CHICAGO--(BUSINESS WIRE)--Groupon, Inc. (NASDAQ: GRPN) today announced financial results for the quarter and fiscal year ended December 31, 2012.
Gross billings, which reflect the total dollar value of customer purchases of goods and services, excluding any applicable taxes and net of estimated refunds, increased 24% year-over-year to $1.52 billion in the fourth quarter 2012, compared with $1.23 billion in the fourth quarter 2011. Excluding the $21.0 million unfavorable impact from year-over-year changes in foreign exchange rates, gross billings growth was 25% compared with fourth quarter 2011.
Revenue increased 30% year-over-year to $638.3 million in the fourth quarter 2012, compared with $492.2 million in the fourth quarter 2011. Excluding the $7.7 million unfavorable impact from year-over-year changes in foreign exchange rates, revenue growth was 31% compared with fourth quarter 2011. Growth was driven by an increase in direct revenue, which grew 1549% year-over-year to $225.2 million in the fourth quarter 2012, compared with $13.7 million in the fourth quarter 2011.
Operating loss was $12.9 million in the fourth quarter 2012, including stock-based compensation and acquisition-related expenses of $26.6 million, and depreciation and amortization of $16.0 million. This compares with an operating loss of $15.0 million in the fourth quarter 2011, which included stock-based compensation and acquisition-related expenses of $32.9 million, and depreciation and amortization of $9.3 million. Year-over-year changes in foreign exchange rates had a $0.1 million favorable impact on operating results.
"Record billings growth this quarter is a clear signal that customers love Groupons," said Andrew Mason, CEO of Groupon. "We will continue to invest in growth through 2013 as we see new opportunities to give our customers what they want."
Operating cash flow decreased 61% year-over-year to $65.7 million, compared with $169.1 million in the fourth quarter 2011. Free cash flow, a non-GAAP financial measure calculated as operating cash flow less capital expenditures, decreased 83% year-over-year to $25.7 million, compared with $155.1 million in the fourth quarter 2011. At the end of the quarter, Groupon had $1.2 billion in cash and cash equivalents and no long-term borrowings.
Fourth quarter 2012 net loss attributable to common stockholders was $81.1 million, or $0.12 per share, reflecting stock-based compensation and acquisition-related expenses of $26.6 million and share count of 655.7 million. Fourth quarter 2012 results included a pre-tax non-operating loss of $50.6 million ($45.5 million after tax) related to the impairment of a cost method investment in China.
Net loss attributable to common stockholders increased by $15.7 million year-over-year, from a loss of $65.4 million, or $0.12 per share in the fourth quarter 2011, including stock-based compensation and acquisition-related expenses of $32.9 million.
Full Year 2012
Gross billings increased 35% year-over-year to $5.38 billion in 2012, compared with $3.99 billion in 2011. Excluding the $183.5 million unfavorable impact from year-over-year changes in foreign exchange rates, gross billings growth was 40% compared with 2011.
Revenue increased 45% year-over-year to $2.33 billion in 2012, compared with $1.61 billion in 2011. Excluding the $74.1 million unfavorable impact from year-over-year changes in foreign exchange rates, revenue growth was 50% compared with 2011. Growth was driven by an increase in direct revenue, which grew 2083% to $454.7 million in 2012, compared with $20.8 million in 2011.
Operating income was $98.7 million in 2012, including stock-based compensation and acquisition-related expenses of $105.0 million, and depreciation and amortization of $55.8 million. This compares with an operating loss of $233.4 million in 2011, which included stock-based compensation and acquisition-related expenses of $89.1 million, and depreciation and amortization of $32.1 million. Year-over-year changes in foreign exchange rates had a $7.4 million unfavorable impact on operating income.
Operating cash flow decreased 8% year-over-year to $266.8 million, compared with $290.4 million in 2011. Free cash flow decreased 31% year-over-year to $171.0 million, compared with $246.6 million in 2011.
Full year 2012 net loss attributable to common stockholders was $67.4 million, or $0.10 per share, reflecting stock-based compensation and acquisition-related expenses of $105.0 million and share count of 650.2 million.
Net loss attributable to common stockholders improved by $306.1 million year-over-year, from a loss of $373.5 million, or $1.03 per share in 2011, including stock-based compensation and acquisition-related expenses of $89.1 million.
| Groupon, Inc. | ||||||||||||||||||||||||||||||||||||||
| Summary Consolidated and Segment Results | ||||||||||||||||||||||||||||||||||||||
| (dollars in thousands, except share and per share data) | ||||||||||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended |
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Year Ended |
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| December 31, |
Growth |
December 31, |
Growth |
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| 2012 | 2011 |
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FX Effect (2) |
excluding |
2012 | 2011 |
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excluding |
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| Gross Billings (1) | ||||||||||||||||||||||||||||||||||||||
| North America | $ | 718,952 | $ | 475,807 | 51.1 | % | $ | (2,569 | ) | 51.6 | % | $ | 2,373,153 | $ | 1,561,927 | 51.9 | % | $ | (2,780 | ) | 52.1 | % | ||||||||||||||||
| International | 801,500 | 755,061 | 6.2 | % | (18,451 | ) | 8.6 | % | 3,007,031 | 2,423,574 | 24.1 | % | (180,739 | ) | 31.5 | % | ||||||||||||||||||||||
| Consolidated Billings | $ | 1,520,452 | $ | 1,230,868 | 23.5 | % | $ | (21,020 | ) | 25.2 | % | $ | 5,380,184 | $ | 3,985,501 | 35.0 | % | $ | (183,519 | ) | 39.6 | % | ||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||||||||||
| North America | $ | 375,351 | $ | 179,638 | 108.9 | % | $ | (1,082 | ) | 109.6 | % | $ | 1,165,700 | $ | 634,980 | 83.6 | % | $ | (1,156 | ) | 83.8 | % | ||||||||||||||||
| International | 262,951 | 312,526 | (15.9 | ) | % | (6,629 | ) | (13.7 | ) | % | 1,168,772 | 975,450 | 19.8 | % | (72,960 | ) | 27.3 | % | ||||||||||||||||||||
| Consolidated revenue | $ | 638,302 | $ | 492,164 | 29.7 | % | $ | (7,711 | ) | 31.3 | % | $ | 2,334,472 | $ | 1,610,430 | 45.0 | % | $ | (74,116 | ) | 49.6 | % | ||||||||||||||||
| Operating (loss) income | $ | (12,861 | ) | $ | (14,972 | ) | 14.1 | % | $ | 135 | 13.2 | % | $ | 98,701 | $ | (233,386 | ) | N/A | $ | (7,401 | ) | N/A | ||||||||||||||||
| Net loss attributable to common stockholders | $ | (81,089 | ) | $ | (65,379 | ) | (24.0 | ) | % | $ | 1,102 | (25.7 | ) | % | $ | (67,377 | ) | $ | (373,494 | ) | 82.0 | % | $ | (9,283 | ) | 84.4 | % | |||||||||||
| Net loss per share | ||||||||||||||||||||||||||||||||||||||
| Basic | $ | (0.12 | ) | $ | (0.12 | ) | $ | (0.10 | ) | $ | (1.03 | ) | ||||||||||||||||||||||||||
| Diluted | $ | (0.12 | ) | $ | (0.12 | ) | $ | (0.10 | ) | $ | (1.03 | ) | ||||||||||||||||||||||||||
| Weighted average basic shares outstanding | 655,678,123 | 528,421,712 | 650,214,119 | 362,261,324 | ||||||||||||||||||||||||||||||||||
| Weighted average diluted shares outstanding | 655,678,123 | 528,421,712 | 650,214,119 | 362,261,324 | ||||||||||||||||||||||||||||||||||
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(1) |
Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds. Includes direct billings and third party and other billings. |
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|
(2) |
Represents change in financial measures that would have resulted had average exchange rates in the reporting period been the same as those in effect in the three months and year ended December 31, 2011. |
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Highlights
- Largest sequential gross billings increase in Groupon history. All categories contributed to the biggest sequential increase in platform growth on an absolute dollar basis in Groupon’s history.
- Unit milestone. The Company surpassed the 50 million unit mark for the first time in the fourth quarter 2012. Consolidated units, defined as vouchers and products ordered before cancellations and refunds, grew 21% year-over-year.
- Seasonal strength in Groupon Goods. After a successful holiday season, Goods has now reached an annual run rate of about $2.0 billion in global billings, just five quarters after its launch.
- Growing merchant selection and quality. As of the end of the fourth quarter, the number of active deals in North America increased almost 300% year-over-year to nearly 37,000.
- Continued customer acquisition efficiencies. Marketing expense per new customer improved 61% year-over-year in the fourth quarter 2012, enabling the reduction of overall marketing spend by 61% compared with the fourth quarter 2011. As of December 31, 2012, Groupon had 41.0 million active customers, an increase of 22% year-over-year, with gross customer additions partially offset by higher customer inactivations.
- Substantial growth in mobile transaction activity. In January 2013, nearly 40% of North American transactions were completed on mobile devices, an increase of 44% compared with January 2012. This compares with about one third of transactions completed on mobile devices in October 2012.
- Launch of merchant services in 2012. Groupon launched a number of services in 2012 to strengthen relationships with local businesses, including Breadcrumb and Payments.
Outlook
Revenue for the first quarter 2013 is expected to be between $560 million and $610 million, an increase of between 0% and 9% compared with first quarter 2012.
Operating (loss) income for the first quarter 2013 is expected to be between $(10) million and $10 million, compared with $39.6 million in the first quarter 2012. This outlook includes $30 million of stock-based compensation, and assumes no acquisitions or investments, or material changes in foreign exchange rates.
For the full year 2013, operating income is expected to increase compared with 2012.
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
In addition to financial results reported in accordance with generally accepted accounting principles (GAAP), we have provided the following non-GAAP financial measures in this release and the accompanying tables: foreign exchange rate neutral operating results, free cash flow and consolidated operating income (loss) excluding stock-based compensation and acquisition-related expense (benefit), net. These non-GAAP financial measures are presented to aid investors in better understanding Groupon's performance. However, these measures are not intended to be a substitute for those reported in accordance with GAAP. These measures may be different from non-GAAP financial measures used by other companies.
Foreign exchange rate neutral operating results show our current period operating results as if foreign currency exchange rates had remained the same as those in effect in the comparable period. These measures are intended to facilitate comparisons to our historical performance. For a reconciliation of foreign exchange rate neutral operating results to our GAAP operating results, see “Reconciliation of Foreign Exchange Rate Neutral Operating Results to U.S. GAAP Operating Results" and "Supplemental Financial Information and Business Metrics" included in the tables accompanying this release.
Free cash flow is a non-GAAP measure that comprises net cash provided by operating activities less purchases of property and equipment and capitalized software. We use free cash flow, and ratios based on it, to conduct and evaluate our business because, although it is similar to cash flow from operations, we believe that it typically represents a more useful measure of cash flows because purchases of fixed assets, software developed for internal use and website development costs are necessary components of our ongoing operations. Free cash flow is not intended to represent the total increase or decrease in Groupon's cash balance for the applicable period. For a reconciliation of free cash flow to cash flow from operations, see ''Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities'' included in the tables accompanying this release.
Consolidated operating income (loss) excluding stock-based compensation and acquisition-related expense (benefit), net is a non-GAAP measure that comprises the consolidated total of the segment operating income (loss) of our two segments, North America and International. Stock-based compensation expense and acquisition-related expense (benefit), net are excluded from segment operating income (loss) that we report under GAAP for our segments. Stock-based compensation expense is primarily a non-cash item. Acquisition-related expense (benefit), net represents the change in the fair value of contingent consideration arrangements related to business combinations. We use consolidated operating income (loss) excluding stock-based compensation and acquisition-related expense (benefit), net to allocate resources and evaluate performance internally. For a reconciliation of consolidated operating income (loss) excluding stock-based compensation and acquisition-related expense (benefit), net to consolidated operating income (loss), see ''Supplemental Financial Information and Business Metrics'' included in the tables accompanying this release.
Note on Forward Looking Statements
The statements contained in this presentation 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 our results to differ materially from those included in the forward-looking statements include, but are not limited to, volatility in our revenue and operating results; risks related to our business strategy; responding to changes in the market; effectively dealing with challenges arising from our international operations; retaining existing customers and adding new customers; retaining existing merchant partners and adding new merchant partners; incurring expenses as we expand our business; competing against smaller competitors and competitors with more financial resources than us; maintaining favorable terms with our business partners; maintaining a strong brand; managing inventory and order fulfillment; integrating our technology platforms; managing refund risks; retaining our executive team; litigation; regulations, including the CARD Act and regulation of the Internet; tax liabilities; tax legislation; maintaining our information technology infrastructure; security breaches; protecting our 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 our ability to raise capital if necessary. We urge 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 on Form 10-Q, 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 February 27, 2013. Groupon undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this presentation 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. | ||||||||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||||||||
| (in thousands) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
|
Three Months Ended |
Year Ended |
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Operating activities | ||||||||||||||||
| Net loss | $ | (80,047 | ) | $ | (59,679 | ) | $ | (51,031 | ) | $ | (297,762 | ) | ||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||
| Depreciation and amortization | 15,965 | 9,301 | 55,801 | 32,055 | ||||||||||||
| Stock-based compensation | 26,411 | 32,668 | 104,117 | 93,590 | ||||||||||||
| Deferred income taxes | (17,259 | ) | 31,601 | (7,651 | ) | 32,203 | ||||||||||
| Excess tax benefits on stock-based compensation | (2,403 | ) | 1,145 | (27,023 | ) | (10,178 | ) | |||||||||
| Loss on equity method investees | 1,231 | 6,678 | 9,925 | 26,652 | ||||||||||||
| Acquisition-related expense (benefit), net | 153 | 256 | 897 | (4,537 | ) | |||||||||||
| Gain on return of common stock | - | - | - | (4,916 | ) | |||||||||||
| Gain on E-Commerce transaction | - | - | (56,032 | ) | - | |||||||||||
| Impairment of cost method investment | 50,553 | - | 50,553 | - | ||||||||||||
| Change in assets and liabilities, net of acquisitions: | ||||||||||||||||
| Restricted cash | (2,517 | ) | (4,378 | ) | (4,372 | ) | (12,519 | ) | ||||||||
| Accounts receivable | 12,723 | (686 | ) | 10,534 | (70,376 | ) | ||||||||||
| Prepaid expenses and other current assets | (45,922 | ) | 4,731 | (70,859 | ) | (36,292 | ) | |||||||||
| Accounts payable | 5,537 | 927 | 18,711 | (20,997 | ) | |||||||||||
| Accrued merchant and supplier payables | 96,029 | 65,236 | 149,918 | 380,108 | ||||||||||||
| Accrued expenses and other current liabilities | (20,268 | ) | 80,164 | 47,742 | 189,127 | |||||||||||
| Other, net | 25,531 | 1,113 | 35,604 | (5,711 | ) | |||||||||||
| Net cash provided by operating activities | 65,717 | 169,077 | 266,834 | 290,447 | ||||||||||||
| Net cash used in investing activities | (52,753 | ) | (34,907 | ) | (194,979 | ) | (147,433 | ) | ||||||||
| Net cash (used in) provided by financing activities | (6,495 | ) | 746,913 | 12,095 | 867,205 | |||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 1,809 | (2,083 | ) | 2,404 | (6,117 | ) | ||||||||||
| Net increase in cash and cash equivalents | 8,278 | 879,000 | 86,354 | 1,004,102 | ||||||||||||
| Cash and cash equivalents, beginning of period | 1,201,011 | 243,935 | 1,122,935 | 118,833 | ||||||||||||
| Cash and cash equivalents, end of the period | $ | 1,209,289 | $ | 1,122,935 | $ | 1,209,289 | $ | 1,122,935 | ||||||||
| Groupon, Inc. | ||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenue: | ||||||||||||||||
| Third party and other revenue | $ | 413,127 | $ | 478,510 | $ | 1,879,729 | $ | 1,589,604 | ||||||||
| Direct revenue | 225,175 | 13,654 | 454,743 | 20,826 | ||||||||||||
| Total revenue | 638,302 | 492,164 | 2,334,472 | 1,610,430 | ||||||||||||
| Cost of revenue: | ||||||||||||||||
| Third party and other revenue | 63,905 | 86,882 | 297,739 | 243,789 | ||||||||||||
| Direct revenue | 218,567 | 9,383 | 421,201 | 15,090 | ||||||||||||
| Total cost of revenue | 282,472 | 96,265 | 718,940 | 258,879 | ||||||||||||
| Gross Profit | 355,830 | 395,899 | 1,615,532 | 1,351,551 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Marketing | 60,913 | 155,299 | 336,854 | 768,472 | ||||||||||||
| Selling, general and administrative | 307,625 | 255,316 | 1,179,080 | 821,002 | ||||||||||||
| Acquisition-related expense (benefit), net | 153 | 256 | 897 | (4,537 | ) | |||||||||||
| Total operating expenses | 368,691 | 410,871 | 1,516,831 | 1,584,937 | ||||||||||||
| (Loss) income from operations | (12,861 | ) | (14,972 | ) | 98,701 | (233,386 | ) | |||||||||
| Interest and other (expense) income, net | (48,279 | ) | (3,835 | ) | 6,166 | 5,973 | ||||||||||
| Loss on equity method investees | (1,231 | ) | (6,678 | ) | (9,925 | ) | (26,652 | ) | ||||||||
| (Loss) income before provision for income taxes | (62,371 | ) | (25,485 | ) | 94,942 | (254,065 | ) | |||||||||
| Provision for income taxes | 17,676 | 34,194 | 145,973 | 43,697 | ||||||||||||
| Net loss | (80,047 | ) | (59,679 | ) | (51,031 | ) | (297,762 | ) | ||||||||
| Less: Net (income) loss attributable to noncontrolling interests | (936 | ) | (5,267 | ) | (3,742 | ) | 18,335 | |||||||||
| Net loss attributable to Groupon, Inc. | (80,983 | ) | (64,946 | ) | (54,773 | ) | (279,427 | ) | ||||||||
| Redemption of preferred stock in excess of carrying value | - | - | - | (34,327 | ) | |||||||||||
| Adjustment of redeemable noncontrolling interests to redemption value | (106 | ) | (433 | ) | (12,604 | ) | (59,740 | ) | ||||||||
| Net loss attributable to common stockholders | $ | (81,089 | ) | $ | (65,379 | ) | $ | (67,377 | ) | $ | (373,494 | ) | ||||
| Net loss per share | ||||||||||||||||
| Basic | $ | (0.12 | ) | $ | (0.12 | ) | $ | (0.10 | ) | $ | (1.03 | ) | ||||
| Diluted | $ | (0.12 | ) | $ | (0.12 | ) | $ | (0.10 | ) | $ | (1.03 | ) | ||||
| Weighted average number of shares outstanding | ||||||||||||||||
| Basic | 655,678,123 | 528,421,712 | 650,214,119 | 362,261,324 | ||||||||||||
| Diluted | 655,678,123 | 528,421,712 | 650,214,119 | 362,261,324 | ||||||||||||
| Groupon, Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| (in thousands, except share and per share data) | ||||||||
| (unaudited) | ||||||||
| December 31, | ||||||||
| 2012 | 2011 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,209,289 | $ | 1,122,935 | ||||
| Accounts receivable, net | 96,713 | 108,747 | ||||||
| Deferred income taxes | 31,211 | 19,243 | ||||||
| Prepaid expenses and other current assets | 150,573 | 72,402 | ||||||
| Total current assets | 1,487,786 | 1,323,327 | ||||||
| Property, equipment and software, net | 121,072 | 51,800 | ||||||
| Goodwill | 206,684 | 166,903 | ||||||
| Intangible assets, net | 42,597 | 45,667 | ||||||
| Investments | 84,209 | 50,604 | ||||||
| Deferred income taxes, non-current | 29,916 | 46,104 | ||||||
| Other non-current assets | 59,210 | 90,071 | ||||||
| Total Assets | $ | 2,031,474 | $ | 1,774,476 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 59,865 | $ | 40,918 | ||||
| Accrued merchant and supplier payables | 671,305 | 520,723 | ||||||
| Accrued expenses | 246,924 | 212,007 | ||||||
| Deferred income taxes | 53,700 | 76,841 | ||||||
| Other current liabilities | 136,647 | 144,673 | ||||||
|
Total current liabilities |
1,168,441 | 995,162 | ||||||
| Deferred income taxes, non-current | 20,860 | 7,428 | ||||||
| Other non-current liabilities | 100,072 | 70,766 | ||||||
| Total Liabilities | 1,289,373 | 1,073,356 | ||||||
| Commitments and contingencies | ||||||||
| Redeemable noncontrolling interests | - | 1,653 | ||||||
| Stockholders' Equity | ||||||||
| Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized, 654,523,706 and 641,745,225 shares issued and outstanding at December 31, 2012 and 2011, respectively | 65 | 64 | ||||||
| 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, 2012 and 2011 | - | - | ||||||
| Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized, no shares issued and outstanding at December 31, 2012 and 2011 | - | - | ||||||
| Additional paid-in capital | 1,485,006 | 1,388,253 | ||||||
| Accumulated deficit | (753,477 | ) | (698,704 | ) | ||||
| Accumulated other comprehensive income | 12,446 | 12,928 | ||||||
| Total Groupon, Inc. Stockholders' Equity | 744,040 | 702,541 | ||||||
| Noncontrolling interests | (1,939 | ) | (3,074 | ) | ||||
| Total Equity | 742,101 | 699,467 | ||||||
| Total Liabilities and Equity | $ | 2,031,474 | $ | 1,774,476 | ||||
| Groupon, Inc. | ||||||||||||||||||||
| Segment Information | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||
| North America | ||||||||||||||||||||
| Gross Billings (1) | $ | 718,952 | $ | 475,807 | $ | 2,373,153 | $ | 1,561,927 | ||||||||||||
| Revenue | $ | 375,351 | $ | 179,638 | $ | 1,165,700 | $ | 634,980 | ||||||||||||
| Segment cost of revenue and operating expenses(2)(3) | 358,319 | 161,399 | 1,025,974 | 630,184 | ||||||||||||||||
| Segment operating income(3) | $ | 17,032 | $ | 18,239 | $ | 139,726 | $ | 4,796 | ||||||||||||
| Segment income as a percent of segment revenue | 4.5 | % | 10.2 | % | 12.0 | % | 0.8 | % | ||||||||||||
| International | ||||||||||||||||||||
| Gross Billings (1) | $ | 801,500 | $ | 755,061 | $ | 3,007,031 | $ | 2,423,574 | ||||||||||||
| Revenue | $ | 262,951 | $ | 312,526 | $ | 1,168,772 | $ | 975,450 | ||||||||||||
| Segment cost of revenue and operating expenses(2)(3) | 266,280 | 312,813 | 1,104,783 | 1,124,579 | ||||||||||||||||
| Segment operating (loss) income(3) | $ | (3,329 | ) | $ | (287 | ) | $ | 63,989 | $ | (149,129 | ) | |||||||||
| Segment (loss) income as a percent of segment revenue | (1.3 | ) | % | (0.1 | ) | % | 5.5 | % | (15.3 | ) | % | |||||||||
| Consolidated | ||||||||||||||||||||
| Gross Billings (1) | $ | 1,520,452 | $ | 1,230,868 | $ | 5,380,184 | $ | 3,985,501 | ||||||||||||
| Revenue | $ | 638,302 | $ | 492,164 | $ | 2,334,472 | $ | 1,610,430 | ||||||||||||
| Segment cost of revenue and operating expenses(2) | 624,599 | 474,212 | 2,130,757 | 1,754,763 | ||||||||||||||||
| Segment operating income (loss) | $ | 13,703 | $ | 17,952 | $ | 203,715 | $ | (144,333 | ) | |||||||||||
| Segment income (loss) as a percent of segment revenue | 2.1 | % | 3.6 | % | 8.7 | % | (9.0 | ) | % | |||||||||||
| Stock-based compensation | 26,411 | 32,668 | 104,117 | 93,590 | ||||||||||||||||
| Acquisition-related expense (benefit), net | 153 | 256 | 897 | (4,537 | ) | |||||||||||||||
| Operating (loss) income | (12,861 | ) | (14,972 | ) | 98,701 | (233,386 | ) | |||||||||||||
| Interest and other expense (income), net | 48,279 | 3,835 | (6,166 | ) | (5,973 | ) | ||||||||||||||
| Loss on equity method investees | 1,231 | 6,678 | 9,925 | 26,652 | ||||||||||||||||
| (Loss) income before provision for income taxes | (62,371 | ) | (25,485 | ) | 94,942 | (254,065 | ) | |||||||||||||
| Provision for income taxes | 17,676 | 34,194 | 145,973 | 43,697 | ||||||||||||||||
| Net loss | $ | (80,047 | ) | $ | (59,679 | ) | $ | (51,031 | ) | $ | (297,762 | ) | ||||||||
|
(1) |
Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds. Includes direct billings and third party and other billings. |
||
|
(2) |
Represents cost of revenue and operating expenses, excluding stock-based compensation and acquisition-related expense (benefit), net. |
||
|
(3) |
We record intercompany cross-charges every period for services provided by the United States to our international subsidiaries. We updated our intercompany allocations for those charges during the fourth quarter of 2012, which resulted in a one-time $8.5 million decrease to International Segment operating expenses (reduction to International Segment operating loss) and a corresponding increase to North America Segment operating expenses (reduction to North America Segment operating income). |
||
| Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities | ||||||||||||||||
| (in thousands) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| 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 months and years ended December 31, 2012 and 2011, respectively: | ||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Net cash provided by operating activities | $ | 65,717 | $ | 169,077 | $ | 266,834 | $ | 290,447 | ||||||||
| Purchases of property and equipment and capitalized software | (40,034 | ) | (13,986 | ) | (95,836 | ) | (43,811 | ) | ||||||||
| Free cash flow | $ | 25,683 | $ | 155,091 | $ | 170,998 | $ | 246,636 | ||||||||
| Net cash used in investing activities | $ | (52,753 | ) | $ | (34,907 | ) | $ | (194,979 | ) | $ | (147,433 | ) | ||||
| Net cash (used in) provided by financing activities | $ | (6,495 | ) | $ | 746,913 | $ | 12,095 | $ | 867,205 | |||||||
| Reconciliation of Foreign Exchange Rate Neutral Operating Results to Revenue and (Loss) Income from Operations | ||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||
| The following is a reconciliation of foreign exchange rate neutral operating results to the most comparable U.S. GAAP measures, "Revenue" and "(Loss) Income from operations," for the three months and year ended December 31, 2012: | ||||||||||||||||||||||||
| 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 December 31, 2012 are as follows: | ||||||||||||||||||||||||
| Three Months Ended December 31, 2012 | Three Months Ended December 31, 2012 | |||||||||||||||||||||||
| At Avg. | Exchange | At Avg. | Exchange | |||||||||||||||||||||
|
Q4 2011 |
Rate |
As |
Q3 2012 |
Rate |
As |
|||||||||||||||||||
| Revenue | $ | 646,013 | $ | (7,711 | ) | $ | 638,302 | $ | 634,734 | $ | 3,568 | $ | 638,302 | |||||||||||
| Loss from operations | $ | (12,996 | ) | $ | 135 | $ | (12,861 | ) | $ | (12,075 | ) | $ | (786 | ) | $ | (12,861 | ) | |||||||
| The effect on the Company’s consolidated statements of operations from changes in exchange rates versus the U.S. Dollar for the year ended December 31, 2012 are as follows: | ||||||||||||||||||||||||
| Year Ended December 31, 2012 | Year Ended December 31, 2012 | |||||||||||||||||||||||
| At Avg. | Exchange | At Avg. | Exchange | |||||||||||||||||||||
|
2011 |
Rate |
As |
Q4'11 - Q3'12 |
Rate |
As |
|||||||||||||||||||
| Revenue | $ | 2,408,588 | $ | (74,116 | ) | $ | 2,334,472 | $ | 2,344,952 | $ | (10,480 | ) | $ | 2,334,472 | ||||||||||
| Income from operations | $ | 106,102 | $ | (7,401 | ) | $ | 98,701 | $ | 105,467 | $ | (6,766 | ) | $ | 98,701 | ||||||||||
|
(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 months and year ended December 31, 2011. |
||
|
(2) |
Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable period. |
||
|
(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 twelve months ended September 30, 2012. |
||
| Supplemental Financial Information and Business Metrics(13) | |||||||||||||||||||||||||||||||||||||||
| (in thousands, except per share and headcount data and TTM | |||||||||||||||||||||||||||||||||||||||
| Gross Billings / Average Active Customer) | |||||||||||||||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||||||||||||||
| Q1 2011 (8) | Q2 2011 | Q3 2011 | Q4 2011 | Q1 2012 | Q2 2012 | Q3 2012 | Q4 2012 | ||||||||||||||||||||||||||||||||
| Segments | |||||||||||||||||||||||||||||||||||||||
| North America Segment: | |||||||||||||||||||||||||||||||||||||||
| Gross Billings (1) | $ | 315,152 | $ | 369,990 | $ | 400,978 | $ | 475,807 | $ | 553,557 | $ | 548,275 | $ | 552,369 | $ | 718,952 | |||||||||||||||||||||||
| Year-over-year growth | 610 | % | 359 | % | 204 | % | 118 | % | 76 | % | 48 | % | 38 | % | 51 | % | |||||||||||||||||||||||
| % of Consolidated Gross Billings | 47 | % | 40 | % | 35 | % | 39 | % | 41 | % | 43 | % | 45 | % | 47 | % | |||||||||||||||||||||||
| Gross Billings (1) Trailing Twelve Months (TTM) | $ | 745,772 | $ | 1,035,183 | $ | 1,304,128 | $ | 1,561,927 | $ | 1,800,332 | $ | 1,978,617 | $ | 2,130,008 | $ | 2,373,153 | |||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||||||
| Third Party and Other Revenue (2) | $ | 136,612 | $ | 157,205 | $ | 161,525 | $ | 179,638 | $ | 230,984 | $ | 207,119 | $ | 158,545 | $ | 165,776 | |||||||||||||||||||||||
| Direct Revenue (2) | - | - | - | - | 7,581 | 53,062 | 133,058 | 209,575 | |||||||||||||||||||||||||||||||
| Total Revenue | $ | 136,612 | $ | 157,205 | $ | 161,525 | $ | 179,638 | $ | 238,565 | $ | 260,181 | $ | 291,603 | $ | 375,351 | |||||||||||||||||||||||
|
Year-over-year growth |
574 | % | 341 | % | 188 | % | 103 | % | 75 | % | 66 | % | 81 | % | 109 | % | |||||||||||||||||||||||
| % of Consolidated Revenue | 46 | % | 40 | % | 38 | % | 36 | % | 43 | % | 46 | % | 51 | % | 59 | % | |||||||||||||||||||||||
| Revenue TTM | $ | 316,752 | $ | 438,305 | $ | 543,705 | $ | 634,980 | $ | 736,933 | $ | 839,909 | $ | 969,987 | $ | 1,165,700 | |||||||||||||||||||||||
| Cost of Revenue: | |||||||||||||||||||||||||||||||||||||||
| Third Party and Other Cost of Revenue (3) | $ | 25,050 | $ | 32,169 | $ | 31,316 | $ | 51,419 | $ | 62,580 | $ | 40,155 | $ | 15,475 | $ | 27,002 | |||||||||||||||||||||||
| Direct Cost of Revenue (3) | - | - | - | - | 6,671 | 46,159 | 115,560 | 196,789 | |||||||||||||||||||||||||||||||
| Total Cost of Revenue | $ | 25,050 | $ | 32,169 | $ | 31,316 | $ | 51,419 | $ | 69,251 | $ | 86,314 | $ | 131,035 | $ | 223,791 | |||||||||||||||||||||||
| % of North America Total Revenue | 18 | % | 20 | % | 19 | % | 29 | % | 29 | % | 33 | % | 45 | % | 60 | % | |||||||||||||||||||||||
| Gross Profit | |||||||||||||||||||||||||||||||||||||||
| Third Party and Other | $ | 111,562 | $ | 125,036 | $ | 130,209 | $ | 128,219 | $ | 168,404 | $ | 166,964 | $ | 143,070 | $ | 138,774 | |||||||||||||||||||||||
| Direct | - | - | - | - | 910 | 6,903 | 17,498 | 12,786 | |||||||||||||||||||||||||||||||
| Total | $ | 111,562 | $ | 125,036 | $ | 130,209 | $ | 128,219 | $ | 169,314 | $ | 173,867 | $ | 160,568 | $ | 151,560 | |||||||||||||||||||||||
| % of North America Total Revenue | 82 | % | 80 | % | 81 | % | 71 | % | 71 | % | 67 | % | 55 | % | 40 | % | |||||||||||||||||||||||
| Operating (Loss) Income Excl Stock-Based Compensation (SBC), Acquisition-Related Expenses | $ | (21,778 | ) | $ | (10,501 | ) | $ | 18,836 | $ | 18,239 | $ | 40,172 | $ | 43,429 | $ | 39,093 | $ | 17,032 | |||||||||||||||||||||
| Year-over-year growth | N/A | (2,678 | ) | % | 496 | % | N/A | N/A | N/A | 108 | % | (7 | ) | % | |||||||||||||||||||||||||
| % of Consolidated Operating (Loss) Income Excl SBC, Acq-Related | 22 | % | 17 | % | 1,113 | % | 102 | % | 59 | % | 60 | % | 77 | % | 124 | % | |||||||||||||||||||||||
| Operating Margin Excl SBC, Acq-Related (% of North America Total revenue) | (15.9 | ) | % | (6.7 | ) | % | 11.7 | % | 10.2 | % | 16.8 | % | 16.7 | % | 13.4 | % | 4.5 | % | |||||||||||||||||||||
| Year-over-year growth (bps) | (5,879 | ) | (562 | ) | 603 | 3,494 | 3,278 | 2,337 | 170 | (570 | ) | ||||||||||||||||||||||||||||
| Operating (Loss) Income TTM Excl SBC, Acq-Related | $ | (40,901 | ) | $ | (51,024 | ) | $ | (35,348 | ) | $ | 4,796 | $ | 66,746 | $ | 120,676 | $ | 140,933 | $ | 139,726 | ||||||||||||||||||||
| Operating Margin TTM Excl SBC, Acq-Related (% of North America Total TTM revenue) | (12.9 | ) | % | (11.6 | ) | % | (6.5 | ) | % | 0.8 | % | 9.1 | % | 14.4 | % | 14.5 | % | 12.0 | % | ||||||||||||||||||||
| Year-over-year growth (bps) | (3,604 | ) | (2,266 | ) | (1,467 | ) | 596 | 2,197 | 2,601 | 2,100 | 1,120 | ||||||||||||||||||||||||||||
| International Segment: | |||||||||||||||||||||||||||||||||||||||
| Gross Billings (1) | $ | 353,022 | $ | 559,259 | $ | 756,232 | $ | 755,061 | $ | 801,243 | $ | 738,401 | $ | 665,887 | $ | 801,500 | |||||||||||||||||||||||
| Year-over-year growth | N/A | 5,057 | % | 1,115 | % | 283 | % | 127 | % | 32 | % | (12 | ) | % | 6 | % | |||||||||||||||||||||||
| Year-over-year growth, excluding FX (4) | N/A | 4,587 | % | 1,021 | % | 287 | % | 138 | % | 45 | % | (4 | ) | % | 9 | % | |||||||||||||||||||||||
| % of Consolidated Gross Billings | 53 | % | 60 | % | 65 | % | 61 | % | 59 | % | 57 | % | 55 | % | 53 | % | |||||||||||||||||||||||
| Gross Billings (1) TTM | $ | 623,367 | $ | 1,171,781 | $ | 1,865,774 | $ | 2,423,574 | $ | 2,871,795 | $ | 3,050,937 | $ | 2,960,592 | $ | 3,007,031 | |||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||||||
| Third Party and Other Revenue (2) | $ | 158,911 | $ | 235,377 | $ | 261,464 | $ | 298,872 | $ | 309,069 | $ | 295,866 | $ | 265,019 | $ | 247,351 | |||||||||||||||||||||||
| Direct Revenue (2) | - | - | 7,172 | 13,654 | 11,649 | 12,288 | 11,930 | 15,600 | |||||||||||||||||||||||||||||||
| Total Revenue | $ | 158,911 | $ | 235,377 | $ | 268,636 | $ | 312,526 | $ | 320,718 | $ | 308,154 | $ | 276,949 | $ | 262,951 | |||||||||||||||||||||||
| Year-over-year growth | N/A | 7,709 | % | 947 | % | 273 | % | 102 | % | 31 | % | 3 | % | (16 | ) | % | |||||||||||||||||||||||
| Year-over-year growth, excluding FX (4) | N/A | 7,013 | % | 868 | % | 276 | % | 112 | % | 44 | % | 13 | % | (14 | ) | % | |||||||||||||||||||||||
| % of Consolidated Revenue | 54 | % | 60 | % | 62 | % | 64 | % | 57 | % | 54 | % | 49 | % | 41 | % | |||||||||||||||||||||||
| Revenue TTM | $ | 271,440 | $ | 503,803 | $ | 746,785 | $ | 975,450 | $ | 1,137,257 | $ | 1,210,034 | $ | 1,218,347 | $ | 1,168,772 | |||||||||||||||||||||||
| Cost of Revenue: | |||||||||||||||||||||||||||||||||||||||
| Third Party and Other Cost of Revenue (3) | $ | 14,715 | $ | 22,634 | $ | 31,023 | $ | 35,463 | $ | 40,049 | $ | 36,877 | $ | 38,698 | $ | 36,903 | |||||||||||||||||||||||
| Direct Cost of Revenue (3) | - | - | 5,707 | 9,383 | 10,198 | 11,993 | 12,053 | 21,778 | |||||||||||||||||||||||||||||||
| Total Cost of Revenue | $ | 14,715 | $ | 22,634 | $ | 36,730 | $ | 44,846 | $ | 50,247 | $ | 48,870 | $ | 50,751 | $ | 58,681 | |||||||||||||||||||||||
| % of International Total Revenue | 9 | % | 10 | % | 14 | % | 14 | % | 16 | % | 16 | % | 18 | % | 22 | % | |||||||||||||||||||||||
| Gross Profit | |||||||||||||||||||||||||||||||||||||||
| Third Party and Other | $ | 144,196 | $ | 212,743 | $ | 230,441 | $ | 263,409 | $ | 269,020 | $ | 258,989 | $ | 226,321 | $ | 210,448 | |||||||||||||||||||||||
| Direct | - | - | 1,465 | 4,271 | 1,451 | 295 | (123 | ) | (6,178 | ) | |||||||||||||||||||||||||||||
| Total | $ | 144,196 | $ | 212,743 | $ | 231,906 | $ | 267,680 | $ | 270,471 | $ | 259,284 | $ | 226,198 | $ | 204,270 | |||||||||||||||||||||||
| % of International Total Revenue | 91 | % | 90 | % | 86 | % | 86 | % | 84 | % | 84 | % | 82 | % | 78 | % | |||||||||||||||||||||||
| Operating (Loss) Income Excl SBC, Acq-Related | $ | (76,506 | ) | $ | (51,808 | ) | $ | (20,528 | ) | $ | (287 | ) | $ | 27,418 | $ | 28,505 | $ | 11,395 | $ | (3,329 | ) | ||||||||||||||||||
| Year-over-year growth | N/A | (125 | ) | % | 21 | % | 100 | % | N/A | 155 | N/A | 1060 | % | ||||||||||||||||||||||||||
| % of Consolidated Operating (Loss) Income Excl SBC, Acq-Related | 78 | % | 83 | % | (1,213 | ) | % | (2 | ) | % | 41 | % | 40 | % | 23 | % | (24 | ) | % | ||||||||||||||||||||
| Operating Margin Excl SBC, Acq-Related (% of International Total revenue) | (48.1 | ) | % | (22.0 | ) | % | (7.6 | ) | % | (0.1 | ) | % | 8.5 | % | 9.3 | % | 4.1 | % | (1.3 | ) | % | ||||||||||||||||||
| Year-over-year growth (bps) | N/A | 74,265 | 9,392 | 14,474 | 5,669 | 3,126 | 1,170 | (120 | ) | ||||||||||||||||||||||||||||||
| Operating (Loss) Income TTM Excl SBC, Acq-Related | $ | (247,063 | ) | $ | (275,824 | ) | $ | (270,298 | ) | $ | (149,129 | ) | $ | (45,205 | ) | $ | 35,108 | $ | 67,031 | $ | 63,989 | ||||||||||||||||||
| Operating Margin TTM Excl SBC, Acq-Related (% of International Total TTM revenue) | (91.0 | ) | % | (54.7 | ) | % | (36.2 | ) | % | (15.3 | ) | % | (4.0 | ) | % | 2.9 | % | 5.5 | % | 5.5 | % | ||||||||||||||||||
| Year-over-year growth (bps) | N/A | 70,992 | 13,508 | 13,628 | 8,704 | 5,765 | 4,170 | 2,080 | |||||||||||||||||||||||||||||||
| Consolidated Results of Operations | |||||||||||||||||||||||||||||||||||||||
| Gross Billings (1) | $ | 668,174 | $ | 929,249 | $ | 1,157,210 | $ | 1,230,868 | $ | 1,354,800 | $ | 1,286,676 | $ | 1,218,256 | $ | 1,520,452 | |||||||||||||||||||||||
| Year-over-year growth | 1,405 | % | 916 | % | 496 | % | 196 | % | 103 | % | 38 | % | 5 | % | 24 | % | |||||||||||||||||||||||
| Year-over-year growth, excluding FX (4) | 1,378 | % | 859 | % | 465 | % | 198 | % | 108 | % | 47 | % | 11 | % | 25 | % | |||||||||||||||||||||||
| Gross Billings (1) (TTM) | $ | 1,369,139 | $ | 2,206,964 | $ | 3,169,902 | $ | 3,985,501 | $ | 4,672,127 | $ | 5,029,554 | $ | 5,090,600 | $ | 5,380,184 | |||||||||||||||||||||||
| Year-over-year growth | 1,651 | % | 1,227 | % | 804 | % | 435 | % | 241 | % | 128 | % | 61 | % | 35 | % | |||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||||||
| Third Party and Other Revenue (2) | $ | 295,523 | $ | 392,582 | $ | 422,989 | $ | 478,510 | $ | 540,053 | $ | 502,985 | $ | 423,564 | $ | 413,127 | |||||||||||||||||||||||
| Direct Revenue (2) | - | - | 7,172 | 13,654 | 19,230 | 65,350 | 144,988 | 225,175 | |||||||||||||||||||||||||||||||
| Total Consolidated Revenue | $ | 295,523 | $ | 392,582 | $ | 430,161 | $ | 492,164 | $ | 559,283 | $ | 568,335 | $ | 568,552 | $ | 638,302 | |||||||||||||||||||||||
| Year-over-year growth | 1,358 | % | 915 | % | 426 | % | 186 | % | 89 | % | 45 | % | 32 | % | 30 | % | |||||||||||||||||||||||
| Year-over-year growth, excluding FX (4) | 1,332 | % | 858 | % | 401 | % | 188 | % | 95 | % | 53 | % | 38 | % | 31 | % | |||||||||||||||||||||||
| Total Consolidated Revenue TTMYear-over-year growth, excluding FX (1) | $ | 588,192 | $ | 942,108 | $ | 1,290,490 | $ | 1,610,430 | $ | 1,874,190 | $ | 2,049,943 | $ | 2,188,334 | $ | 2,334,472 | |||||||||||||||||||||||
| Year-over-year growth | 1,594 | % | 1,205 | % | 761 | % | 415 | % | 219 | % | 118 | % | 70 | % | 45 | % | |||||||||||||||||||||||
| Cost of Revenue: | |||||||||||||||||||||||||||||||||||||||
| Third Party and Other Cost of Revenue (3) | $ | 39,765 | $ | 54,803 | $ | 62,339 | $ | 86,882 | $ | 102,629 | $ | 77,032 | $ | 54,173 | $ | 63,905 | |||||||||||||||||||||||
| Direct Cost of Revenue (3) | - | - | 5,707 | 9,383 | 16,869 | 58,152 | 127,613 | 218,567 | |||||||||||||||||||||||||||||||
| Total Consolidated Cost of Revenue | $ | 39,765 | $ | 54,803 | $ | 68,046 | $ | 96,265 | $ | 119,498 | $ | 135,184 | $ | 181,786 | $ | 282,472 | |||||||||||||||||||||||
| % of Total Consolidated Revenue | 13 | % | 14 | % | 16 | % | 20 | % | 21 | % | 24 | % | 32 | % | 44 | % | |||||||||||||||||||||||
| Gross Profit | |||||||||||||||||||||||||||||||||||||||
| Third Party and Other | $ | 255,758 | $ | 337,779 | $ | 360,650 | $ | 391,628 | $ | 437,424 | $ | 425,953 | $ | 369,391 | $ | 349,222 | |||||||||||||||||||||||
| Direct | - | - | 1,465 | 4,271 | 2,361 | 7,198 | 17,375 | 6,608 | |||||||||||||||||||||||||||||||
| Total | $ | 255,758 | $ | 337,779 | $ | 362,115 | $ | 395,899 | $ | 439,785 | $ | 433,151 | $ | 386,766 | $ | 355,830 | |||||||||||||||||||||||
| % of Total Consolidated Revenue | 87 | % | 86 | % | 84 | % | 80 | % | 79 | % | 76 | % | 68 | % | 56 | % | |||||||||||||||||||||||
| Operating (Loss) Income Excl SBC, Acq-Related | $ | (98,284 | ) | $ | (62,309 | ) | $ | (1,692 | ) | $ | 17,952 | $ | 67,590 | $ | 71,934 | $ | 50,488 | $ | 13,703 | ||||||||||||||||||||
| Year-over-year growth | N/A | (166 | ) | % | 93. | % | N/A | N/A | N/A | N/A | (24 | ) | % | ||||||||||||||||||||||||||
| Operating Margin Excl SBC, Acq-Related (% of Total Consolidated revenue) | (33.3 | ) | % | (15.9 | ) | % | (0.4 | ) | % | 3.6 | % | 12.1 | % | 12.7 | % | 8.9 | % | 2.1 | % | ||||||||||||||||||||
| Year-over-year growth (bps) | (7,611 | ) | 4,471 | 2,760 | 8,689 | 4,534 | 2,853 | 930 | (150 | ) | |||||||||||||||||||||||||||||
| Operating (Loss) Income TTM Excl SBC, Acq-Related | $ | (287,964 | ) | $ | (326,848 | ) | $ | (305,646 | ) | $ | (144,333 | ) | $ | 21,541 | $ | 155,784 | $ | 207,964 | $ | 203,715 | |||||||||||||||||||
| Operating Margin TTM Excl SBC, Acq-Related (% of Total Consolidated TTM revenue) | (49.0 | ) | % | (34.7 | ) | % | (23.7 | ) | % | (9.0 | ) | % | 1.1 | % | 7.6 | % | 9.5 | % | 8.7 | % | |||||||||||||||||||
| Year-over-year growth (bps) | (7,208 | ) | (1,333 | ) | 245 | 4,887 | 5,011 | 4,229 | 3,320 | 1,770 | |||||||||||||||||||||||||||||
| Operating (Loss) Income | $ | (117,148 | ) | $ | (101,027 | ) | $ | (239 | ) | $ | (14,972 | ) | $ | 39,639 | $ | 46,485 | $ | 25,438 | $ | (12,861 | ) | ||||||||||||||||||
| Year-over-year growth | N/A | (174 | ) | % | 100 | % | 96. | % | N/A | N/A | N/A | 14 | % | ||||||||||||||||||||||||||
| Operating Margin (% of Total Consolidated revenue) | (39.6 | ) | % | (25.7 | ) | % | (0.1 | ) | % | (3.0 | ) | % | 7.1 | % | 8.2 | % | 4.5 | % | (2.0 | ) | % | ||||||||||||||||||
| Year-over-year growth (bps) | (8,192 | ) | 6,949 | 6,838 | 19,213 | 4,673 | 3,391 | 457 | 100 | ||||||||||||||||||||||||||||||
| Operating (Loss) Income TTM | $ | (546,064 | ) | $ | (610,272 | ) | $ | (554,543 | ) | $ | (233,386 | ) | $ | (76,599 | ) | $ | 70,913 | $ | 96,590 | $ | 98,701 | ||||||||||||||||||
| Operating Margin TTM (% of Total Consolidated TTM revenue) | (92.8 | ) | % | (64.8 | ) | % | (43.0 | ) | % | (14.5 | ) | % | (4.1 | ) | % | 3.5 | % | 4.4 | % | 4.2 | % | ||||||||||||||||||
| Year-over-year growth (bps) | (11,533 | ) | (2,457 | ) | 1,427 | 11,983 | 8,875 | 6,824 | 4,740 | 1,870 | |||||||||||||||||||||||||||||
| Net (Loss) Income Attributable to Common Stockholders | (146,480 | ) | (107,406 | ) | (54,229 | ) | (65,379 | ) | (11,695 | ) | 28,386 | (2,979 | ) | (81,089 | ) | ||||||||||||||||||||||||
| Weighted Average Basic Shares Outstanding | 307,849 | 303,415 | 307,605 | 528,422 | 644,097 | 647,150 | 653,224 | 655,678 | |||||||||||||||||||||||||||||||
| Weighted Average Diluted Shares Outstanding (5) | 307,849 | 303,415 | 307,605 | 528,422 | 644,097 | 663,123 | 653,224 | 655,678 | |||||||||||||||||||||||||||||||
| Net (Loss) Earnings per Share | |||||||||||||||||||||||||||||||||||||||
| Basic | $ | (0.48 | ) | $ | (0.35 | ) | $ | (0.18 | ) | $ | (0.12 | ) | $ | (0.02 | ) | $ | 0.04 | $ | (0.00 | ) | $ | (0.12 | ) | ||||||||||||||||
| Diluted | $ | (0.48 | ) | $ | (0.35 | ) | $ | (0.18 | ) | $ | (0.12 | ) | $ | (0.02 | ) | $ | 0.04 | $ | (0.00 | ) | $ | (0.12 | ) | ||||||||||||||||
| Supplemental Financial Information and Business Metrics(13) | ||||||||||||||||||||||||||||||||||||||||
| (in thousands, except per share and headcount data and TTM | ||||||||||||||||||||||||||||||||||||||||
| Gross Billings / Average Active Customer) | ||||||||||||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||||||||||||
| Q1 2011 (8) | Q2 2011 | Q3 2011 | Q4 2011 | Q1 2012 | Q2 2012 | Q3 2012 | Q4 2012 | |||||||||||||||||||||||||||||||||
| Depreciation and Amortization | ||||||||||||||||||||||||||||||||||||||||
| North America | $ | 1,273 | $ | 1,910 | $ | 2,817 | $ | 4,515 | $ | 5,004 | $ | 6,669 | $ | 8,153 | $ | 10,754 | ||||||||||||||||||||||||
| International | 6,325 | 6,188 | 4,241 | 4,786 | 6,712 | 6,141 | 7,157 | 5,211 | ||||||||||||||||||||||||||||||||
| Consolidated | $ | 7,598 | $ | 8,098 | $ | 7,058 | $ | 9,301 | $ | 11,716 | $ | 12,810 | $ | 15,310 | $ | 15,965 | ||||||||||||||||||||||||
| The following is a quarterly reconciliation of Operating (Loss) Income, excluding stock-based compensation and acquisition-related expense (benefit), net, to the most comparable U.S. GAAP measure, “Operating (Loss) Income." (6) | ||||||||||||||||||||||||||||||||||||||||
| Operating (Loss) Income, excluding stock-based compensation and acquisition-related expense | $ | (98,284 | ) | $ | (62,309 | ) | $ | (1,692 | ) | $ | 17,952 | $ | 67,590 | $ | 71,934 | $ | 50,488 | $ | 13,703 | |||||||||||||||||||||
| Stock-based Compensation | (18,864 | ) | (38,718 | ) | (3,340 | ) | (32,668 | ) | (28,003 | ) | (27,084 | ) | (22,619 | ) | (26,411 | ) | ||||||||||||||||||||||||
| Acquisition-related expense (benefit), net | - | - | 4,793 | (256 | ) | 52 | 1,635 | (2,431 | ) | (153 | ) | |||||||||||||||||||||||||||||
| Operating (Loss) Income | $ | (117,148 | ) | $ | (101,027 | ) | $ | (239 | ) | $ | (14,972 | ) | $ | 39,639 | $ | 46,485 | $ | 25,438 | $ | (12,861 | ) | |||||||||||||||||||
| The following is a trailing twelve months reconciliation of Operating (Loss) Income, excluding stock-based compensation and acquisition-related expense (benefit), net, to the most comparable U.S. GAAP measure, “Operating (Loss) Income." (6) | ||||||||||||||||||||||||||||||||||||||||
| Operating (Loss) Income, excluding stock-based compensation and acquisition-related expense TTM | $ | (287,964 | ) | $ | (326,848 | ) | $ | (305,646 | ) | $ | (144,333 | ) | $ | 21,541 | $ | 155,784 | $ | 207,964 | $ | 203,715 | ||||||||||||||||||||
| Stock-based Compensation | (54,916 | ) | (89,674 | ) | (88,351 | ) | (93,590 | ) | (102,729 | ) | (91,095 | ) | (110,374 | ) | (104,117 | ) | ||||||||||||||||||||||||
| Acquisition-related expense (benefit), net | (203,184 | ) | (193,750 | ) | (160,546 | ) | 4,537 | 4,589 | 6,224 | (1,000 | ) | (897 | ) | |||||||||||||||||||||||||||
| Operating (Loss) Income TTM | $ | (546,064 | ) | $ | (610,272 | ) | $ | (554,543 | ) | $ | (233,386 | ) | $ | (76,599 | ) | $ | 70,913 | $ | 96,590 | $ | 98,701 | |||||||||||||||||||
| The following is a quarterly reconciliation of foreign exchange rate neutral Gross Billings growth from the comprable quarterly periods of the prior year to reported Gross billings growth from the comprable quarterly periods of the prior year.(7) | ||||||||||||||||||||||||||||||||||||||||
| International Gross Billings, excluding FX | N/A | 4,587 | % | 1,021 | % | 287 | % | 138 | % | 45 | % | (4 | ) | % | 9 | % | ||||||||||||||||||||||||
| FX Effect | N/A | 470 | % | 94 | % | (4 | ) | % | (11 | ) | % | (13 | ) | % | (8 | ) | % | (3 | ) | % | ||||||||||||||||||||
| International Gross Billings | N/A | 5,057 | % | 1,115 | % | 283 | % | 127 | % | 32 | % | (12 | ) | % | 6 | % | ||||||||||||||||||||||||
| Consolidated Gross Billings, excluding FX | 1,378 | % | 859 | % | 465 | % | 198 | % | 108 | % | 47 | % | 11 | % | 25 | % | ||||||||||||||||||||||||
| FX Effect | 27 | % | 57 | % | 31 | % | (2 | ) | % | (5 | ) | % | (9 | ) | % | (6 | ) | % | (1 | ) | % | |||||||||||||||||||
| Condolidated Gross Billings | 1,405 | % | 916 | % | 496 | % | 196 | % | 103 | % | 38 | % | 5 | % | 24 | % | ||||||||||||||||||||||||
| The following is a quarterly reconciliation of foreign exchange rate neutral Revenue growth from the comprable quarterly periods of the prior year to reported Revenue growth from the comprable quarterly periods of the prior year.(7) | ||||||||||||||||||||||||||||||||||||||||
| International Revenue, excluding FX | N/A | 7,013 | % | 868 | % | 276 | % | 112 | % | 44 | % | 13 | % | (14 | ) | % | ||||||||||||||||||||||||
| FX Effect | N/A | 696 | % | 79 | % | (3 | ) | % | (10 | ) | % | (13 | ) | % | (10 | ) | % | (2 | ) | % | ||||||||||||||||||||
| International Revenue | N/A | 7,709 | % | 947 | % | 273 | % | 102 | % | 31 | % | 3 | % | (16 | ) | % | ||||||||||||||||||||||||
| Consolidated Revenue, excluding FX | 1,332 | % | 858 | % | 401 | % | 188 | % | 95 | % | 53 | % | 38 | % | 31 | % | ||||||||||||||||||||||||
| FX Effect | 26 | % | 57 | % | 25 | % | (2 | ) | % | (6 | ) | % | (8 | ) | % | (6 | ) | % | (1 | ) | % | |||||||||||||||||||
| Consolidated Revenue | 1,358 | % | 915 | % | 426 | % | 186 | % | 89 | % | 45 | % | 32 | % | 30 | % | ||||||||||||||||||||||||
| Cash Flow | ||||||||||||||||||||||||||||||||||||||||
| Operating cash flow (TTM) | $ | 91,928 | $ | 128,316 | $ | 173,291 | $ | 290,447 | $ | 356,221 | $ | 392,517 | $ | 370,194 | $ | 266,834 | ||||||||||||||||||||||||
| Purchases of property, equipment and capitalized software, net (TTM) | (24,780 | ) | (31,949 | ) | (38,414 | ) | (43,811 | ) | (45,932 | ) | (62,401 | ) | (69,788 | ) | (95,836 | ) | ||||||||||||||||||||||||
| Free cash flow (TTM) (9) | $ | 67,148 | $ | 96,367 | $ | 134,877 | $ | 246,636 | $ | 310,289 | $ | 330,116 | $ | 300,406 | $ | 170,998 | ||||||||||||||||||||||||
| Net cash (used in) provided by investing activities (TTM) | $ | (55,510 | ) | $ | (83,226 | ) | $ | (124,301 | ) | $ | (147,433 | ) | $ | (149,583 | ) | $ | (184,552 | ) | $ | (177,133 | ) | $ | (194,979 | ) | ||||||||||||||||
| Net cash provided by (used in) financing activities (TTM) | $ | 142,549 | $ | 125,404 | $ | 130,593 | $ | 867,205 | $ | 746,824 | $ | 771,404 | $ | 765,503 | $ | 12,095 | ||||||||||||||||||||||||
| Other Metrics: | ||||||||||||||||||||||||||||||||||||||||
| Active Customers (10) | ||||||||||||||||||||||||||||||||||||||||
| North America | 8,213 | 11,039 | 12,823 | 14,084 | 14,876 | 15,121 | 15,983 | 17,215 | ||||||||||||||||||||||||||||||||
| International | 7,163 | 11,998 | 16,083 | 19,658 | 21,974 | 22,925 | 23,542 | 23,834 | ||||||||||||||||||||||||||||||||
| Total Active Customers | 15,376 | 23,037 | 28,906 | 33,742 | 36,850 | 38,046 | 39,525 | 41,049 | ||||||||||||||||||||||||||||||||
| TTM Gross Billings / Average Active Customer (11) | $ | 169 | $ | 174 | $ | 189 | $ | 187 | $ | 179 | $ | 165 | $ | 149 | $ | 144 | ||||||||||||||||||||||||
| Headcount | ||||||||||||||||||||||||||||||||||||||||
| Sales (12) | 3,556 | 4,850 | 4,853 | 5,196 | 5,735 | 5,587 | 5,087 | 4,677 | ||||||||||||||||||||||||||||||||
| % North America | 19 | % | 20 | % | 21 | % | 20 | % | 21 | % | 20 | % | 24 | % | 25 | % | ||||||||||||||||||||||||
| % International | 81 | % | 80 | % | 79 | % | 80 | % | 79 | % | 80 | % | 76 | % | 75 | % | ||||||||||||||||||||||||
| Other | 3,551 | 4,775 | 5,565 | 6,275 | 6,813 | 7,233 | 6,779 | 6,717 | ||||||||||||||||||||||||||||||||
| Total Headcount | 7,107 | 9,625 | 10,418 | 11,471 | 12,548 | 12,820 | 11,866 | 11,394 | ||||||||||||||||||||||||||||||||
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(1) |
Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds. Includes direct billings and third party and other billings. |
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(2) |
Third party revenue is related to sales for which the company acts as a marketing 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 included in cost of revenue. |
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(3) |
Cost of revenue is comprised of direct and indirect costs incurred to generate revenue. Direct cost of revenue includes the purchase price of consumer products, warehousing, shipping costs and inventory markdowns. Third party cost of revenue includes estimated refunds for which the merchant's share is not recoverable. Other costs incurred to generate revenue are allocated to cost of third party revenue, direct revenue and other revenue in proportion to relative gross billings during the period. |
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(4) |
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. |
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(5) |
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. |
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(6) |
Operating income excluding stock-based compensation and acquisition-related activities is a non-GAAP financial measure. The Company reconciles this measure to the most comparable U.S. GAAP measure, ‘‘Operating Income,” for the periods presented. |
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(7) |
Foreign Exchange Rate neutral operating results are non-GAAP financial measures. The Company reconciles these measures to the most comparable U.S. GAAP measures, ‘‘Gross Billings” and "Revenue," for the periods presented. |
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(8) |
Year-over-year growth is unavailable for select international growth measures as Groupon did not commence international operations until the second quarter of 2010. |
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(9) |
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. See "Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities." |
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(10) |
Reflects the total number of unique accounts who have purchased Groupons during the trailing twelve months. |
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(11) |
Reflects the total gross billings generated in the trailing twelve months per average active customer over that period. |
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(12) |
Includes inside and outside merchant sales representatives, as well as sales support. |
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(13) |
The definition, methodology, and appropriateness of each of our supplemental metrics is reviewed periodically. As a result, metrics are subject to removal and/or change. |