Groupon, Inc.

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Our strategy to return the Company to stabilized growth, including rebuilding Groupon as an AI-native company, may be unsuccessful, may not produce the expected benefits, and may itself create new operational, financial, and reputational risks.

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We continue to implement a strategy to become the trusted marketplace where customers go to buy local services and experiences. We are executing this by building long-term relationships with local merchants to improve our inventory selection and by improving the customer experience through inventory curation and improved convenience in order to drive customer demand and purchase frequency. We are also working to rebuild Groupon as an AI-native company by embedding AI agents into the core of every function. However, there are no assurances that these actions will be successful in returning the Company to stabilized growth. Our efforts may prove more difficult and costly than we currently anticipate and the associated costs may exceed our current cost structure.

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The macroeconomic environment, including inflationary pressures, higher labor costs, tariff or other trade policies, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior, may limit our merchants' ability to offer deals or service customers, and reduce consumer discretionary spending. These factors may make it more difficult to effectively execute our strategy, including to quickly test, learn and scale initiatives relating to improving inventory selection or improving customer experience. If we are unable to effectively execute our strategy and realize its anticipated benefits, our business, financial condition and results of operations could be negatively impacted.

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The success of our AI initiatives depend on numerous factors outside our control, including the pace of AI technology evolution, the availability, capability, and cost of third-party AI tools and infrastructure, and our ability to integrate and deploy AI capabilities at the required pace. The benefits we expect from our AI initiatives, including improved execution speed, throughput, talent efficiency, operational productivity, and financial performance, may not be realized in the time frame we expect or at all. The aggregate financial impact of our AI initiatives are not yet reasonably estimable, and our investments in AI-native architecture, agentic workflows, AI-ready search, checkout, and merchant-facing tools may not be recoverable.

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Workforce reductions and organizational changes undertaken in connection with our transition to an AI-enabled operating model may also result in the loss of institutional knowledge, reduced employee engagement, challenges in attracting and retaining personnel with the skills required to execute our strategy, and operational inefficiencies during periods of transition. Our attempts at automation may not succeed in whole or part.

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In addition to execution risks, our public statements about our AI initiatives and our AI strategy, including the pace, nature, and expected operational and financial impact of our deployment of AI agents, are subject to regulatory and litigation risk if not adequately substantiated or later viewed as inconsistent with our actual capabilities or results. Even where our statements have a reasonable basis when made, the rapid evolution of AI technology may render them stale or subject to challenge.

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Our use of AI and machine learning poses new operational, legal, and reputational risks.

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We continue to integrate AI technologies into our platform to enhance internal efficiency, marketing automation, and customer support. The use of these rapidly evolving technologies presents significant risks, including:

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•Accuracy and Reputation: Generative AI models may produce inaccurate, biased, or offensive content. If our AI tools generate false deal terms or inappropriate customer communications, we could be exposed to liability for deceptive trade practices, regulatory scrutiny, and reputational harm.

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•Intellectual Property and Liability: Content generated by AI, such as deal descriptions or marketing images, may not be eligible for copyright protection, limiting our ability to enforce intellectual property rights. Additionally, if our AI vendors use copyrighted third-party data to train their models, we could face infringement claims, resulting in legal costs or restrictions on our use of AI-generated content.

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•Data Security and Privacy: The use of third-party AI tools may require sharing sensitive data with vendors. If proprietary merchant information or consumer personal data is inadvertently fed into public AI models, it could be exposed or used to train models accessible to others, increasing the risk of data breaches and loss of confidential information. Even where we use non-public, enterprise, or contractually restricted third-party AI tools, sensitive or proprietary information, including, but not limited to, PII and financial or other information, may still be unintentionally exposed through employee or vendor misuse, misconfiguration, prompt injection or similar manipulation, or as a result of data breaches or cybersecurity attacks affecting our AI vendors or the underlying model providers.

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•Regulatory Uncertainty: Laws and regulations governing AI are rapidly evolving. New or proposed regulations could impose significant compliance costs, restrict our ability to deploy AI tools, or require changes to our business practices.

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While we continue to implement policies and controls to mitigate these risks, the effectiveness of such measures is not assured given the pace of technological and regulatory change. If any of these risks materialize, our operations, financial results, and reputation could be adversely affected.