Groupon, Inc.
For the period ended Mar 31, 2026. Filed May 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
GRPN$15.49-0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001628280-25-050187
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001628280-26-032124
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 126 previous paragraphs and 109 current paragraphs.
56 unchanged; 40 reworded; 13 added; 27 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 19 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
In the first quarter of 2026, we launched Project Foundry, a company-wide initiative to transform our operating model by embedding AI agents into the core of every function. The goal of Foundry is not the launch of a single feature or capability, but to re-architect how work is performed internally so the Company operates with the speed required to succeed in an AI-native world. The financial impact of this initiative is not yet reasonably estimable, and we expect Foundry to influence how we operate over the remainder of 2026 and in future periods.
Current report
As part of Project Foundry and the Company’s strategy to become an AI-native company, management is evaluating a range of operational initiatives to better align the Company’s cost structure with this AI-native operating model, improve its operational efficiency and become more nimble, and position the Company for
Current report
growth. These initiatives, including significant restructuring actions, have not been finalized or approved by the Board of Directors. The Company expects that it will initiate these actions in the second quarter with a reduction of its global headcount by approximately 15% and intends to announce further details about this and additional significant cost-reduction and automation actions once those plans are finalized and approved.
Current report
•Cost of revenue consists of direct and certain indirect costs incurred to generate revenue. Costs incurred to generate revenue include credit card processing fees, editorial costs, compensation expense for technology support personnel who are responsible for maintaining the infrastructure of our websites, amortization of internal-use software relating to customer-facing applications, web hosting and other processing fees attributed to the cost of service.
Current report
North America gross billings and units decreased by $0.5 million and 0.4 million, while TTM active customers increased by 0.5 million for the three months ended March 31, 2026 compared with the prior year period. Within our Local category, gross billings increased 2.0% year-over-year and unit volume declined, reflecting growth in transaction value that more than offset a decline in transaction volume. From a supply perspective, our Local category growth was led by our Things to Do offerings, partially offset by a deceleration in our Small Business merchant base, softness in Health, Beauty & Wellness and pressure from our Enterprise channel. From a demand perspective, paid channels delivered strong year-over-year growth, partially offset by headwinds in our managed and organic channels and the negative impact of severe winter weather in January and February.
Current report
International revenue, gross profit and cost of revenue increased by $1.2 million, $0.7 million, and $0.5 million for the three months ended March 31, 2026 compared with the prior year period. Excluding Giftcloud, International Local revenue increased 18.8%, consistent with the drivers of gross billings discussed above. The increase in cost of revenue was primarily due to Giftcloud charges in the current year that were intercompany transactions pre-divestiture in the prior year. Revenue and gross profit also hadfavorable impacts of $2.5 million and $2.2 million from year-over-year changes in foreign currency exchange rates.
Current report
International marketing expense and marketing expense as a percentage of revenue increased for the three months ended March 31, 2026 compared with the prior year period, primarily due to a higher investment in paid channels to capitalize on expanded supply and demand opportunities.
Current report
International contribution profit decreased for the three months ended March 31, 2026 compared with the prior year period, primarily due to higher marketing investment, partially offset by growth in gross profit.
Current report
For the three months ended March 31, 2026, our net cash used in operating activities from continuing operations was $10.0 million as compared with net cash used in operating activities from continuing operations of $22.0 thousand in the prior period. The increase in cash used in operating activities is primarily attributed to a larger decrease in accrued merchant and supplier payables during the three months ended March 31, 2026, compared to the prior year period. The larger decrease reflects higher accumulated accrued merchant and supplier payable balances entering the first quarter of 2026, driven by consolidated gross billings growth in the fourth quarter of 2025 compared with the fourth quarter of 2024.
Current report
For the three months ended March 31, 2026, our net cash used in investing activities from continuing operations was $3.6 million as compared with net cash used in investing activities from continuing operations of $3.7 million in the prior period. The net cash used in investing activities for both periods relates to purchases of property and equipment and capitalized software, which has remained consistent year-over-year.
Current report
Matters related to the Letters of Credit
Current report
See Item 1, Note 5, Financing Arrangements, for additional information regarding the Cash Collateral Agreement.
Current report
Matters related to the Notes
Removed paragraphs (27)
Previous report
North America gross billings, units and TTM active customers increased by $44.0 million, 0.4 million and 0.8 million for the three months ended September 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 report
North America gross billings and units increased by $103.4 million and 0.8 million for the nine months ended September 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 report
North America marketing expense and marketing expense as a percentage of revenue increased for the nine months ended September 30, 2025 compared with the prior year period, primarily driven by an increased investment in our performance marketing campaigns.
Previous report
North America contribution profit decreased for the nine months ended September 30, 2025 compared with the prior year period, primarily due to an increase in marketing expense.
Previous report
International gross billings and units decreased by $12.3 million and 0.4 million for nine months ended September 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, to a lesser extent. Excluding Giftcloud and Italy, International Local gross billings increased 11%, driven by our transformation efforts. The decline in our Goods category is primarily attributable to an overall decline in site traffic. In addition, there was a $6.5 million favorable impact on gross billings from year-over-year changes in foreign currency exchange rates, partially offsetting the decline in activity.
Previous report
International revenue and gross profit decreased by $0.8 million and $1.0 million, while cost of revenue increased $0.3 million for the three months ended September 30, 2025 compared with the prior year period. The decline in the Local category was mainly due to the divestiture of Giftcloud. Excluding Giftcloud, International Local revenue increased 8%. The decline in our Goods category is primarily attributable to an overall decline in site traffic. Revenue and gross profit also had favorable impacts of $1.3 million and $1.1 million from year-over-year changes in foreign currency exchange rates, partially offsetting the decline in activity.
Previous report
International revenue and gross profit decreased by $4.2 million and $4.8 million, while cost of revenue increased by $0.6 million 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, to a lesser extent. Excluding Giftcloud and Italy, International Local revenue increased 5%. The decline in our Goods and Travel categories is primarily attributable to an overall decline in site traffic. Revenue and gross profit also had favorable impacts of $1.9 million and $1.7 million from year-over-year changes in foreign currency exchange rates, partially offsetting the decline in activity.
Previous report
International marketing expense and marketing expense as a percentage of revenue increased for the three months ended September 30, 2025 compared with the prior year period, primarily due to increased investment in our online marketing spend.
Previous report
International contribution profit decreased for the three months ended September 30, 2025 compared with the prior year period, primarily due to increased investment in our online marketing spend paired with decreased revenue year over year.
Previous report
International marketing expense and marketing expense as a percentage of gross profit increased for the nine months ended September 30, 2025 compared with the prior year period, primarily due to increased investment in our online marketing spend.
Previous report
International contribution profit decreased for the nine months ended September 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 report
SG&A and SG&A as a percentage of gross profit decreased for the nine months ended September 30, 2025 compared with the prior year period, due to lower technology expenses from the usage of non-recurring indirect tax credits, partially offset by higher payroll costs. SG&A includes $2.0 million related to liability-classified 2024 Executive PSUs during the nine months ended September 30, 2025.
Previous report
The change in Other income (expense), net for the nine months ended September 30, 2025 as compared with the prior year period is prima rily related to aloss on extinguishment of debt of $99.9 million. The loss on extinguishment of debt consists of the difference between the fair value of the 2030 Notes at issuance and the net carrying amount of the 2026 Notes and the 2027 Notes exchanged. The loss was partially offset by a $26.6 million increase in net foreign currency gains (losses) which primarily resulted from U.S. dollar-denominated intercompany balances with our foreign subsidiaries. The increase is primarily driven by the Euro appreciation against the U.S. dollar during the nine months ended September 30, 2025 compared to thenine months ended September 30, 2024.
Previous report
Comparison of the Three and Nine Months Ended September 30, 2025 and 2024:
Previous report
(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 report
(2) The Foreign VAT assessments adjustment excludes related interest expense of $0.9 million for the three months ended September 30, 2024 and $1.7 million for the nine months ended September 30, 2024 as the interest expense is included within Other (income) expense, net. See Item 1, Note 7, Commitments and Contingencies, for additional information.
Previous report
(3) Other (income) expense, net Includes $99.9 million related to the loss on extinguishment of debt of the 2026 Notes and 2027 Notes in connection with the issuance of the 2030 Notes during the three and nine months ended September 30, 2025. See Item 1, Note 6, Financing Arrangements, for additional information.
Previous report
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 $134.9 million (€114.8 million), inclusive of estimated incremental interest from the original assessment. The second is the Italy 2017 Assessment for $35.1 million (€30.1 million).
Previous report
On August 5, 2025, Groupon S.r.l. and the Italian Tax Authority reached an agreement in principle to resolve the Italy 2012 and 2017 Assessments. With respect to the Italy 2012 Assessment, the agreement provides that the Italian Tax Authority would reduce the Italy 2012 Assessment from $134.9 million (€114.8 million) to $20.5 million (€17.5 million), against which approximately $10.1 million (€8.6 million) would be credited from previous installment payments made by Groupon S.r.l. With respect to the Italy 2017 Assessment, the agreement provides that the Italian Tax Authority would reduce the Italy 2017 Assessment from $35.1 million (€30.1 million) to approximately $4.8 million (€4.1 million). As such, under the agreement, Groupon S.r.l. would be obligated to pay $4.8 million in cash for the Italy 2017 Assessment. Accordingly, under the terms of the agreement, the combined amount of cash that Groupon S.r.l. would be obligated to pay for both the Italy 2012 Assessment and the Italy 2017 Assessment is approximately $15.2 million (€13.0 million).
Previous report
In October 2025, the Italian Tax Authority informed Groupon S.r.l., that the proposed agreement has been approved by the Administrative Review Committee, an Italian non-governmental oversight group, and the Central Directorate on Tax Audit for the Italian Internal Revenue Service.
Previous report
Groupon S.r.l. expects to receive a revised version of the Italy 2012 Assessment from the Italian Tax Authority that reflects the terms of the agreement, at which time the parties will voluntarily dismiss all pending appeals. A hearing is scheduled on December 5, 2025, at which time the parties expect to jointly seek judicial approval of the settlement of the Italy 2017 Assessment. Once finalized, Groupon S.r.l. could be required to pay all settled amounts before the end of 2025. Until such time that the revised assessments have been issued and agreed to and the settlement of the Italy 2017 Assessment receives judicial approval, the proposed settlement agreement, in its entirety, remains non-binding on all parties. See Item 1, Note 11, Income Taxes for additional information.
Previous report
For the nine months ended September 30, 2025, our net cash provided by operating activities from continuing operations was $7.9 million as compared with net cash used in operating activities from continuing operations of $11.1 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 nine months ended September 30, 2025. Further, we have seen increased revenue and billings growth year-over-year.
Previous report
For the nine months ended September 30, 2025, our net cash provided by investing activities from continuing operations was $4.0 million as compared with net cash used in investing activities from continuing operations of $3.1 million in the prior period. The increase in investing cash flow for the current period is primarily attributed to the proceeds earned on the sale of Giftcloud, partially offset by the proceeds on the sale of intangibles in the prior period as well as a decrease in purchases of property and equipment and capitalized software.
Previous report
For the nine months ended September 30, 2025, our net cash used in financing activities from continuing operations was $6.4 million as compared with net cash provided by financing activities from continuing operations of $32.9 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 during the nine months ended September 30, 2024, partially offset by an increase of $42.8 million in payments of borrowings under our revolving credit facility also during the nine months ended September 30, 2024, and, to a lesser extent, an increase in taxes paid for net share settlements of stock-based compensation awards of$5.7 million during thenine months ended September 30, 2025 compared with$1.5 million in the prior year period.
Previous report
Matters related to the Rights Offering and Credit Agreement
Previous report
On January 22, 2024, we announced the closing of our $80.0 million fully backstopped Rights Offering for shares of our Common Stock. Pursuant to the terms of the Rights Offering, 7,079,646 shares of Common Stock were purchased at $11.30 per share, generating $80.0 million in gross proceeds to the Company.
Previous report
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.
Reworded paragraphs (40)
Previous wording
Our strategy is to be the trusted marketplace where customers go to buy local services and experiences. We plan to grow our revenue by building long-term relationships with local merchants to strengthen our online selection and by enhancing the customer reach through experience curation and improved convenience in order to drive customer demand and purchase frequency.
Current wording
Our mission is to get people offline through quality local experiences at great value. We believe the best things in life happen offline, and as the world becomes increasingly digitized, we expect demand to grow for in-person experiences and for the digital pathways consumers use to discover and book them. Groupon sits at the intersection of consumer intent and local supply, which we believe positions us to serve as a bridge between the emerging AI economy and the millions of local merchants who power Main Street. Our strategy is to be the trusted local experience marketplace where customers go to buy quality local services and experiences at unbeatable value. We plan to grow our revenue by building long-term relationships with local merchants to strengthen our online selection and by enhancing the customer reach through experience curation and improved convenience in order to drive customer demand and purchase frequency.
Previous wording
We are investing significant resources in making our platform more efficient, stable and agile. By improving our technology, our customer base can enjoy a modernized experience along with seamless execution of new product innovation, improved customer experience and customer satisfaction. Our platform migrations are strategic investments in our ability to innovate faster, serve merchants better, and create more engaging experiences for our customers.
Current wording
We continue to invest in making our platform more efficient, stable and agile. By improving our technology, our customer base can enjoy a modernized experience along with seamless execution of new product innovation, improved customer experience and customer satisfaction. Central to this is our continued investment in our product and engineering organization, building the development velocity, platform depth, and technical capabilities required to deliver faster innovation and more personalized experiences for both customers and merchants. Our product agenda is focused on driving growth through smarter discovery, deeper personalization, and an increasingly seamless experience across every surface we serve.
Previous wording
We believe the next generation of local commerce will be driven by AI native experiences, for which AI agents will become an important discovery and transaction channel. We are building and beginning to implement modern API architecture, AI-ready search & relevance, AI-ready checkout in addition to internal AI tools to drive productivity and efficiency. We are investing now with the goal of Groupon being well positioned to be the partner of choice for local experiences as this channel scales, although we can provide no assurances that our efforts will be successful given the rapidly changing and complex AI environment.
Current wording
We believe the next generation of local commerce will be driven by AI-native experiences, for which AI agents will become an important discovery and transaction channel. We are investing in AI-native capabilities on both sides of our marketplace, including personalization, AI ready search and relevance, AI ready checkout for consumers, and AI driven tools intended to improve deal creation, content quality, and merchant productivity. We are making these investments now with the goal of Groupon being well positioned for local experiences demand as this channel scales.
Previous wording
•Active customers are unique user accounts that have made a purchase during the TTM either through one of our online marketplaces or directly with a merchant for which we earned a commission. We consider this metric to be an important indicator of our business performance as it helps us to understand how the number of customers actively purchasing our offerings is trending. Some customers could establish and make purchases from more than one account, so it is possible that our active customer metric may count certain customers more than once in a given period. We do not include consumers who solely make purchases with retailers using digital coupons accessed through our websites or mobile applications in our active customer metric, nor do we include consumers who solely make purchases of our inventory through third-party marketplaces with which we partner.
Current wording
•Active customers are unique user accounts, identified by a distinct email address, that have made a purchase during the TTM either through one of our online marketplaces or directly with a merchant for which we earned a commission. We consider this metric to be an important indicator of our business performance as it helps us to understand how the number of customers actively purchasing our offerings is trending. Some customers could establish and make purchases from more than one account, so it is possible that our active customer metric may count certain customers more than once in a given period. We do not include consumers who solely make purchases with retailers using digital coupons accessed through our websites or mobile applications in our active customer metric, nor do we include consumers who solely make purchases of our inventory through third-party marketplaces with which we partner.
Previous wording
Our gross billings and units for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands):
Current wording
Our gross billings and units for the three months ended March 31, 2026 and 2025 were as follows (in thousands):
Previous wording
The following table presents the above financial metrics for the three and nine months ended September 30, 2025 and 2024 (in thousands):
Current wording
The following table presents the above financial metrics for the three months ended March 31, 2026 and 2025 (in thousands):
Previous wording
•Restructuring and related charges represent severance and benefit costs for workforce reductions, impairments and other facilities-related costs and professional advisory fees. See Item 1, Note 10, Restructuring and Related Charges, for additional information about our restructuring plans.
Current wording
•Restructuring and related charges represent severance and benefit costs for workforce reductions, facilities-related costs and professional advisory fees.
Previous wording
Attracting and retaining local merchants. As we focus on our local experiences marketplace, we depend on our ability to attract and retain merchants who are willing to offer their experiences on our platform. Merchants can withdraw their offerings from our marketplace at any time, and their willingness to continue offering services through our marketplace depends on the effectiveness of our marketplace offering. We are focused on improving our marketplace offering and merchant value proposition by exploring opportunities to better balance the needs of merchant partners, customers and Groupon.
Current wording
Attracting and retaining local merchants and suppliers. As we focus on our local experiences marketplace, we depend on our ability to attract and retain merchants who are willing to offer their experiences on our platform. Merchants can withdraw their offerings from our marketplace at any time, and their willingness to continue offering services through our marketplace depends on the effectiveness of our marketplace offering. We are focused on improving our marketplace offering and merchant value proposition by exploring opportunities to better balance the needs of merchant partners, customers and Groupon.
Previous wording
Impact of macroeconomic conditions. We have been, and may continue to be, impacted by adverse consequences of the macroeconomic environment, including but not limited to, inflationary pressures, the government shutdown, higher labor costs, tariff policy, labor shortages, supply chain challenges and changes in consumer and merchant behavior. In addition, recent and potential future changes to trade and tariff policies may introduce increased pricing volatility and overall uncertainty into our operations. To minimize the impact of macroeconomic conditions on our business, and to create value for our merchants and customers, we are focusing on building long-term relationships with local merchants to enhance our inventory selection, improving the customer experience through inventory curation and expanding convenience in order to drive customer demand and purchase frequency.
Current wording
Impact of macroeconomic conditions. We have been, and may continue to be, impacted by adverse consequences of the macroeconomic environment, including but not limited to, inflationary pressures, higher labor costs, tariff and other trade policies, labor shortages, supply chain challenges and changes in consumer and merchant behavior. Judicial and executive developments relating to U.S. tariff and trade policies in Q1 2026 may further increase uncertainty regarding the scope, implementation and potential future direction of such measures, and further changes could occur. In addition, recent and potential future changes to trade and tariff policies may introduce increased pricing volatility and overall uncertainty into our operations. To minimize the impact of macroeconomic conditions on our business, and to create value for our merchants and customers, we are focusing on building long-term relationships with local merchants to enhance our inventory selection, improving the customer experience through inventory curation and expanding convenience in order to drive customer demand and purchase frequency.
Previous wording
North America segment gross billings and units for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands):
Current wording
North America segment gross billings and units for the three months ended March 31, 2026 and 2025 were as follows (in thousands):
Previous wording
North America segment revenue, cost of revenue and gross profit for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands):
Current wording
North America segment revenue, cost of revenue and gross profit for the three months ended March 31, 2026 and 2025 were as follows (in thousands):
Previous wording
North America revenue and gross profit increased by $9.1 million and $10.0 million, while cost of revenue decreased by $0.9 million for the three months ended September 30, 2025 compared with the prior year period. Our Local revenue increased 12%, lagging the rate of growth in gross billings, as a result of 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 and decrease in cost of revenue.
Current wording
North America revenue, gross profit and cost of revenue decreased by $1.2 million, $0.9 million and $0.3 million for the three months ended March 31, 2026 compared with the prior year period. Our Local revenue decreased 0.5%, lagging the rate of growth in gross billings, as a result of higher 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 decreased due to the decrease in revenue, partially offset by a decrease in cost of revenue.
Previous wording
North America marketing and contribution profit for the three and nine months ended September 30, 2025 and 2024 was as follows (in thousands):
Current wording
North America marketing and contribution profit for the three months ended March 31, 2026 and 2025 was as follows (in thousands):
Previous wording
North America marketing expense and marketing expense as a percentage of revenue increased for the three months ended September 30, 2025 compared with the prior year period, primarily driven by an increased investment in our performance marketing campaigns.
Current wording
North America marketing expense and marketing expense as a percentage of revenue increased for the three months ended March 31, 2026 compared with the prior year period, primarily driven byhigher investment in paid channels. Marketing expense as a percentage of revenue increased as revenue growth did not keep pace with our marketing investment due to the headwinds in our managed and organic channels, partially offset by favorable paid channel performance.
Previous wording
North America contribution profit increased for the three months ended September 30, 2025 compared with the prior year period, primarily due to optimization of our marketing investment.
Current wording
North America contribution profit decreased for the three months ended March 31, 2026 compared with the prior year period, primarily dueto lower gross profit and higher marketing investment.
Previous wording
International segment gross billings and units for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands):
Current wording
International segment gross billings and units for the three months ended March 31, 2026 and 2025 were as follows (in thousands):
Previous wording
International gross billings and TTM active customers decreased by $1.3 million and 0.2 million, while units increased by 0.1 million for the three months ended September 30, 2025 compared with the prior year period. The decline in the Local category was mainly due to the divestiture of Giftcloud. Excluding Giftcloud, International Local gross billings increased 15%, driven by our transformation efforts. The decline in our Goods category is primarily attributable to an overall decline in site traffic. In addition, there was a $4.7 million favorable impact on gross billings from year-over-year changes in foreign currency exchange rates, partially offsetting the decline in activity.
Current wording
International gross billings and units decreased by $3.4 million and 0.02 million, while TTM active customers increased by 0.2 million for the three months ended March 31, 2026 compared with the prior year period. The decline in reported gross billings was primarily due to the divestiture of Giftcloud. Excluding Giftcloud, International Local gross billings grew 14.3% year-over-year, reflecting growth in both transaction volume and transaction value. From a supply perspective, growth within International Local, excluding Giftcloud was driven by an expansion of seasonally relevant supply across our major markets, led by our Things to Do offering. From a demand perspective, the deployment of our new consumer platform across International markets contributed to improved organic traffic during the quarter. In addition, there was an$8.9 million favorable impact on gross billings from year-over-year changes in foreign currency exchange rates.
Previous wording
International segment revenue, cost of revenue and gross profit for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands):
Current wording
International segment revenue, cost of revenue and gross profit for the three months ended March 31, 2026 and 2025 were as follows (in thousands):
Previous wording
International marketing and contribution profit for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands):
Current wording
International marketing and contribution profit for the three months ended March 31, 2026 and 2025 were as follows (in thousands):
Previous wording
Operating expenses for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands):
Current wording
Operating expenses for the three months ended March 31, 2026 and 2025 were as follows (in thousands):
Previous wording
(1)The three and nine months ended September 30, 2025 includes$10.9 million and$27.3 million of stock-based compensation expense and$2.4 million and$8.2 million of depreciation and amortization expense. The three and nine months ended September 30, 2024 includes $8.8 million and $17.5 million of stock-based compensation expense and$3.8 million and$13.1 million of depreciation and amortization expense.
Current wording
(1)The three months ended March 31, 2026 includes$11.7 million of stock-based compensation expense and$2.3 million of depreciation and amortization expense. The three months ended March 31, 2025 includes $7.7 million of stock-based compensation expense and$3.4 million of depreciation and amortization expense.
Previous wording
SG&A and SG&A as a percentage of gross profit decreased for the three months ended September 30, 2025 compared with the prior year period, due to lower technology expenses from the usage of non-recurring indirect tax credits, partially offset by higher payroll costs.
Current wording
SG&A and SG&A as a percentage of revenue increased for the three months ended March 31, 2026 compared with the prior year period, due to higher stock-based compensation expense for new awards and payroll related costs, partially offset by lower amortization of internally developed software relating to non-customer facing applications.
Previous wording
Other income (expense), net includes interest expense, interest income, loss on extinguishment of debt and foreign currency gains and losses, primarily resulting from intercompany balances with our subsidiaries that are denominated in foreign currencies.
Current wording
Other income (expense), net includes interest expense, interest income, and foreign currency gains and losses, primarily resulting from intercompany balances with our subsidiaries that are denominated in foreign currencies.
Previous wording
Other income (expense), net for the three and nine months ended September 30, 2025 and 2024 was as follows (in thousands):
Current wording
Other income (expense), net for the three months ended March 31, 2026 and 2025 was as follows (in thousands):
Previous wording
The change in Other income (expense), net for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 is primarily related to aloss on extinguishment of debt of $99.9 million. The loss on extinguishment of debt consists of the difference between the fair value of the 2030 Notes at issuance and the net carrying amount of the 2026 Notes and the 2027 Notes exchanged. Further, there was a $20.0 million decrease in net foreign currency gains (losses) which primarily resulted from U.S. dollar-denominated intercompany balances with our foreign subsidiaries. The decrease is primarily driven by the Euro appreciation against the U.S. dollar during the three months ended September 30, 2025 compared to thethree months ended September 30, 2024.
Current wording
The change in Other income (expense), net for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 is primarily related to a $13.0 million decrease in net foreign currency gains (losses) which primarily resulted from U.S. dollar-denominated intercompany balances with our foreign subsidiaries. The decrease is primarily driven by net foreign currency losses in the current year period from the weakening of the U.S dollar relative to the Euro compared to net foreign currency gains in the prior year period.
Previous wording
Provision (benefit) for income taxes for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands):
Current wording
Provision (benefit) for income taxes for the three months ended March 31, 2026 and 2025 were as follows (in thousands):
Previous wording
The effective tax rates for the three and nine months ended September 30, 2025 and 2024 were impacted by the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets, including U.S. pre-tax losses in the third quarter of 2025 due to the loss on extinguishment of debt. For the three and nine months ended September 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.
Current wording
The effective tax rates for the three months ended March 31, 2026 and 2025 were impacted by pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets and by benefits due to tax refunds received. The effective tax rate for the three months ended March 31, 2026 was further impacted by additional tax expense resulting from the signing of an advance pricing agreement with international tax authorities during the quarter and an increase in the Company's liability related to unremitted foreign earnings. For the three months ended March 31, 2026 and 2025, 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
In addition to financial results reported in accordance with GAAP, we have provided the following non-GAAP financial measures: Adjusted EBITDA, free cash flow and foreign currency exchange rate neutral operating results. Those non-GAAP financial measures, which are presented on a continuing operations basis, are intended to aid investors in better understanding our current financial performance and prospects for the future as seen through the eyes of management. We believe that those non-GAAP financial measures facilitate comparisons with our historical results and with the results of peer companies who present similar measures (although other companies may define non-GAAP measures differently than we define them, even when similar terms are used to identify such measures). However, those non-GAAP financial measures are not intended to be a substitute for those reported in accordance with GAAP.
Current wording
In addition to financial results reported in accordance with GAAP, we have provided the following non-GAAP financial measures: Adjusted EBITDA, free cash flow and foreign currency exchange rate neutral operating results. These non-GAAP financial measures, which are presented on a continuing operations basis, are intended to aid investors in better understanding our current financial performance and prospects for the future as seen through the eyes of management. We believe that these non-GAAP financial measures facilitate comparisons with our historical results and with the results of peer companies who present similar measures (although other companies may define non-GAAP measures differently than we define them, even when similar terms are used to identify such measures). However, these non-GAAP financial measures are not intended to be a substitute for those reported in accordance with GAAP.
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 and nine months ended September 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.
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 months ended March 31, 2026 and 2025, special charges and credits included charges related 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.
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 and nine months ended September 30, 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 months ended March 31, 2026 and 2025 (in thousands):
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 and nine months ended September 30, 2025 (in thousands):
Current wording
The following table represents 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, 2026 (in thousands):
Previous wording
Our principal source of liquidity is our cash balance totaling $238.5 million as of September 30, 2025. The Company’s cash requirements are subject to change as business conditions warrant and opportunities arise. Additionally, with the closing of our Rights Offering in January 2024, termination of our Credit Agreement in February 2024, execution of the Exchange and Subscription Agreements in November 2024 and 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, including the repayment of the remaining outstanding $33.7 million principal of the 2026 Notes upon maturity in March 2026.
Current wording
Our principal source of liquidity is our cash balance totaling $225.5 million as of March 31, 2026. The Company’s cash requirements are subject to change as business conditions warrant and opportunities arise. We believe that the Company has sufficient liquidity to support its overall ongoing operational needs within the next 12 months, including the repayment of the 2027 Notes upon maturity on March 15, 2027.
Previous wording
Our net cash flows from operating, investing and financing activities from continuing operations for the three and nine months ended September 30, 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 months ended March 31, 2026 and 2025 were as follows (in thousands):
Previous wording
Our free cash flow for the three and nine months ended September 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):
Current wording
Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by operating activities, less purchases of property and equipment and capitalized software. Our free cash flow for the three months ended March 31, 2026 and 2025 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
See Item 1, Note 6, Financing Arrangements, for additional information regarding the Credit Agreement and Item 1, Note 8, Stockholders' Equity (Deficit) and Compensation Arrangements, for additional information regarding the Rights Offering.
Current wording
For the three months ended March 31, 2026, our net cash used in financing activities from continuing operations was $55.7 million as compared with net cash used in financing activities from continuing operations of $0.5 million in the prior period. The year-over-year change from financing activities is primarily due to a $33.7 million payment to pay off the remaining aggregate principal amount of the 2026 Notes upon their scheduled maturity and $21.3 million related to repurchases of Common Stock under our share repurchase program. See Item 1, Note 5, Financing Arrangementsfor additional information regarding the payment of our 2026 Notes and Item 1, Note 7, Stockholders' Equity (Deficit) and Compensation Arrangementsfor additional information regarding our common stock repurchases.
Previous wording
On February 12, 2024, we prepaid the Payoff Amount to terminate all commitments to extend further credit under the Credit Agreement using a portion of our $80.0 million in proceeds received from the Rights Offering. The terms of the Rights Offering permit the Company to use the proceeds for general corporate purposes, including the repayment of debt. We were not subject to any early termination penalties under the Credit Agreement. The payment of the Payoff Amount terminated our obligations under the Credit Agreement, except for ordinary and customary survival terms. In addition, we retained access to letters of credit, originally available under the Credit Agreement.
Current wording
In February 2024, we prepaid the Payoff Amount to terminate all commitments to extend further credit under the Credit Agreement. The payment of the Payoff Amount terminated our obligations under the Credit Agreement, except for ordinary and customary survival terms. We were not subject to any early termination penalties under the Credit Agreement. Following the termination, we retained access to letters of credit, originally available under the Credit Agreement, pursuant to our Cash Collateral Agreement.
Previous wording
In 2021, we issued the 2026 Notes in the principal amount of $230.0 million.
Current wording
In 2021, we issued the 2026 Notes in the principal amount of $230.0 million. The Company repaid the remaining $33.7 million principal and all accrued interest on its 2026 Notes upon maturity on March 15, 2026. The 2026 Notes bore interest at a rate of 1.125% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, with an annual effective interest rate of 1.83%. The total payment included the outstanding principal balance and all accrued and unpaid interest up to the maturity date.
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.
Current wording
In November 2024, we issued $197.3 million aggregate principal amount of 2027 Notes. 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
On July 2, 2025, the Company issued$244.1 million aggregate principal amount of the 2030 Notes. consisting of (i)$20.0 million aggregate principal amount of 2030 Notes issued in exchange for$20.0 million aggregate principal amount of the Company’s outstanding 2026 Notes and (ii)$224.1 million aggregate principal amount of 2030 Notes issued in exchange for$150.0 million aggregate principal amount of the Company’s outstanding 2027 Notes with 2030 Notes Offering Participants.
Current wording
In July 2025, the Company issued $244.1 million aggregate principal amount of the 2030 Notes, consisting of (i) $20.0 million aggregate principal amount of 2030 Notes issued in exchange for $20.0 million aggregate principal amount of the Company’s outstanding 2026 Notes and (ii) $224.1 million aggregate principal amount of 2030 Notes issued in exchange for $150.0 million aggregate principal amount of the Company’s outstanding 2027 Notes with 2030 Notes Offering Participants.
Previous wording
As of September 30, 2025, we had $67.0 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 U.S. to satisfy domestic liquidity needs arising in the ordinary course of business.
Current wording
As of March 31, 2026, we had $58.8 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 U.S. to satisfy domestic liquidity needs arising in the ordinary course of business.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
North America revenue and gross profit increased by $7.7 million and $11.3 million, while cost of revenue decreased by $3.5 million for the nine months ended September 30, 2025 compared with the prior year period. Our Local revenue increased by 5%, lagging the rate of growth in gross billings as a result of 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 and decrease in cost of revenue.
Previous report — wording carried elsewhere
Matters related to the 2026 Notes, 2027 Notes and 2030 Notes
Previous report — wording carried elsewhere
The 2026 Notes bear interest at a rate of 1.125% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, with an annual effective interest rate of 1.83%.