition-related charges (3) | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
| Non-GAAP | $ | 688,105 | $ | 94,144 | $ | 441,838 | $ | 312,716 | $ | - | $ | 848,698 | $ | (160,593 | ) | $ | (196,304 | ) | 305,626,028 | $ | (0.64 | ) | ||||||||||||||||
| Annual Non-GAAP Reconciliation | ||||||||||||||||||||||||||||||||||||||
| Revenue | Cost of Revenue | Marketing | SG&A | Acq-Related | Total OpEx | Operating Income (Loss) | Net Income (Loss) attributable to common stockholders | Sharecount | Diluted EPS (1) | |||||||||||||||||||||||||||||
| Twelve months ended December 31, 2011 | ||||||||||||||||||||||||||||||||||||||
| GAAP | $ | 1,610,430 | $ | 258,879 | $ | 768,472 | $ | 821,002 | $ | (4,537 | ) | $ | 1,843,816 | $ | (233,386 | ) | $ | (373,494 | ) | 362,261,324 | $ | (1.03 | ) | |||||||||||||||
| Stock-based compensation (2) | - | (1,130 | ) | (2,531 | ) | (89,929 | ) | - | (93,590 | ) | 93,590 | 93,590 | - | 0.25 | ||||||||||||||||||||||||
| Acquisition-related charges (3) | - | - | - | - | 4,537 | 4,537 | (4,537 | ) | (4,537 | ) | - | (0.01 | ) | |||||||||||||||||||||||||
| Non-GAAP | $ | 1,610,430 | $ | 257,749 | $ | 765,941 | $ | 731,073 | $ | - | $ | 1,754,763 | $ | (144,333 | ) | $ | (284,441 | ) | 362,261,324 | $ | (0.79 | ) | ||||||||||||||||
| Twelve months ended December 31, 2010 | ||||||||||||||||||||||||||||||||||||||
| GAAP | $ | 312,941 | $ | 42,896 | $ | 290,569 | $ | 196,637 | $ | 203,183 | $ | 733,285 | $ | (420,344 | ) | $ | (456,320 | ) | 342,698,772 | $ | (1.33 | ) | ||||||||||||||||
| Stock-based compensation (2) | - | (157 | ) | (129 | ) | (35,882 | ) | - | (36,168 | ) | 36,168 | 36,168 | - | 0.11 | ||||||||||||||||||||||||
| Acquisition-related charges (3) | - | - | - | - | (203,183 | ) | (203,183 | ) | 203,183 | 203,183 | - | 0.59 | ||||||||||||||||||||||||||
| Non-GAAP | $ | 312,941 | $ | 42,739 | $ | 290,440 | $ | 160,755 | $ | - | $ | 493,934 | $ | (180,993 | ) | $ | (216,969 | ) | 342,698,772 | $ | (0.63 | ) | ||||||||||||||||
| Twelve months ended December 31, 2009 | ||||||||||||||||||||||||||||||||||||||
| GAAP | $ | 14,540 | $ | 4,716 | $ | 5,053 | $ | 5,848 | $ | - | $ | 15,617 | $ | (1,077 | ) | $ | (6,916 | ) | 337,208,284 | $ | (0.02 | ) | ||||||||||||||||
| Stock-based compensation (2) | - | - | - | (115 | ) | - | (115 | ) | 115 | 115 | - | - | ||||||||||||||||||||||||||
| Acquisition-related charges (3) | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
| Non-GAAP | $ | 14,540 | $ | 4,716 | $ | 5,053 | $ | 5,733 | $ | - | $ | 15,502 | $ | (962 | ) | $ | (6,801 | ) | 337,208,284 | $ | (0.02 | ) | ||||||||||||||||
| (1) | Per U.S. GAAP, Diluted EPS is calculated using the weighted-average diluted shares outstanding rather than weighted-average basic shares outstanding. The weighted-average diluted shares outstanding is calculated using the weighted-average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock units and restricted shares, as calculated using the treasury stock method. | |
| (2) | Represents non-cash stock-based compensation expense recorded within selling, general and administrative expenses, marketing expenses and cost of revenue on the income statement. | |
| (3) | Primarily represents non-cash charges for measurement of the fair value of contingent consideration related to acquisitions made since 2010. | |
| (4) |
The Company restated the Condensed Consolidated Statements of Operations for the three months ended March 31, 2011, included in the Form S-1 filed with the SEC on June 2, 2011, to correct for an error in its presentation of revenue. Most significantly, the Company restated its reporting of revenue from Groupons to be net of the amounts related to merchant fees. Historically, the Company reported the gross amounts billed to its subscribers as revenue. The Condensed Consolidated Statement of Operations for the three months ended March 31, 2011, was restated to show the net amount the Company retains after paying the merchant fees. The effect of the correction resulted in a reduction of previously reported revenue and corresponding reductions in cost of revenue in those periods. The change in presentation had no effect on pre-tax loss, net loss or any per share amounts for the period.
The Company also changed the presentation of certain other income statement expenses for the three months ended March 31, 2011, to be consistent with reporting revenue on a net basis. These changes included presenting loyalty programs as a component of marketing rather than as an offset to revenue. The Company believes that this classification is most appropriate as it is acting as an agent on behalf of the merchant in driving traffic to generate revenue. In addition, refunds made to customers which are not recovered by the merchant are presented as a component of cost of revenue, rather than as an offset to revenue, as these amounts are not paid directly to the merchants.
A portion of technology costs and editorial costs were reclassified to cost of revenue from selling, general and administrative for the three months ended March 31, 2011.
Costs associated with the Company’s marketing staff, including payroll, benefits and stock compensation, were reclassified to marketing for the three months ended March 31, 2011, from selling general and administrative.
Additionally, the Company restated the Condensed Consolidated Statements of Operations for the six months ended June 30, 2011, included in the Form S-1 filed with the SEC on September 23, 2011, to correct for an error in its presentation of certain income statement expenses. These changes were to be consistent with the Company's election to report revenue on a net basis. As a result, a portion of technology costs and editorial costs have been reclassified to cost of revenue from selling, general and administrative expense for the six months ended June 30, 2011. In addition, costs associated with the Company’s marketing staff, including payroll, benefits and stock compensation, have been reclassified to marketing for the six months ended June 30, 2011 from selling, general and administrative. The change in presentation had no effect on pre-tax loss, net loss or any per share amounts for the period. |
|
| Supplemental Financial Information and Business Metrics | |||||||||||||||||||||||||||||
| (in thousands, except percentages, per share and headcount data and TTM Gross Billings / Average Active Customer) | |||||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||||
| Q1 2011 (7) | Q2 2011 | Q3 2011 | Q4 2011 | Q1 2012 | Q2 2012 | ||||||||||||||||||||||||
| (Restated)(12) | |||||||||||||||||||||||||||||
| Consolidated Results of Operations | |||||||||||||||||||||||||||||
| Gross Billings | $ | 668,174 | $ | 929,249 | $ | 1,157,210 | $ | 1,230,868 | $ | 1,354,800 | $ | 1,286,676 | |||||||||||||||||
| Year-over-year growth | 1,405 | % | 916 | % | 496 | % | 196 | % | 103 | % | 38 | % | |||||||||||||||||
| Year-over-year growth, excluding FX (2) | 1,378 | % | 859 | % | 465 | % | 198 | % | 108 | % | 47 | % | |||||||||||||||||
| Gross Billings Trailing Twelve Months (TTM) | $ | 1,369,139 | $ | 2,206,964 | $ | 3,169,902 | $ | 3,985,501 | $ | 4,672,127 | $ | 5,029,554 | |||||||||||||||||
| Year-over-year growth | 1,651 | % | 1,227 | % | 804 | % | 435 | % | 241 | % | 128 | % | |||||||||||||||||
| Third Party and Other Revenue (1) | $ | 295,523 | $ | 392,582 | $ | 422,989 | $ | 478,510 | $ | 540,053 | $ | 502,985 | |||||||||||||||||
| Direct Revenue (1) | - | - | 7,172 | 13,654 | 19,230 | 65,350 | |||||||||||||||||||||||
| Total Consolidated Revenue | $ | 295,523 | $ | 392,582 | $ | 430,161 | $ | 492,164 | $ | 559,283 | $ | 568,335 | |||||||||||||||||
| Year-over-year growth | 1,358 | % | 915 | % | 426 | % | 186 | % | 89 | % | 45 | % | |||||||||||||||||
| Year-over-year growth, excluding FX (2) | 1,332 | % | 858 | % | 401 | % | 188 | % | 95 | % | 53 | % | |||||||||||||||||
| Consolidated Revenue TTM | $ | 588,192 | $ | 942,108 | $ | 1,290,490 | $ | 1,610,430 | $ | 1,874,190 | $ | 2,049,943 | |||||||||||||||||
| Year-over-year growth | 1,594 | % | 1,205 | % | 761 | % | 415 | % | 219 | % | 118 | % | |||||||||||||||||
| Operating (Loss) Income | $ | (117,148 | ) | $ | (101,027 | ) | $ | (239 | ) | $ | (14,972 | ) | $ | 39,639 | $ | 46,485 | |||||||||||||
| Year-over-year growth | N/A | (174 | ) | % | 100 | % | 96 | % | N/A | N/A | |||||||||||||||||||
| Operating Margin (% of revenue) | (39.6 | ) | % | (25.7 | ) | % | (0.1 | ) | % | (3.0 | ) | % | 7.1 | % | 8.2 | % | |||||||||||||
| Year-over-year growth (bps) | (8,192 | ) | 6,949 | 6,838 | 19,213 | 4,673 | 3,391 | ||||||||||||||||||||||
| Operating (Loss) Income TTM | $ | (546,064 | ) | $ | (610,272 | ) | $ | (554,543 | ) | $ | (233,386 | ) | $ | (76,599 | ) | $ | 70,913 | ||||||||||||
| Operating Margin TTM (% of TTM revenue) | (92.8 | ) | % | (64.8 | ) | % | (43.0 | ) | % | (14.5 | ) | % | (4.1 | ) | % | 3.5 | % | ||||||||||||
| Year-over-year growth (bps) | (11,533 | ) | (2,457 | ) | 1,427 | 11,983 | 8,875 | 6,824 | |||||||||||||||||||||
| Net Loss Attributable to Common Stockholders | $ | (146,480 | ) | $ | (107,406 | ) | $ | (54,229 | ) | $ | (65,379 | ) | $ | (11,695 | ) | $ | 28,386 | ||||||||||||
| Weighted Average Basic Shares Outstanding | 307,849 | 303,415 | 307,605 | 528,422 | 644,097 | 647,150 | |||||||||||||||||||||||
| Weighted Average Diluted Shares Outstanding (3) | 307,849 | 303,415 | 307,605 | 528,422 | 644,097 | 663,123 | |||||||||||||||||||||||
| Net (Loss) Earnings per Share Attributable to Common Stockholders | |||||||||||||||||||||||||||||
| Basic | $ | (0.48 | ) | $ | (0.35 | ) | $ | (0.18 | ) | $ | (0.12 | ) | $ | (0.02 | ) | $ | 0.04 | ||||||||||||
| Diluted | $ | (0.48 | ) | $ | (0.35 | ) | $ | (0.18 | ) | $ | (0.12 | ) | $ | (0.02 | ) | $ | 0.04 | ||||||||||||
| Operating (Loss) Income Excl Stock-Based Compensation (SBC), Acquisition-Related Expenses (4) | $ | (98,284 | ) | $ | (62,309 | ) | $ | (1,692 | ) | $ | 17,952 | $ | 67,590 | $ | 71,934 | ||||||||||||||
| Year-over-year growth | N/A | (166 | ) | % | 93 | % | N/A | N/A | N/A | ||||||||||||||||||||
| Operating Margin Excl SBC, Acq-Related (% of revenue) (4) | (33.3 | ) | % | (15.9 | ) | % | (0.4 | ) | % | 3.6 | % | 12.1 | % | 12.7 | % | ||||||||||||||
| Year-over-year growth (bps) | (7,611 | ) | 4,471 | 2,760 | 8,689 | 4,534 | 2,853 | ||||||||||||||||||||||
| Operating (Loss) Income TTM Excl SBC, Acq-Related (4) | $ | (287,964 | ) | $ | (326,848 | ) | $ | (305,646 | ) | $ | (144,333 | ) | $ | 21,541 | $ | 155,784 | |||||||||||||
| Operating Margin TTM Excl SBC, Acq-Related (% of TTM revenue) (4) | (49.0 | ) | % | (34.7 | ) | % | (23.7 | ) | % | (9.0 | ) | % | 1.1 | % | 7.6 | % | |||||||||||||
| Year-over-year growth (bps) | (7,208 | ) | (1,333 | ) | 245 | 4,887 | 5,011 | 4,229 | |||||||||||||||||||||
| Non-GAAP Net (Loss) Earnings Attributable to Common Stockholders (5) | $ | (127,616 | ) | $ | (68,688 | ) | $ | (55,682 | ) | $ | (32,455 | ) | $ | 16,256 | $ | 53,835 | |||||||||||||
| Weighted Average Diluted Shares for non-GAAP Net (Loss) Income per Share (3) | 307,849 | 303,415 | 307,605 | 528,422 | 663,666 | 663,123 | |||||||||||||||||||||||
| Non-GAAP Net (Loss) Earnings per Share Attributable to Common Stockholders (5) | $ | (0.41 | ) | $ | (0.23 | ) | $ | (0.18 | ) | $ | (0.06 | ) | $ | 0.02 | $ | 0.08 | |||||||||||||
| Segments | |||||||||||||||||||||||||||||
| North America Segment: | |||||||||||||||||||||||||||||
| Revenue | $ | 136,612 | $ | 157,205 | $ | 161,525 | $ | 179,638 | $ | 238,565 | $ | 260,181 | |||||||||||||||||
| Year-over-year growth | 574 | % | 341 | % | 188 | % | 103 | % | 75 | % | 66 | % | |||||||||||||||||
| % of Consolidated Revenue | 46 | % | 40 | % | 38 | % | 36 | % | 43 | % | 46 | % | |||||||||||||||||
| Revenue TTM | $ | 316,752 | $ | 438,305 | $ | 543,705 | $ | 634,980 | $ | 736,933 | $ | 839,909 | |||||||||||||||||
| Segment Operating (Loss) Income (6) | $ | (21,778 | ) | $ | (10,501 | ) | $ | 18,836 | $ | 18,239 | $ | 40,172 | $ | 43,429 | |||||||||||||||
| Year-over-year growth | N/A | (2,678 | ) | % | 496 | % | N/A | N/A | N/A | ||||||||||||||||||||
| % of Consolidated Segment Operating Income | 22 | % | 17 | % | 1,113 | % | 102 | % | 59 | % | 60 | % | |||||||||||||||||
| Segment Operating Margin (% of North America revenue) (6) | (15.9 | ) | % | (6.7 | ) | % | 11.7 | % | 10.2 | % | 16.8 | % | 16.7 | % | |||||||||||||||
| Year-over-year growth (bps) | (5,879 | ) | (562 | ) | 603 | 3,494 | 3,278 | 2,337 | |||||||||||||||||||||
| Segment Operating (Loss) Income TTM (6) | $ | (40,901 | ) | $ | (51,024 | ) | $ | (35,348 | ) | $ | 4,796 | $ | 66,746 | $ | 120,676 | ||||||||||||||
| Segment Operating Margin TTM (% of North America TTM revenue) (6) | (12.9 | ) | % | (11.6 | ) | % | (6.5 | ) | % | 0.8 | % | 9.1 | % | 14.4 | % | ||||||||||||||
| Year-over-year growth (bps) | (3,604 | ) | (2,266 | ) | (1,467 | ) | 596 | 2,197 | 2,601 | ||||||||||||||||||||
| International Segment: | |||||||||||||||||||||||||||||
| Revenue | $ | 158,911 | $ | 235,377 | $ | 268,636 | $ | 312,526 | $ | 320,718 | $ | 308,154 | |||||||||||||||||
| Year-over-year growth | N/A | 7,709 | % | 947 | % | 273 | % | 102 | % | 31 | % | ||||||||||||||||||
| Year-over-year growth, excluding FX (2) | N/A | 7,013 | % | 868 | % | 276 | % | 112 | % | 44 | % | ||||||||||||||||||
| % of Consolidated Revenue | 54 | % | 60 | % | 62 | % | 64 | % | 57 | % | 54 | % | |||||||||||||||||
| Revenue TTM | $ | 271,440 | $ | 503,803 | $ | 746,785 | $ | 975,450 | $ | 1,137,257 | $ | 1,210,034 | |||||||||||||||||
| Segment Operating (Loss) Income (6) | $ | (76,506 | ) | $ | (51,808 | ) | $ | (20,528 | ) | $ | (287 | ) | $ | 27,418 | $ | 28,505 | |||||||||||||
| Year-over-year growth | N/A | (125 | ) | % | 21 | % | 100 | % | N/A | 155 | % | ||||||||||||||||||
| % of Consolidated Segment Operating Income | 78 | % | 83 | % | (1,213 | ) | % | (2 | ) | % | 41 | % | 40 | % | |||||||||||||||
| Segment Operating Margin (% of International revenue) (6) | (48.1 | ) | % | (22.0 | ) | % | (7.6 | ) | % | (0.1 | ) | % | 8.5 | % | 9.3 | % | |||||||||||||
| Year-over-year growth (bps) | N/A | 74,265 | 9,392 | 14,474 | 5,669 | 3,126 | |||||||||||||||||||||||
| Segment Operating (Loss) Income TTM (6) | $ | (247,063 | ) | $ | (275,824 | ) | $ | (270,298 | ) | $ | (149,129 | ) | $ | (45,205 | ) | $ | 35,108 | ||||||||||||
| Segment Operating Margin TTM (% of International TTM revenue) (6) | (91.0 | ) | % | (54.7 | ) | % | (36.2 | ) | % | (15.3 | ) | % | (4.0 | ) | % | 2.9 | % | ||||||||||||
| Year-over-year growth (bps) | N/A | 70,992 | 13,508 | 13,628 | 8,704 | 5,765 | |||||||||||||||||||||||
| Supplemental Financial Information and Business Metrics (continued) | ||||||||||||||||||||||||
| (in thousands, except percentages, per share and headcount data and TTM Gross Billings / Average Active Customer) | ||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||
| Q1 2011 (7) | Q2 2011 | Q3 2011 | Q4 2011 | Q1 2012 | Q2 2012 | |||||||||||||||||||
| (Restated)(12) | ||||||||||||||||||||||||
| Cash Flow | ||||||||||||||||||||||||
| Operating cash flow (TTM) | $ | 91,928 | $ | 128,316 | $ | 173,291 | $ | 290,447 | $ | 356,221 | $ | 392,517 | ||||||||||||
| Purchases of Property and Equipment (TTM) | (24,780 | ) | (31,949 | ) | (38,414 | ) | (43,811 | ) | (45,932 | ) | (62,401 | ) | ||||||||||||
| Free cash flow (TTM) (8) | $ | 67,148 | $ | 96,367 | $ | 134,877 | $ | 246,636 | $ | 310,289 | $ | 330,116 | ||||||||||||
| Other Metrics: | ||||||||||||||||||||||||
| Active Customers(9) | 15,376 | 23,037 | 28,906 | 33,742 | 36,850 | 38,046 | ||||||||||||||||||
| TTM Gross Billings / Average Active Customer (10) | $ | 169 | $ | 174 | $ | 189 | $ | 187 | $ | 179 | $ | 165 | ||||||||||||
| Headcount | ||||||||||||||||||||||||
| Sales (11) | 3,556 | 4,850 | 4,853 | 5,196 | 5,735 | 5,587 | ||||||||||||||||||
| % North America | 19 | % | 20 | % | 21 | % | 20 | % | 21 | % | 20 | % | ||||||||||||
| % International | 81 | % | 80 | % | 79 | % | 80 | % | 79 | % | 80 | % | ||||||||||||
| Other | 3,551 | 4,775 | 5,565 | 6,275 | 6,813 | 7,233 | ||||||||||||||||||
| Total Headcount | 7,107 | 9,625 | 10,418 | 11,471 | 12,548 | 12,820 | ||||||||||||||||||
| (1) | The second quarter 2012 marked the first time that direct revenue was material to the Company’s consolidated performance. As a result, beginning in the second quarter 2012, third party and other and direct revenue are presented separately. Third party revenue is related to sales for which the company acts as an agent for the merchant. This revenue is recorded on a net basis. Direct revenue is related to the sale of products for which the Company is the merchant of record. These revenues are accounted for on a gross basis, with the cost of inventory recorded in cost of revenue. | |
| (2) | Represents change in financial measures that would have resulted had average exchange rates in the reported period been the same as those in effect in the prior year period. | |
| (3) | The weighted-average diluted shares outstanding is calculated using the weighted-average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock units and restricted shares, as calculated using the treasury stock method. | |
| (4) | Please see the section entitled ‘‘Non-GAAP Financial Measures’’ above for further information on these metrics. | |
| (5) | Non-GAAP net (loss) income attributable to common stockholders is a non-GAAP financial measure. This measure excludes stock-based compensation and acquisition-related costs. See ‘‘Non-GAAP Reconciliation Schedule’’ for a reconciliation of this measure to the most applicable financial measure under U.S. GAAP. | |
| (6) | Segment operating income excludes stock-based compensation and acquisition-related expenses, as they are not allocated at the segment level. | |
| (7) | Year-over-year growth is unavailable for select international growth measures as Groupon did not commence international operations until the second quarter of 2010. | |
| (8) | Free cash flow is a non-GAAP financial measure. The Company reconciles this measure to the most comparable U.S. GAAP measure, ‘‘Net cash provided by operating activities’’, for the periods presented. | |
| (9) | Reflects the total number of unique accounts who have purchased Groupons during the trailing twelve months. | |
| (10) | Reflects the total gross billings generated in the trailing twelve months per average active customer. | |
| (11) | Includes inside and outside merchant sales representatives, as well as sales support. | |
| (12) |
The Company restated the Condensed Consolidated Statements of
Operations for the three months ended March 31, 2011, included in
the Form S-1 filed with the SEC on June 2, 2011, to correct for an
error in its presentation of revenue. Most significantly, the
Company restated its reporting of revenue from Groupons to be net of
the amounts related to merchant fees. Historically, the Company
reported the gross amounts billed to its subscribers as revenue. The
Condensed Consolidated Statement of Operations for the three months
ended March 31, 2011, was restated to show the net amount the
Company retains after paying the merchant fees. The effect of the
correction resulted in a reduction of previously reported revenue
and corresponding reductions in cost of revenue in those periods.
The change in presentation had no effect on pre-tax loss, net loss
or any per share amounts for the period.
The Company has also changed the presentation of certain other income statement expenses for the three months ended March 31, 2011 to be consistent with reporting revenue on a net basis. These changes include presenting loyalty programs as a component of marketing rather than as an offset to revenue. The Company believes that this classification is most appropriate as it is acting as an agent on behalf of the merchant in driving traffic to generate revenue. In addition, refunds made to customers which are not recovered by the merchant are presented as a component of cost of revenue, rather than as an offset to revenue, as these amounts are not paid directly to the merchants.
A portion of technology costs and editorial costs have been reclassified to cost of revenue from selling, general and administrative for the three months ended March 31, 2011.
Costs associated with the Company’s marketing staff, including payroll, benefits and stock compensation, have been reclassified to marketing for the three months ended March 31, 2011 from selling general and administrative. |