Groupon, Inc.

Previous wording

We use several operating and financial metrics to assess the progress of our business and make strategic decisions. Certain of the financial metrics are reported in accordance with GAAP and certain of those metrics are considered non-GAAP financial measures. As our business evolves, we may make changes to the key financial and operating metrics that we use to measure our business. For further information and reconciliations to the most applicable financial measures under GAAP, refer to our discussion under Non-GAAP Financial Measures in the Results of Operations section.

Current wording

We use several operating and financial metrics to assess the progress of our business and make strategic decisions. Certain of the financial metrics are reported in accordance with GAAP and certain of those metrics are considered non-GAAP financial measures. As our business evolves, we may make changes to the key financial and operating metrics that we use to measure our business. For further information and reconciliations to the most applicable financial measures under GAAP, refer to our discussion under the Non-GAAP Financial Measures section.

Previous wording

•Gross billings is the total dollar value of customer purchases of goods and services. Gross billings is presented net of customer refunds, order discounts and sales and related taxes. The substantial majority of our revenue transactions are comprised of sales of vouchers and similar transactions in which we collect the transaction price from the customer and remit a portion of the transaction price to the third-party merchant who will provide the related goods or services. For these transactions, gross billings differs from Revenue reported in our Condensed Consolidated Statements of Operations, which is presented net of the merchant's share of the transaction price. Gross billings is an indicator of our growth and business performance as it measures the dollar volume of transactions generated through our marketplaces. Tracking gross billings also allows us to monitor the percentage of gross billings that we are able to retain after payments to merchants. However, we are focused on achieving long-term gross profit and Adjusted EBITDA growth.

Current wording

•Gross billings is the total dollar value of customer purchases of goods and services. Gross billings is presented net of customer refunds, order discounts and sales and related taxes. The substantial majority of our revenue transactions are comprised of sales of vouchers and similar transactions in which we collect the transaction price from the customer and remit a portion of the transaction price to the third-party merchant who will provide the related goods or services. For these transactions, gross billings differs from Revenue reported in our Condensed Consolidated Statements of Operations, which is presented net of the merchant's share of the transaction price. Gross billings is an indicator of our growth and business performance as it measures the dollar volume of transactions generated through our marketplaces. Tracking gross billings also allows us to monitor the percentage of gross billings that we are able to retain after payments to merchants.

Previous wording

•Units are the number of purchases during the reporting period, before refunds and cancellations, made either through one of our online marketplaces, a third-party marketplace, or directly with a merchant for which we earn a commission. We do not include purchases with retailers using digital coupons accessed through our websites or mobile applications in our units metric. We consider units to be an important indicator of the total volume of business conducted through our marketplaces. We report units on a gross basis prior to the consideration of customer refunds and therefore units are not always a good proxy for gross billings.

Current wording

•Units are the number of purchases during the reporting period, before refunds and cancellations, made either through one of our online marketplaces, a third-party marketplace, or directly with a merchant for which we earn a commission. We do not include purchases with retailers using digital coupons accessed through our websites or mobile applications in our units metric. We consider units to be an important indicator of the total volume of business conducted through our marketplaces.

Previous wording

Our gross billings and units for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Current wording

Our gross billings and units for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Previous wording

•Revenueis earned through transactions which we generate commissions by selling goods or services on behalf of third-party merchants. Revenue from those transactions is reported on a net basis as the purchase price collected from the customer for the offering less an agreed upon portion of the purchase price paid to the third-party merchant. Revenue also includes commissions we earn when customers make purchases with retailers using digital coupons accessed through our digital properties.

Current wording

•Revenueis earned through transactions for which we generate commissions by selling goods or services on behalf of third-party merchants. Revenue from those transactions is reported on a net basis as the purchase price collected from the customer for the offering less an agreed upon portion of the purchase price paid to the third-party merchant. Revenue also includes commissions we earn when customers make purchases with retailers using digital coupons accessed through our digital properties.

Previous wording

•Adjusted EBITDA is a non-GAAP financial measure that we define as Net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, and other special charges and credits, including items that are unusual in nature or infrequently occurring. For further information and a reconciliation to Net income (loss) from continuing operations, refer to our discussion under Non-GAAP Financial Measures in the Results of Operations section.

Current wording

•Adjusted EBITDA is a non-GAAP financial measure that we define as Net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, and other special charges and credits, including items that are unusual in nature or infrequently occurring. For further information and a reconciliation to Net income (loss) from continuing operations, refer to our discussion under the Non-GAAP Financial Measures section.

Previous wording

•Free cash flow is a non-GAAP financial measure that comprises Net cash provided by (used in) operating activities from continuing operations from operations less purchases of property and equipment and capitalized software. For further information and a reconciliation to Net cash provided by (used in) operating activities from continuing operations, refer to our discussion in the Liquidity and Capital Resources section.

Current wording

•Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software. For further information and a reconciliation to Net cash provided by (used in) operating activities from continuing operations, refer to our discussion in the Liquidity and Capital Resources section.

Previous wording

The following table presents the above financial metrics for the three months ended March 31, 2025 and 2024 (in thousands):

Current wording

The following table presents the above financial metrics for the three and six months ended June 30, 2025 and 2024 (in thousands):

Previous wording

Acquiring and retaining customers. To acquire and retain customers to drive higher volumes on our platform from new and existing customers, we are focused on strengthening our product offering, improving the attractiveness of our offerings, and enhancing the performance of our marketing campaigns.

Current wording

Acquiring and retaining customers. To acquire and retain customers to drive higher volumes on our platform from new and existing customers, we are focused on strengthening our product offerings, improving the attractiveness of our offerings, and enhancing the performance of our marketing campaigns.

Previous wording

North America segment gross billings and units for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Current wording

North America segment gross billings and units for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Previous wording

North America gross billings and TTM active customers increased by $13.6 million and 0.2 million, while units decreased 0.1 million for the three months ended March 31, 2025 compared with the prior year period. As a result of our supply transformation efforts and favorable refund rates our Local category experienced growth in gross billings, active customers and units. The Local category growth is offset by a de-emphasis on our Goods category evidenced by a decrease of our Goods active customers that resulted in fewer unit sales and lower gross billings year over year in the Goods category.

Current wording

North America gross billings, units and TTM active customers increased by $45.8 million, 0.5 million and 0.5 million for the three months ended June 30, 2025 compared with the prior year period. Our Local Category experienced growth in gross billings driven by our transformation efforts. The Local category growth is offset by a de-emphasis on our Goods category evidenced by a decrease of our Goods active customers that resulted in fewer unit sales and lower gross billings year over year in the Goods category.

Previous wording

North America segment revenue, cost of revenue and gross profit for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Current wording

North America segment revenue, cost of revenue and gross profit for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Previous wording

North America revenue, cost of revenue and gross profit decreased by $3.0 million, $1.8 million and $1.3 million for the three months ended March 31, 2025 compared with the prior year period. While Local billings grew year over year, our Local revenue remained relatively flat as a result of higher redemption rates as well as lower deal margins. Our Goods revenue decrease was driven by a de-emphasis on our Goods category. The decrease in cost of revenue is primarily due to a decrease in amortization of internally-developed software relating to customer-facing applications. Our Travel category showed slight decreased activity year over year due to lower site traffic. Gross profit decreased due to a decrease in revenue.

Current wording

North America revenue and gross profit increased by $1.6 million and $2.6 million, while cost of revenue decreased by $0.9 million for the three months ended June 30, 2025 compared with the prior year period. Our Local revenue increased 3%, lagging the rate of growth in gross billings, as a result of higher redemption rates as well as lower deal margins and other factors, such as promotional discounts. The decrease in cost of revenue is primarily due to a decrease in amortization of internally-developed software relating to customer-facing applications. Gross profit increased due to an increase in revenue.

Previous wording

North America marketing and contribution profit for the three months ended March 31, 2025 and 2024 was as follows (in thousands):

Current wording

North America marketing and contribution profit for the three and six months ended June 30, 2025 and 2024 was as follows (in thousands):

Previous wording

International segment gross billings and units for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Current wording

International segment gross billings and units for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Previous wording

International gross billings, units and TTM active customers decreased by $8.3 million, 0.5 million and 0.9 million for the three months ended March 31, 2025 compared with the prior year period. The Local category decrease was primarily attributable to the exit of our Local business in Italy and a decline in site traffic. There was a year-over-year decrease of $4.6 million in Local gross billings, as well as a decrease of 0.4 million in units, as a direct result of our exit of Italy. The decline in our Goods and Travel categories were primarily attributable to an overall decline in site traffic. In addition, there was a $2.4 million unfavorable impact on gross billings from year-over-year changes in foreign currency exchange rates.

Current wording

International gross billings and TTM active customers decreased by $2.7 million and 0.5 million, while units increased by 0.1 million for the three months ended June 30, 2025 compared with the prior year period. The decline in the Local category was mainly due to the divestiture of Giftcloud, along with our withdrawal from the Italian market, which had a smaller impact. Excluding Giftcloud and Italy, International Local gross billings increased 15%, driven by our transformation efforts. The decline in our Goods and Travel categories were primarily attributable to an overall decline in site traffic. In addition, there was a $4.2 million favorable impact on gross billings from year-over-year changes in foreign currency exchange rates, partially offsetting the decline in activity.

Previous wording

International segment revenue, cost of revenue and gross profit for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Current wording

International segment revenue, cost of revenue and gross profit for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Previous wording

International revenue and gross profit decreased by $2.9 million and $3.0 million, while cost of revenue increased $0.1 million for the three months ended March 31, 2025 compared with the prior year period. The Local category decrease was primarily attributable to the exit of our Local business in Italy and a decline in site traffic. Excluding Italy, the Local category revenue grew year over year. The decline in our Goods and Travel categories were primarily attributable to an overall decline in site traffic. Revenue and gross profit also had unfavorable impacts of $0.6 million and $0.5 million from year-over-year changes in foreign currency exchange rates. Although revenue declined year over year due to our exit from Italy, cost of revenue increased slightly, as cloud-related expenses remained unchanged despite reduced headcount.

Current wording

International revenue and gross profit decreased by $0.6 million and $0.8 million, while cost of revenue increased $0.2 million for the three months ended June 30, 2025 compared with the prior year period. The decline in the Local category was mainly due to the divestiture of Giftcloud, along with our withdrawal from the Italian market, which had a smaller impact. Excluding Giftcloud and Italy, International Local revenue increased 7%. The decline in our Goods and Travel categories were primarily attributable to an overall decline in site traffic. Revenue and gross profit also had favorable impacts of $1.2 million and $1.0 million from year-over-year changes in foreign currency exchange rates, partially offsetting the decline in activity.

Previous wording

International marketing and contribution profit for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Current wording

International marketing and contribution profit for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Previous wording

International marketing expense and marketing expense as a percentage of revenue increased for the three months ended March 31, 2025 compared with the prior year period, primarily due to increased investment in our online marketing spend paired with decreased revenue year over year.

Current wording

International contribution profit decreased for the six months ended June 30, 2025 compared with the prior year period, primarily due to decreased revenue year over year paired with increased investment in our online marketing spend.

Previous wording

Operating expenses for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Current wording

Operating expenses for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Previous wording

Marketing expense and marketing expense as a percentage of gross profit increased for the three months ended March 31, 2025 compared with the prior year period, due to an increased investment in our North America performance marketing campaigns.

Current wording

Marketing expense and marketing expense as a percentage of gross profit increased for the three months ended June 30, 2025 compared with the prior year period, due to an increased investment in our performance marketing campaigns.

Previous wording

Other income (expense), net for the three months ended March 31, 2025 and 2024 was as follows (in thousands):

Current wording

Other income (expense), net for the three and six months ended June 30, 2025 and 2024 was as follows (in thousands):

Previous wording

The change in Other income (expense), net for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 is primarily related to a $21.9 million favorable change in net foreign currency gains (losses) which primarily resulted from U.S. dollar-denominated intercompany balances with our foreign subsidiaries. The gains, net were primarily driven by the Euro appreciation against the U.S. dollar during the three months ended March 31, 2025.

Current wording

The change in Other income (expense), net for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 is primarily related to a $24.8 million favorable change in net foreign currency gains (losses) which primarily resulted from U.S. dollar-denominated intercompany balances with our foreign subsidiaries. The gains, net were primarily driven by the Euro appreciation against the U.S. dollar during the three months ended June 30, 2025. The favorable change in net foreign currency gains (losses) is offset by an increase in interest expense for the three months ended June 30, 2025 due to the issuance of the 2027 Notes.

Previous wording

Provision (benefit) for income taxes for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Current wording

Provision (benefit) for income taxes for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Previous wording

The effective tax rates for the three months ended March 31, 2025 and 2024 were impacted by the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets and in the quarter ended March 31, 2025, a benefit due to a tax refund received during the quarter. For the three months ended March 31, 2025 and 2024, we continue to maintain a full valuation allowance against all U.S. federal and state deferred tax assets. We expect that our consolidated effective tax rate in future periods may continue to differ significantly from the U.S. federal income tax rate as a result of our tax obligations in jurisdictions with profits and valuation allowances in jurisdictions with losses.

Current wording

The effective tax rates for the three and six months ended June 30, 2025 and 2024 were impacted by the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets. For the three and six months ended June 30, 2025 and 2024, we continue to maintain a full valuation allowance against all U.S. federal and state deferred tax assets. We expect that our consolidated effective tax rate in future periods may continue to differ significantly from the U.S. federal income tax rate as a result of our tax obligations in jurisdictions with profits and valuation allowances in jurisdictions with losses.

Previous wording

We exclude stock-based compensation expense and depreciation and amortization because they are primarily non-cash in nature and we believe that non-GAAP financial measures excluding those items provide meaningful supplemental information about our operating performance and liquidity. For the three months ended March 31, 2025 and 2024, special charges and credits included charges related to our to our Italy Restructuring Plan, 2022 Restructuring Plan and 2020 Restructuring Plan. We exclude special charges and credits from Adjusted EBITDA because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons with our historical results.

Current wording

We exclude stock-based compensation expense and depreciation and amortization because they are primarily non-cash in nature and we believe that non-GAAP financial measures excluding those items provide meaningful supplemental information about our operating performance and liquidity. For the three and six months ended June 30, 2025 and 2024, special charges and credits included charges related to our to our Italy Restructuring Plan, 2022 Restructuring Plan and 2020 Restructuring Plan, as well as gain on sale of assets, gain on sale of business and foreign VAT assessments. We exclude special charges and credits from Adjusted EBITDA because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons with our historical results.

Previous wording

The following is a reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure, Net income (loss) from continuing operations, for the three months ended March 31, 2025 and 2024 (in thousands):

Current wording

The following is a reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure, Net income (loss) from continuing operations, for the three and six months ended June 30, 2025 and 2024 (in thousands):

Previous wording

(1) Stock-based compensation excludes expense related to the 2024 Executive PSUs that are required to be settled in cash. Refer to Item 1, Note 7, Stockholder's Equity for more information.

Current wording

(1) Stock-based compensation excludes expense related to the liability-classified 2024 Executive PSUs. Refer to Item 1, Note 8, Stockholders' Equity (Deficit) and Compensation Arrangements for more information.

Previous wording

The following tables represent the effect on our Condensed Consolidated Statements of Operations from changes in exchange rates versus the U.S. dollar for the three months ended March 31, 2025 (in thousands):

Current wording

The following tables represent the effect on our Condensed Consolidated Statements of Operations from changes in exchange rates versus the U.S. dollar for the three and six months ended June 30, 2025 (in thousands):

Previous wording

Our principal source of liquidity is our cash balance totaling $226.8 million as of March 31, 2025. The Company’s cash requirements are subject to change as business conditions warrant and opportunities arise. Additionally, with the Rights Offering, termination of our Credit Agreement in February 2024, and the Exchange and Subscription Agreements in November 2024, we believe that the Company has sufficient liquidity to support its overall ongoing operational needs within the next 12 months, as well as the repayment of the 2026 Notes upon maturity in March 2026.

Current wording

Our principal source of liquidity is our cash balance totaling $262.6 million as of June 30, 2025. The Company’s cash requirements are subject to change as business conditions warrant and opportunities arise. Additionally, with the Rights Offering, termination of our Credit Agreement in February 2024, the Exchange and Subscription Agreements in November 2024, and the Exchange Agreement in July 2025, we believe that the Company has sufficient liquidity to support its overall ongoing operational needs within the next 12 months, as well as the repayment of the remaining outstanding $33.7 million principal of the 2026 Notes upon maturity in March 2026.

Previous wording

We are subject to claims for tax assessments by foreign jurisdictions, including a proposed Assessment for $123.5 million (€114.2 million), inclusive of estimated incremental interest from the original Assessment. The subsidiary subject to the Assessment is Groupon S.r.l., one of the Company's Italian subsidiaries with operations formerly relating specifically to the local voucher business in Italy. In December 2024, Groupon S.r.l. received an unfavorable ruling at the second-level tax court. The Company continues to believe that the Assessment is without merit and Groupon S.r.l. has appealed to the Italian Supreme Court. If Groupon S.r.l. loses that appeal, Groupon S.r.l. plans to further challenge the Assessment and seek relief in an international mutual agreement procedure that would involve the tax authorities of Ireland and Italy.

Current wording

We are subject to claims for tax assessments by foreign jurisdictions, including two pending assessments in Italy, involving Groupon S.r.l., one of the Company's Italian subsidiaries. The first is the Italy 2012 Assessment for $134.4 million (€114.7 million), inclusive of estimated incremental interest from the original assessment. The second is the Italy 2017 Assessment for $35.1 million (€29.9 million).

Previous wording

Our net cash flows from operating, investing and financing activities from continuing operations for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Current wording

Our net cash flows from operating, investing and financing activities from continuing operations for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Previous wording

Our free cash flow for the three months ended March 31, 2025 and 2024 and a reconciliation to the most comparable GAAP financial measure, Net cash provided by (used in) operating activities from continuing operations, for those periods were as follows (in thousands):

Current wording

Our free cash flow for the three and six months ended June 30, 2025 and 2024 and a reconciliation to the most comparable GAAP financial measure, Net cash provided by (used in) operating activities from continuing operations, for those periods were as follows (in thousands):

Previous wording

For the three months ended March 31, 2025, our net cash used in operating activities from continuing operations was $22.0 thousand as compared with net cash used in operating activities from continuing operations of $10.1 million in the prior period. The increase in operating cash flow for the current period is primarily attributed to the timing of accounts receivable and merchant payable. Specifically, we experienced faster collections from our payment processors, which led to a reduction in accounts receivable. This improvement in cash collections positively impacted our cash flows. Strategic supplier payments in late 2024 decreased merchant payable entering 2025, resulting in a lower beginning merchant payable balance for the current period. We resumed regular payment cycles during the three months ended March 31, 2025 which led to lower merchant payable activity, directly supporting improved cash flow in the current period.

Current wording

For the six months ended June 30, 2025, our net cash provided by operating activities from continuing operations was $28.4 million as compared with net cash provided by operating activities from continuing operations of $5.2 million in the prior period. The increase in operating cash flow for the current period is primarily attributed to the timing of merchant payments. Strategic supplier payments in late 2024 decreased merchant payable entering into 2025, resulting in a lower beginning merchant payable balance for the current period and improved cash flow over the comparable period. We resumed regular payment cycles during the six months ended June 30, 2025. Further, we have seen increased revenue and billings growth year-over-year.

Previous wording

For the three months ended March 31, 2025, our net cash used in financing activities from continuing operations was $0.5 million as compared with net cash provided by financing activities from continuing operations of $35.3 million in the prior period. The year-over-year change from financing activities is primarily due to $79.6 million of proceeds received from the Rights Offering, partially offset by an increase of $42.8 million in payments of borrowings under our revolving credit facility for the three months ended March 31, 2024.

Current wording

For the six months ended June 30, 2025, our net cash used in financing activities from continuing operations was $3.1 million as compared with net cash provided by financing activities from continuing operations of $33.6 million in the prior period. The year-over-year change from financing activities is primarily due to $79.6 million of proceeds received from the Rights Offering, partially offset by an increase of $42.8 million in payments of borrowings under our revolving credit facility for the six months ended June 30, 2024.

Previous wording

Matters related to the 2026 Notes and 2027 Notes

Current wording

Matters related to the 2026 Notes, 2027 Notes and 2030 Notes

Previous wording

On November 19, 2024, we issued $197.3 million aggregate principal amount of 2027 Notes. From the issuance, we (i) exchanged $176.3 million aggregate principal amount of the 2026 Notes and (ii) issued and sold to certain Offering Participants $21.0 million additional principal amount of the 2027 Notes for gross cash proceeds of $20.0 million. We used the $20.0 million of the cash proceeds to offset the cash outflows associated with the debt issuance costs as well as general corporate purposes.

Current wording

On November 19, 2024, we issued $197.3 million aggregate principal amount of 2027 Notes. From the issuance, we (i) exchanged $176.3 million aggregate principal amount of the 2026 Notes and (ii) issued and sold to certain 2027 Notes Offering Participants $21.0 million additional principal amount of the 2027 Notes for gross cash proceeds of $20.0 million. We used the $20.0 million of the cash proceeds to offset the cash outflows associated with the debt issuance costs as well as general corporate purposes.

Previous wording

The 2027 Notes bear interest at a rate of 6.25% per annum, payable semi-annually March 15 and September 15 of each year, and will mature March 15, 2027, subject to earlier repurchase or conversion. We may be required to pay additional interest of 2.5% per annum of the 2027 Notes in the event that we fail to pledge certain assets as part of the collateral for the 2027 Notes, unless such assets are sold, by November 20, 2025.

Current wording

The 2027 Notes bear interest at a rate of 6.25% per annum, payable semi-annually March 15 and September 15 of each year, and will mature March 15, 2027, subject to earlier repurchase or conversion.

Previous wording

As of March 31, 2025, we had $85.4 million in cash held by our international subsidiaries, which is primarily denominated in British Pounds Sterling, Euros, Indian Rupees and Australian dollars. In general, it is our practice and intention to re-invest the earnings of our non-U.S. subsidiaries in those operations or remit such earnings in a tax-efficient manner. We have not, nor do we currently anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business.

Current wording

As of June 30, 2025, we had $83.1 million in cash held by our international subsidiaries, which is primarily denominated in British Pounds Sterling, Euros, Indian Rupees and Australian dollars. In general, it is our practice and intention to re-invest the earnings of our non-U.S. subsidiaries in those operations or remit such earnings in a tax-efficient manner. We have not, nor do we currently anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business.