Groupon, Inc.
For the period ended Jun 30, 2026. Filed Aug 6, 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.
Jun 30, 2026 · Filed Aug 6, 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 2026-03-31; filed 2026-05-07.
0001628280-26-032124
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001628280-26-054304
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 109 previous paragraphs and 125 current paragraphs.
63 unchanged; 42 reworded; 16 added; 4 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 18 previous and 19 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 (16)
Current report
growth. These initiatives, including significant restructuring actions, were approved by the Board of Directors in the second quarter of 2026. As the Company implements Project Foundry, management expects to continue to evaluate additional material cost-reduction and automation actions. The Company expects any such actions to be completed by the end of 2027.
Current report
2026 Restructuring Plan
Current report
In May 2026, the Board approved a restructuring plan ("2026 Restructuring Plan") relating to the Company's previously announced strategy to rebuild the Company as an AI-native company and better deliver on our mission, serving both customers and merchants. These restructuring actions include an overall reduction of up to 400 positions globally, including employees and contractors, with a majority of these reductions expected to occur by the end of the third quarter of 2026. In connection with these actions, we expect to record total pre-tax charges of $7.0 million to $13.0 million. Substantially all of the pre-tax charges are expected to be paid in cash and relate to employee severance and compensation benefits, with an immaterial amount of charges related to other exit costs.
Current report
The payroll actions are estimated to result in $20.0 million to $25.0 million in annualized cost savings. The Company expects to realize $10.0 million to $12.0 million of gross savings in 2026 and intends to reinvest up to 50% of these savings in 2026 in marketing, AI infrastructure, and talent density. Accordingly, the Company expects the restructuring plan will generate approximately $5.0 million in net savings in fiscal year 2026. See Note 10, Restructuring and Related Charges (Credits), for more information.
Current report
North America gross billings and units decreased by $1.2 million and 0.5 million, while TTM active customers increased by 0.1 million for the three months ended June 30, 2026 compared with the prior year period. Within our Local category, gross billings decreased 0.6% year-over-year and unit volume declined, reflecting a decline in transaction volume that exceeded the effects of the growth in transaction value. From a supply perspective, softness in Health, Beauty & Wellness was partially offset by continued strength in our Things to Do offerings. Our Enterprise channel declined modestly year-over-year, with the pace of decline improving from the first quarter, while our Small Business merchant base was also slightly lower. From a demand perspective, managed channels declined, but improved following the transition to our new customer data platform, with the decline moderating from the first quarter and a return to growth in June. The decline was partially offset by growth in our organic and direct channels, while paid channels grew modestly. Gross billings in our Goods category declined, reflecting our continued de-emphasis of the category, which resulted in fewer unit sales year-over-year. In addition, growth in our Travel category was driven by our Tours offerings.
Current report
North America revenue and gross profit decreased by $3.0 million and $3.6 million, while cost of revenue increased by $0.6 million for the six months ended June 30, 2026 compared with the prior year period. Our Local revenue decreased by 1.1%, consistent with the drivers of gross billings discussed above. The increase in cost of revenue is primarily due to higher credit card processing fees, as well as increased connectivity partner fees. Gross profit decreased due to the decrease in revenue and increase in cost of revenue.
Current report
North America marketing expense and marketing expense as a percentage of revenue increased for the three months ended June 30, 2026 compared with the prior year period, primarily driven by higher brand marketing spend and marketing technology costs, partially offset by a decline in paid marketing spend. Marketing expense as a percentage of revenue increased as marketing investment increased while revenue declined.
Current report
North America marketing expense and marketing expense as a percentage of revenue increased for the six months ended June 30, 2026 compared with the prior year period, primarily driven by higher brand marketing spend and marketing technology costs, partially offset by a decline in paid marketing spend. Marketing expense as a percentage of revenue increased as marketing investment increased while revenue declined.
Current report
International revenue and gross profit increased by $0.8 million and $1.6 million while cost of revenue decreased by $0.9 million for the three months ended June 30, 2026 compared with the prior year period. Excluding Giftcloud, International Local revenue increased 8.5%, consistent with the drivers of gross billings discussed above. The decrease in cost of revenue was primarily due to lower amortization of internally-developed software relating to customer-facing applications that resulted from a transfer of assets between our reportable segments. The transfer did not have an impact on our consolidated results of operations, other than an immaterial effect on our income tax provision. Revenue and gross profit also had favorable impacts of $0.6 million and $0.5 million from year-over-year changes in foreign currency exchange rates.
Current report
SG&A and SG&A as a percentage of revenue decreased for the three months ended June 30, 2026 compared with the prior year period, due to lower payroll related costs resulting from reduced headcount, including reductions from our 2026 Restructuring Plan, partially offset by employer paid payroll tax expense from the exercising of vested options.
Current report
See Item 1, Note 10, Restructuring and Related Charges (Credits), for additional information regarding the 2026 Restructuring Plan and Item 1, Note 8, Stockholders' Equity (Deficit) and Compensation Arrangements, for additional information relating to the exercised vested options.
Current report
The change in Other income (expense), net for the six months ended June 30, 2026 as compared with the prior year period is primarily related to a $35.5 million decrease in net foreign currency gains (losses) which primarily resulted from U.S. dollar-denominated intercompany balances with our foreign subsidiaries. The loss during the six months ended June 30, 2026 was primarily driven by the depreciation of the Euro against the U.S. dollar, as compared to the gain in the prior year period driven by the Euro appreciation against the U.S. dollar. In each of these periods, these intercompany balances represented U.S. dollar-denominated payables owed by our foreign subsidiaries, whose functional currency is not the U.S. dollar, to Groupon, Inc.
Current report
Comparison of the Three and Six Months Ended June 30, 2026 and 2025:
Current report
(1)The three and six months ended June 30, 2025 includes $10.7 million of pre-tax gains related to the sale of Giftcloud, a non-core, UK-based business. See Item 1, Note 2, Business Dispositions, for additional information.
Current report
(2)Other (income) expense, net, includes interest income, interest expense, and foreign currency (gains)/losses. See Item 1, Note 5, Supplemental Condensed Consolidated Balance Sheets and Statements of Operations Information, for additional information.
Current report
For the six months ended June 30, 2026, our net cash provided by operating activities from continuing operations was $8.2 million as compared with net cash provided by operating activities from continuing operations of $28.4 million in the prior period. The decrease in cash provided by operating activities is primarily attributed to a $33.3 million decrease in accrued merchant and supplier payables during the six months ended June 30, 2026, compared with a $1.1 million increase in the prior year period. The year-over-year change was driven by strategic supplier payments made in late 2024, which resulted in comparatively lower accrued merchant and supplier payable balances entering the first quarter of 2025, as compared with higher accumulated balances entering the current year. The current year decrease reflects the paydown of those higher balances in the ordinary course of regular payment cycles. The decrease in cash provided by operating activities also includes a $3.3 million increase in cash paid for interest on the 2030 Notes during the six months ended June 30, 2026, with no interest payable or due on the 2030 Notes in the prior year period. See Note 6, Financing Arrangements, for more information. This decrease was partially offset by a $6.7 million reduction in cash paid for income taxes, primarily attributable to provisional payments related to the Italy tax matters made during the prior year period, with no such payments made in the current year period.
Removed paragraphs (4)
Previous 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.
Previous report
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 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.
Previous report
For information on our commitments for financing arrangements, see Item 1, Note 5, Financing Arrangements.
Reworded paragraphs (42)
Previous 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.
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 millions of local merchants. 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
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 wording
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 determinable, and we expect Foundry to influence how we operate over the remainder of 2026 and in future periods.
Previous wording
Our gross billings and units for the three months ended March 31, 2026 and 2025 were as follows (in thousands):
Current wording
Our gross billings and units for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):
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 the Non-GAAP Financial Measures section.
Current wording
•Adjusted EBITDA is a non-GAAP financial measure that we define as 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 Income (loss) from continuing operations, refer to our discussion under the Non-GAAP Financial Measures section.
Previous wording
The following table presents the above financial metrics for the three months ended March 31, 2026 and 2025 (in thousands):
Current wording
The following table presents the above financial metrics for the three and six months ended June 30, 2026 and 2025 (in thousands):
Previous wording
•Marketing expense consists primarily of online marketing costs, such as search engine marketing, advertising on social networking sites and affiliate programs, and offline marketing costs, such as television. Additionally, compensation expense for marketing employees is classified within Marketing expense. We record these costs within Marketing on the Condensed Consolidated Statements of Operations when incurred. From time to time, we have offerings from well-known national merchants for customer acquisition and activation purposes, for which the amount we owe the merchant for each voucher sold exceeds the transaction price paid by the customer. Our gross billings from those transactions generate no revenue and our net cost (i.e., the excess of the amount owed to the merchant over the amount paid by the customer) is classified as marketing expense. We evaluate marketing expense as a percentage of gross profit because it gives us an indication of how well our marketing spend is driving gross profit performance.
Current wording
•Marketing expense consists primarily of online marketing costs, such as search engine marketing, advertising on social networking sites and affiliate programs, and offline marketing costs, such as television. Additionally, compensation expense for marketing employees is classified within Marketing expense. We record these costs within Marketing in the Condensed Consolidated Statements of Operations when incurred. From time to time, we have offerings from well-known national merchants for customer acquisition and activation purposes, for which the amount we owe the merchant for each voucher sold exceeds the transaction price paid by the customer. Our gross billings from those transactions generate no revenue and our net cost (i.e., the excess of the amount owed to the merchant over the amount paid by the customer) is classified as marketing expense. We evaluate marketing expense as a percentage of revenue because it gives us an indication of how well our marketing spend is driving revenue performance.
Previous wording
•SG&Aexpenses include selling expenses such as sales commissions and other compensation expenses for sales representatives, as well as costs associated with supporting the sales function such as technology, telecommunications and travel. General and administrative expenses include compensation expense for employees involved in customer service, operations, technology and product development, as well as general corporate functions, such as finance, legal and human resources. Additional costs in general and administrative include depreciation and amortization, rent, professional fees, litigation costs, travel and entertainment, recruiting, maintenance, certain technology costs and other general corporate costs. We evaluate SG&A expense as a percentage of gross profit because it gives us an indication of our operating efficiency.
Current wording
•SG&Aexpenses include selling expenses such as sales commissions and other compensation expenses for sales representatives, as well as costs associated with supporting the sales function such as technology, telecommunications and travel. General and administrative expenses include compensation expense for employees involved in customer service, operations, technology and product development, as well as general corporate functions, such as finance, legal and human resources. Additional costs in general and administrative include depreciation and amortization, rent, professional fees, litigation costs, travel and entertainment, recruiting, maintenance, certain technology costs and other general corporate costs. We evaluate SG&A expense as a percentage of revenue because it gives us an indication of our operating efficiency.
Previous wording
•Restructuring and related charges represent severance and benefit costs for workforce reductions, facilities-related costs and professional advisory fees.
Current wording
•Restructuring and related charges represent severance and benefit costs for workforce reductions, facilities-related costs and professional advisory fees. See Item 1, Note 10, Restructuring and Related Charges (Credits), for additional information about our restructuring plans.
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, 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.
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 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 months ended March 31, 2026 and 2025 were as follows (in thousands):
Current wording
North America segment gross billings and units for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):
Previous wording
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 wording
North America gross billings and units decreased by $1.7 million and 0.8 million for the six months ended June 30, 2026 compared with the prior year period. Within our Local category, gross billings increased 0.6% year-over-year and unit volume declined, reflecting growth in transaction value that exceeded the effects of the decline in transaction volume. From a supply perspective, continued strength in our Things to Do offerings was partially offset by softness in Health, Beauty & Wellness and pressure from our Enterprise channel. From a demand perspective, growth in our paid and direct channels was partially offset by a decline in our managed channels, although the decline moderated in the second quarter. Organic was relatively flat, as declines in the first quarter were offset by a return to growth in the second quarter. Gross billings in our Goods category declined, reflecting our continued de-emphasis of the category, which resulted in fewer unit sales year-over-year. In addition, growth in our Travel category was driven by our Tours offerings.
Previous 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):
Current wording
North America segment revenue, cost of revenue and gross profit for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):
Previous 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.
Current wording
North America revenue and gross profit decreased by $1.8 million and $2.7 million while cost of revenue increased by $0.9 million for the three months ended June 30, 2026 compared with the prior year period. Our Local revenue decreased 1.7%, consistent with the drivers of gross billings discussed above. The increase in cost of revenue is primarily due to higher credit card processing fees and an increase in amortization of internally-developed software relating to customer-facing applications that resulted from a transfer of assets between our reportable segments. The transfer did not have an impact on our consolidated results of operations, other than an immaterial effect on our income tax provision. Gross profit decreased due to the decrease in revenue and increase in cost of revenue.
Previous wording
North America marketing and contribution profit for the three months ended March 31, 2026 and 2025 was as follows (in thousands):
Current wording
North America marketing and contribution profit for the three and six months ended June 30, 2026 and 2025 was as follows (in thousands):
Previous 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.
Current wording
North America contribution profit decreased for the three months ended June 30, 2026 compared with the prior year period, primarily due to lower gross profit and higher marketing investment.
Previous wording
International segment gross billings and units for the three months ended March 31, 2026 and 2025 were as follows (in thousands):
Current wording
International segment gross billings and units for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):
Previous 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.
Current wording
International gross billings decreased by $5.2 million while units decreased by 0.2 million for the six months ended June 30, 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 increased 9.4% 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 concentrated in major International cities, led by our Health, Beauty & Wellness and Things to Do offerings. From a demand perspective, the continued deployment of our new consumer platform across International markets contributed to improved organic performance during the quarter. Gross billings in our Goods category declined, reflecting our continued de-emphasis of the category, which resulted in fewer unit sales year-over-year. In addition, there was an $11.1 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 months ended March 31, 2026 and 2025 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, 2026 and 2025 were as follows (in thousands):
Previous wording
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 wording
International revenue and gross profit increased by $2.0 million and $2.3 million, while cost of revenue decreased by $0.4 million compared with the prior year period. Excluding Giftcloud, International Local revenue increased 13.6%, consistent with the drivers of gross billings discussed above. The decrease in cost of revenue was primarily due to lower amortization of internally-developed software relating to customer-facing applications that resulted from a transfer of assets between our reportable segments, partially offset by Giftcloud charges in the current year that were intercompany transactions pre-divestiture in the prior year. The transfer did not have an impact on our consolidated results of operations, other than an immaterial effect on our income tax provision. Revenue and gross profit also had favorable impacts of $3.1 million and $2.7 million from year-over-year changes in foreign currency exchange rates.
Previous wording
International marketing and contribution profit for the three months ended March 31, 2026 and 2025 were as follows (in thousands):
Current wording
International marketing and contribution profit for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):
Previous wording
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 wording
International contribution profit increased for the three months ended June 30, 2026 compared with the prior year period, primarily due to an increase in gross profit, partially offset by higher marketing investment.
Previous wording
Operating expenses for the three months ended March 31, 2026 and 2025 were as follows (in thousands):
Current wording
Operating expenses for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):
Previous 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.
Current wording
(1)The three and six months ended June 30, 2026 includes $8.2 million and $19.9 million of stock-based compensation expense and $2.3 million and $4.6 million of depreciation and amortization expense. The three and six months ended June 30, 2025 includes $8.7 million and $16.4 million of stock-based compensation expense and $2.4 million and $5.8 million of depreciation and amortization expense.
Previous 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.
Current wording
SG&A and SG&A as a percentage of revenue remained relatively flat for the six months ended June 30, 2026 compared with the prior year period, due to higher stock-based compensation expense for new awards and employer paid payroll tax expense from the exercising of vested options, offset by lower payroll related costs resulting from reduced headcount, including from our 2026 Restructuring Plan.
Previous wording
Other income (expense), net for the three months ended March 31, 2026 and 2025 was as follows (in thousands):
Current wording
Other income (expense), net for the three and six months ended June 30, 2026 and 2025 was as follows (in thousands):
Previous 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.
Current wording
The change in Other income (expense), net for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 is primarily related to a $22.5 million decrease in net foreign currency gains (losses) which primarily resulted from U.S. dollar-denominated intercompany balances with our foreign subsidiaries. The loss during the three months ended June 30, 2026 was primarily driven by the depreciation of the Euro against the U.S. dollar, as compared to the gain in the prior year period driven by the Euro appreciation against the U.S. dollar. In each of these periods, these intercompany balances represented U.S. dollar-denominated payables owed by our foreign subsidiaries, whose functional currency is not the U.S. dollar, to Groupon, Inc.
Previous wording
Provision (benefit) for income taxes for the three months ended March 31, 2026 and 2025 were as follows (in thousands):
Current wording
Provision (benefit) for income taxes for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):
Previous 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.
Current wording
The effective tax rates for the three and six months ended June 30, 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 return-to-provision adjustments. The effective tax rate for the three and six months ended June 30, 2026 was further impacted by additional tax expense resulting from the signing of an advance pricing agreement with international tax authorities during the first quarter, and an increase in the Company's liability related to unremitted foreign earnings, partially offset by benefits due to tax refunds received. For the three and six months ended June 30, 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
Adjusted EBITDA. Adjusted EBITDA is a non-GAAP performance 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. Our definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key measure used by our management and Board to evaluate operating performance, generate future operating plans and make strategic decisions. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board. However, Adjusted EBITDA is not intended to be a substitute for Net income (loss) from continuing operations.
Current wording
Adjusted EBITDA. Adjusted EBITDA is a non-GAAP performance measure that we define as 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. Our definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key measure used by our management and Board to evaluate operating performance, generate future operating plans and make strategic decisions. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board. However, Adjusted EBITDA is not intended to be a substitute for Income (loss) from continuing operations.
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, 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.
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, 2026 and 2025, special charges and credits included charges related to our 2026 Restructuring Plan, Italy Restructuring Plan, 2022 Restructuring Plan, 2020 Restructuring Plan, and the (gain) on sale of business. 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, 2026 and 2025 (in thousands):
Current wording
The following is a reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure, Income (loss) from continuing operations, for the three and six months ended June 30, 2026 and 2025 (in thousands):
Previous wording
Free cash flow. 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. We use free cash flow to conduct and evaluate our business because, although it is similar to Net cash provided by (used in) from continuing 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 our cash balance for the applicable period.
Current wording
Free cash flow. 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. We use free cash flow to conduct and evaluate our business because, although it is similar to Net cash provided by (used in) operating activities from continuing 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 our cash balance for the applicable period.
Previous 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):
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 and six months ended June 30, 2026 (in thousands):
Previous 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.
Current wording
Our principal source of liquidity is our cash balance totaling $226.3 million as of June 30, 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 months ended March 31, 2026 and 2025 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, 2026 and 2025 were as follows (in thousands):
Previous 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):
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 and six months ended June 30, 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
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 wording
For the six months ended June 30, 2026, our net cash used in investing activities from continuing operations was $6.7 million as compared with net cash provided by investing activities from continuing operations of $7.0 million in the prior period. The net cash used in investing activities for the six months ended June 30, 2026 relates to purchases of property and equipment and capitalized software. The net cash provided by investing activities in the prior period primarily relates to the proceeds earned on the sale of Giftcloud, partially offset by purchases of property and equipment and capitalized software.
Previous 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.
Current wording
For the six months ended June 30, 2026, our net cash used in financing activities from continuing operations was $69.5 million as compared with net cash used in financing activities from continuing operations of $3.1 million in the prior period. The year-over-year change from financing activities is primarily due to a $33.7 million payment to repay the remaining aggregate principal amount of the 2026 Notes upon their scheduled maturity and $31.4 million related to repurchases of Common Stock under our share repurchase program. See Item 1, Note 6, Financing Arrangements, for additional information regarding the payment of our 2026 Notes and Item 1, Note 8, Stockholders' Equity (Deficit) and Compensation Arrangements, for additional information regarding our Common Stock repurchases.
Previous 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.
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. 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. 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.
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 aggregate 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%.
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Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
North America contribution profit decreased for the six months ended June 30, 2026 compared with the prior year period, primarily due to lower gross profit and higher marketing investment.
Current report — wording carried from elsewhere
International gross billings and units decreased by $1.7 million and 0.2 million, while TTM active customers increased by 0.2 million for the three months ended June 30, 2026 compared with the prior year period. Excluding Giftcloud, International Local gross billings grew 4.7% year-over-year, reflecting growth in transaction value partially offset by a decline in transaction volume. From a supply perspective, growth within International Local, excluding Giftcloud, was driven by an expansion of seasonally relevant supply concentrated in major international cities, led by our Health, Beauty & Wellness and Things to Do offerings. From a demand perspective, the continued deployment of our new consumer platform across International markets contributed to improved organic performance during the quarter. Gross billings in our Goods category declined, reflecting our continued de-emphasis of the category, which resulted in fewer unit sales year-over-year. In addition, there was a $2.3 million favorable impact on gross billings from year-over-year changes in foreign currency exchange rates.
Current report — wording carried from elsewhere
International marketing expense and marketing expense as a percentage of revenue increased for the six months ended June 30, 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 — wording carried from elsewhere
International contribution profit decreased for the six months ended June 30, 2026 compared with the prior year period, primarily due to higher marketing investment, partially offset by an increase in gross profit.