Groupon, Inc.

NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Company Information

Groupon, Inc. and its subsidiaries, which commenced operations in October 2008, is a global scaled two-sided marketplace that connects consumers to merchants by offering goods and services, generally at a discount. Consumers access those marketplaces through our mobile applications and our websites.

Our operations are organized intotwo segments: North America and International. See Note 14, Segment Information, for more information.

Unaudited Interim Financial Information

We have prepared the accompanying Condensed Consolidated Financial Statements in accordance with GAAP and applicable rules and regulations of the SEC for interim financial reporting. These Condensed Consolidated Financial Statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for the fair presentation of the Condensed Consolidated Balance Sheets, Statements of Operations and Comprehensive Income (Loss), Stockholders' Equity (Deficit) and Cash Flows for the periods presented. These Condensed Consolidated Financial Statements and notes should be read in conjunction with the audited Consolidated Financial Statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2025.

In connection with the dispositions of our operations in Latin America in 2017, we recorded indemnification liabilities for certain tax assessments and other matters which were presented in Income (loss) from discontinued operations, net of tax. During the nine months ended September 30, 2025, we recorded an additional accrual related to one of the assessments under the indemnification which is presented in Income (loss) from discontinued operations, net of tax. See Note 7, Commitments and Contingencies, for additional information.

Principles of Consolidation

The Condensed Consolidated Financial Statements include the accounts of Groupon, Inc. and its wholly-owned subsidiaries, majority-owned subsidiaries over which we exercise control and variable interest entities for which we are the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation. Outside stockholders' interests in subsidiaries are shown in the Condensed Consolidated Financial Statements as Noncontrolling interests. Investments in entities in which we do not have a controlling financial interest are accounted for at fair value as available-for-sale securities or at cost adjusted for observable price changes and impairments, as appropriate.

Purchase of Noncontrolling Interest

On August 18, 2026, we acquired the remaining 50% of the outstanding interests in the consolidated limited liability company (the "LLC") that administers our arrangement to offer deals related to live events. The LLC was previously a variable interest entity that we consolidated as its primary beneficiary. As a result of the transaction, we became the sole owner of the LLC. The LLC agreement provides for the dissolution of the LLC upon either party becoming a majority owner. Total consideration consisted of a nominal upfront cash payment and contingent payments over the 12 months following the closing date, which are based on collections by the LLC associated with the strategic partner's share of event inventory on our platform as of the acquisition date. We do not expect the contingent payments, including amounts remaining to be paid after September 30, 2026, to be significant. The aggregate consideration and the related dissolution were not material to our Condensed Consolidated Financial Statements during the three and nine months ended September 30, 2026.

Simultaneously, we entered into a commercial agreement with an affiliate of the strategic partner that allows us to continue to market and distribute primary ticket inventory from that affiliate's clients through our marketplace.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Estimates in our financial statements include, but are not limited to, the following: variable consideration from unredeemed vouchers; income taxes; stock-based compensation; leases; initial valuation and subsequent impairment testing of goodwill, other intangible assets and long-lived assets; investments; receivables; customer credits, customer refunds and other reserves; contingent liabilities; and the useful lives of property, equipment and software and intangible assets. Actual results could differ materially from those estimates.

Reclassifications

Certain reclassifications have been made to the Condensed Consolidated Financial Statements of prior periods to conform to the current period presentation.

Adoption of New Accounting Standards

There were no new accounting standards adopted during the nine months ended September 30, 2026.

Recently Issued Accounting Standards

In November 2024, the FASB issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027 and early adoption is permitted. The Company is assessing the effect this guidance may have on our disclosures.

In September 2025, the FASB issued ASU 2025-06 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This ASU removes all references to project stages in ASC Subtopic 350-40, clarifies the threshold to begin capitalizing costs and specifies that the property, plant and equipment disclosure requirements under ASC Subtopic 360-10 apply to all capitalized software costs accounted for under ASC Subtopic 350-40. The amendments in this update are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods beginning within those annual reporting periods, and early adoption is permitted. The Company is assessing the effect this guidance may have on our consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11 Interim Reporting (Topic 270): Narrow Scope Improvements. The amendments in this update are effective for interim reporting periods beginning after December 15, 2027 and early adoption is permitted. The Company is assessing the effect this guidance may have on our disclosures.

NOTE 2. BUSINESS DISPOSITIONS

There were no business dispositions during the nine months ended September 30, 2026.

On April 10, 2025, the Company completed the sale of Giftcloud, a non-core, UK-based business, for cash consideration of $17.1 million. The net proceeds of $15.0 million were received in 2025. The related cash activity is presented within Net cash provided by (used in) investing activities from continuing operations for the nine months ended September 30, 2025.

We recognized a pre-tax gain on the sale of $10.7 million that is presented within Gain on sale of business in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2025.

NOTE 3. GOODWILL AND LONG-LIVED ASSETS

Goodwill

As of September 30, 2026 and December 31, 2025, the balance of our goodwill was $178.7 million. There was no goodwill activity during the nine months ended September 30, 2026 and 2025. All goodwill is within our North America segment, which had a negative carrying value as of September 30, 2026.

Long-Lived Assets

The following table summarizes intangible assets as of September 30, 2026 and December 31, 2025 (in thousands):

Amortization of intangible assets is computed using the straight-line method over the estimated useful life of the asset, which ranges from 1 to 10 years. Amortization expense related to intangible assets was $0.2 million and $0.3 million for the three months ended September 30, 2026 and 2025, and $0.9 million and $1.1 million for the nine months ended September 30, 2026 and 2025. As of September 30, 2026, estimated future amortization expense related to intangible assets is as follows (in thousands):

NOTE 4. INVESTMENTS

Other Equity Investments

Other equity investments represent equity investments without readily determinable fair values, which we elected to record at cost adjusted for observable price changes and impairments.

As of September 30, 2026 and December 31, 2025, our carrying value in other equity investments was $74.8 million, and relates solely to our non-controlling equity interest in SumUp, our only equity investment with a positive carrying value as of these dates. The Company held a 1% to 19% ownership percentage in our other equity investments as of September 30, 2026 and December 31, 2025.

Available-for-Sale Securities

Our available-for-sale securities had a fair value of $0 as of September 30, 2026 and December 31, 2025 and no financial statement activity was recorded for the three and nine months ended September 30, 2026 and 2025.

Fair Value Option Investments

Our fair value option investments had a fair value of $0 as of September 30, 2026 and December 31, 2025 and no financial statement activity was recorded for the three and nine months ended September 30, 2026 and 2025. As of September 30, 2026 and December 31, 2025, the Company held a 10% to 19% ownership percentage in our fair value option investments.

NOTE 5. SUPPLEMENTAL CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS INFORMATION

The following table summarizes Prepaid expenses and other current assets as of September 30, 2026 and December 31, 2025 (in thousands):

(1) Primarily consists of cash collateral related to our letters of credit and other cash collateral. See Note 6, Financing Arrangements, for additional information.

The following table summarizes Other non-current assets as of September 30, 2026 and December 31, 2025 (in thousands):

The following table summarizes Accrued expenses and other current liabilities as of September 30, 2026 and December 31, 2025 (in thousands):

(1) See Note 7, Commitments and Contingencies, for additional information.

The following table summarizes Other non-current liabilities as of September 30, 2026 and December 31, 2025 (in thousands):

The following table summarizes Other income (expense), net for the three and nine months ended September 30, 2026 and 2025 (in thousands):

(1) Foreign currency gains (losses), net for the three and nine months ended September 30, 2026 and 2025 primarily relate to the remeasurement of U.S. dollar-denominated intercompany balances held by certain foreign subsidiaries whose functional currencies are not the U.S. dollar, principally subsidiaries with Euro functional currencies. The amount of foreign currency gains or losses recognized depends on both the magnitude and direction of exchange-rate movements during the period and the level of outstanding intercompany balances.

NOTE 6. FINANCING ARRANGEMENTS

The following table summarizes the outstanding debt obligations as of September 30, 2026 and December 31, 2025 and related maturity dates, contractual interest rates and carrying amounts:

(1) The original principal of the 2027 Notes at issuance was recorded at fair value of $196.2 million, which is equal to the exchanged principal of $176.3 million of the 2026 Notes and cash consideration received of $19.9 million. After the exchange on July 2, 2025, the remaining fair value of the principal recorded at issuance of the 2027 Notes was $46.2 million.

Convertible Senior Notes due 2030

On July 2, 2025, the Company issued its senior, unsecured 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.

The Company determined that the exchange of the 2026 Notes and the 2027 Notes for 2030 Notes should be accounted for as a debt extinguishment, resulting in a loss on extinguishment of debt of $99.9 million, which is presented within Loss on extinguishment of debt in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025. 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 2027 Notes exchanged.

The interest on the 2030 Notes is payable semi-annually in arrears on each June 30 and December 30 of each year.

The 2030 Notes are convertible into Common Stock or a combination of cash and Common Stock, at the Company’s election. Subject to certain conditions, holders of the 2030 Notes may convert all or any portion of their 2030 Notes at their option at any time on or after March 31, 2030, until the close of business on the second scheduled trading day immediately preceding the maturity date. In addition, if specified events occur in a calendar quarter prior to March 31, 2030, the holders may elect to convert on an effective date of such event. Based on the closing price of the Common Stock of $19.76 as of September 30, 2026, the if-converted value of the 2030 Notes was less than the principal amount.

The initial conversion rate of the 2030 Notes is 18.503 shares of Company Common Stock per $1,000 principal amount of 2030 Notes, which is equivalent to an initial conversion price of approximately $54.04 per share, subject to customary adjustments. In addition, upon the occurrence of a make-whole fundamental change, as defined in the 2030 Notes Indenture, or if we exercise the optional redemption, we will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2030 Notes in connection with such a make-whole fundamental change or redemption.

In no event will the conversion rate be increased to exceed 27.7546 shares of the Company’s Common Stock per $1,000 principal amount of the 2030 Notes, subject to adjustments.

The Company is entitled to not effect any conversion that will result in any holder thereof, together with

any Attribution Parties, beneficially owning more than 4.9% of the Company's Common Stock, after giving effect to such conversion. The Company’s obligation to deliver any shares of Common Stock that will result in any holder thereof to exceed the 2030 Notes Exchange Cap is not extinguished and is suspended until such holder advises the Company in writing that it may receive the 2030 Notes Excess Shares without exceeding the 2030 Notes Exchange Cap.

The Company has the conditional right to redeem the notes for cash on or after July 2, 2028. The redemption price will be 100.0% of the principal amount, plus accrued and unpaid interest. No sinking fund is provided for the 2030 Notes. The Company has the right to repurchase notes in the open market or through other means, without the consent of holders and without prior notice.

The 2030 Notes Indenture contains customary provisions relating to events of default. If an event of default occurs and is continuing, the principal amount of the 2030 Notes and any accrued and unpaid interest may be declared immediately due and payable. In the case of bankruptcy or insolvency, the principal amount of the 2030 Notes and any accrued and unpaid interest would automatically become immediately due and payable. The 2030 Notes will be considered in default if there is a default by the Company or any of its significant subsidiaries with respect to indebtedness for borrowed money of at least $75.0 million.

The carrying value of the 2030 Notes was determined by deducting third party transaction costs incurred in connection with the issuance of the 2030 Notes of $2.3 million from the 2030 Notes fair value of $267.7 million at issuance. The fair value of the principal of the 2030 Notes at issuance was determined using a lattice model. The transaction costs are amortized as interest expense. The fair value of the 2030 Notes at issuance exceeded the principal amount by $23.6 million. This premium is being amortized over the term of the 2030 Notes as a reduction of interest expense. Together with the cash interest, the amortization of debt issuance costs and debt premium result in the annual effective interest rate of 2.99% over the term of the 2030 Notes.

We classified the fair value of the 2030 Notes as a Level 3 measurement due to the lack of observable market data over fair value inputs such as our stock price volatility over the term of the 2030 Notes and our cost of debt. The estimated fair value of the 2030 Notes as of September 30, 2026 and December 31, 2025 was $230.9 million and$223.4 million, respectively, and was determined using a lattice model.

During the three and nine months ended September 30, 2026 and 2025, we recognized interest costs on the 2030 Notes as follows (in thousands):

Convertible Senior Notes due 2027

In November 2024, the Company issued $197.3 million aggregate principal amount of the 2027 Notes to the 2027 Notes Offering Participants in a private offering. The interest on the 2027 Notes is payable semi-annually in arrears on March 15 and September 15 of each year.

The initial conversion rate of the 2027 Notes is 33.333 shares of Common Stock per $1,000 principal amount of 2027 Notes, which is equivalent to an initial conversion price of approximately $30.00 per share, subject to customary adjustments. The 2027 Notes are convertible into Common Stock or a combination of cash and Common Stock, at the Company's election. Upon the occurrence of a make-whole fundamental change, we will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2027 Notes in connection with such make-whole fundamental change.

The Company is entitled to not effect any conversion that will result in any holder thereof, together with any Attribution Parties, beneficially owning more than 9.9% of the Company's Common Stock, after giving effect to

such conversion. The Company’s obligation to deliver any shares of Common Stock that will result in any holder thereof to exceed the 2027 Notes Exchange Cap is not extinguished and is suspended until such holder advises the Company in writing that it may receive the 2027 Notes Excess Shares without exceeding the 2027 Notes Exchange Cap.

The 2027 Notes will be considered in default if there is a default by the Company or any of its significant subsidiaries with respect to indebtedness for borrowed money of at least $35.0 million.

Concurrent with the issuance of the 2030 Notes in exchange for a large portion of the 2027 Notes, all of the negative covenants and related provisions from the 2027 Notes Indenture were eliminated, and all of the liens on the collateral securing the obligations under the 2027 Notes were released. In addition, the Company was relieved of its obligation to pay additional interest of 2.5% per annum of the 2027 Notes in the event that it failed to sell or pledge certain of its assets as part of the collateral for the 2027 Notes.

Following the issuance of the 2030 Notes and partial exchange of the 2027 Notes in July 2025, the remaining outstanding principal of the 2027 Notes was $47.3 million and the annual effective interest rate is 7.27%.

We classified the fair value of the 2027 Notes as a Level 3 measurement due to the lack of observable market data over fair value inputs such as our stock price volatility over the term of the 2027 Notes and our cost of debt. The estimated fair value of the 2027 Notes as of September 30, 2026 and December 31, 2025 was $47.8 million and $48.8 million, respectively, and was determined using a lattice model.

For the three and nine months ended September 30, 2026 and 2025, we recognized interest costs on the 2027 Notes as follows (in thousands):

Convertible Senior Notes due 2026

On March 15, 2026, the Company paid off the remaining $33.7 million aggregate principal amount of the 2026 Notes upon their scheduled maturity. The total payment included the outstanding principal balance and all accrued and unpaid interest up to the maturity date. The repayment of principal is reflected in cash flows used in financing activities, and the payment of accrued interest is reflected in cash flows used in operating activities, each within the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2026.

Prior to the repayment of the 2026 Notes upon maturity, the interest on the 2026 Notes was payable semi-annually in arrears on March 15 and September 15 of each year. The annual effective interest rate of the 2026 Notes was 1.83%, which included the amortization of debt discounts over the term of the notes.

We classified the fair value of the 2026 Notes as a Level 3 measurement due to the lack of observable market data over fair value inputs such as our stock price volatility over the term of the 2026 Notes and our cost of debt. The estimated fair value of the 2026 Notes as of December 31, 2025 was $33.4 million, determined using a lattice model.

During the three and nine months ended September 30, 2026 and 2025, we recognized interest costs on

the 2026 Notes as follows (in thousands):

Capped Call Transactions

In connection with the repayment of the 2026 Notes at maturity, the Company's associated 2026 Capped Calls expired in March 2026. Because the 2026 Capped Calls were classified as stockholders' equity and were not subject to remeasurement, there was no impact to the Company's Condensed Consolidated Statements of Operations upon expiration.

Cash Collateral Agreement

We maintain access to letters of credit under our Cash Collateral Agreement. Under this arrangement, cash collateral is required for all letters of credit, which is classified as restricted cash and presented within Prepaid expenses and other current assets on our Condensed Consolidated Balance Sheets. The amounts committed to letters of credit under the Cash Collateral Agreement as of September 30, 2026 and December 31, 2025 were $27.4 million and $32.8 million, respectively. During the three months ended September 30, 2026, the Portuguese Tax Authority released the Company's $4.0 million bank guarantee related to the 2013 to 2015 Portugal VAT assessment. See Note 7, Commitments and Contingencies, for additional information. There were no changes to the terms of the Cash Collateral Agreement during the periods presented. See Note 5, Supplemental Condensed Consolidated Balance Sheets and Statements of Operations Information, for additional information.

NOTE 7. COMMITMENTS AND CONTINGENCIES

Our contractual obligations and commitments as of September 30, 2026 and through the date of this report, did not materially change from the amounts set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, except as discussed below.

Purchase Obligations

During the nine months ended September 30, 2026 and through the date of this report, we entered into non-cancellable arrangements with third parties, primarily related to cloud computing and other information technology services. Payments under these new contractual obligations are as follows (in thousands):

Legal Matters and Other Contingencies

From time to time, we are party to various legal proceedings incident to the operation of our business. For example, we currently are involved in proceedings brought by merchants, employment and related matters, intellectual property infringement suits, customer lawsuits, stockholder claims relating to U.S. securities law, consumer class actions and suits alleging, among other things, violations of state consumer protection or privacy laws.

We havetwo separate Portugal VAT assessments covering different periods. The 2011 to 2012 Portugal VAT assessment, totaling up to $4.8 million inclusive of penalties and interest through September 30, 2026, remains under appeal. We lodged our initial appeal in the Portuguese courts in 2015. During 2024, we received a negative ruling at the lowest-level court to assert factual and legal challenges. Based on this ruling and consideration of relevant facts and circumstances, we concluded an adverse outcome was probable and recorded a $4.6 million contingent liability, which is presented in Accrued expenses and other current liabilities in our Condensed Consolidated Balance Sheets as of September 30, 2026. There have been no updates during the current quarter related to the appeal or the status of this contingent liability. We have a bank guarantee of $4.2 million in place relating to this assessment, classified as restricted cash in our Condensed Consolidated Balance Sheets as of September 30, 2026.

The 2013 to 2015 Portugal VAT assessment, totaling approximately $4.5 million inclusive of penalties and interest, is a separate matter. On October 31, 2024, we learned that Portugal’s highest-level court declined to hear our appeal. The assessment was final and became due during the fourth quarter of 2024. In July 2026, we received a formal demand notice for the principal tax and interest, and the Portuguese Tax Authority released the $4.0 million bank guarantee we had in place relating to this assessment which was classified as restricted cash in our Condensed Consolidated Balance Sheets as of December 31, 2025. The guarantee was drawn down in full and applied to the principal tax and interest, settling the assessment, and the related liability was reduced accordingly. The demand notice did not include administrative penalties, which will be separately assessed by the Portuguese Tax Authority. The $0.5 million previously accrued for those penalties, representing our best estimate of the amount we expect to incur, remains in Accrued expenses and other current liabilities in our Condensed Consolidated Balance Sheets as of September 30, 2026.

The Company has been named as a defendant in putative class action complaints alleging violations of the Telephone Consumer Protection Act of 1991 and related state telemarketing laws in connection with the Company's SMS marketing program. These matters are in an early stage in the litigation process and no class has been certified in any of the actions. The Company believes it has meritorious defenses to the allegations in these matters and intends to defend itself vigorously. Because these proceedings are at a preliminary stage, the Company is currently unable to predict their ultimate outcome or estimate the amount or range of possible loss, if any. Accordingly, no amounts have been accrued in the accompanying financial statements. While the Company cannot provide assurance as to the ultimate resolution of these matters, it does not currently believe an unfavorable outcome in any of these cases is probable.

In addition, third parties have from time to time claimed, and others may claim in the future, that we have infringed their intellectual property rights. We are subject to intellectual property disputes, including patent infringement claims, and expect that we will continue to be subject to intellectual property infringement claims as our services expand in scope and complexity. In the past and/or at present, we have litigated patent infringement and other intellectual property-related claims, including pending litigation or trademark disputes relating to, for example, our Goods category, some of which involved or could have involved potentially substantial claims for damages or injunctive relief. We may also become more vulnerable to third-party claims as laws such as the Digital Millennium Copyright Act are interpreted by the courts, and we become subject to laws in jurisdictions where the underlying laws with respect to the potential liability of online intermediaries are either unclear or less favorable. We believe that additional lawsuits alleging that we have violated patent, copyright or trademark laws may be filed against us. Intellectual property claims, whether meritorious or not, are time-consuming and often costly to resolve, could require expensive changes in our methods of doing business or the goods we sell, or could require us to enter into costly royalty or licensing agreements.

We also are subject to consumer claims, lawsuits, and arbitrations relating to alleged violations of consumer protection or privacy rights and statutes, some of which could involve potentially substantial claims for damages, including statutory or punitive damages. Consumer and privacy-related claims, lawsuits, and arbitrations, whether meritorious or not, could be time-consuming, result in costly litigation, damage awards, fines and penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, or require us to change our business practices, sometimes in expensive ways. In addition, plaintiffs’ firms have increasingly used mass arbitration tactics, in which large numbers of substantially similar individual arbitration demands are filed simultaneously, often seeking to impose significant upfront filing, administrative, or settlement costs regardless of the merits of the underlying claims. The use of such tactics could increase our dispute resolution costs, divert management attention, and adversely affect our results of operations, even if the claims asserted are not ultimately successful.

We are also subject to, or in the future may become subject to, a variety of regulatory inquiries, audits, and investigations across the jurisdictions where we conduct our business, including, for example, inquiries related to consumer protection, employment matters and/or hiring practices, marketing practices, tax, unclaimed property and privacy rules and regulations. Any regulatory actions against us, whether meritorious or not, could be time-consuming, result in costly litigation, damage awards, fines and penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, require us to change our business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources, materially damage our brand or reputation, or otherwise harm our business.

We establish an accrued liability for loss contingencies related to legal, regulatory and indirect tax matters when the loss is both probable and reasonably estimable. Those accruals represent management's best estimate of probable losses, and in such cases, there may be an exposure to loss in excess of the amounts accrued. For certain of the matters described above, there are inherent and significant uncertainties based on, among other factors, the stage of the proceedings, developments in the applicable facts of law, or the lack of a specific damage claim. However, we believe that the amount of reasonably possible losses in excess of the amounts accrued for those matters would not have a material adverse effect on our business, consolidated financial position, results of operations or cash flows. Our accrued liabilities for loss contingencies related to legal, regulatory and indirect tax matters may change in the future as a result of new developments, including, but not limited to, the occurrence of new legal matters, changes in the law or regulatory environment, adverse or favorable rulings, newly discovered facts relevant to the matter, or changes in the strategy for the matter. Regardless of the outcome, litigation and other regulatory matters can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Indemnifications

In connection with the disposition of our operations in Latin America in 2017, we recorded $5.4 million in indemnification liabilities for certain tax and other matters upon the closing of the transactions within discontinued operations. We estimated the indemnification liabilities using a probability-weighted expected cash flow approach. In 2019 and 2020, we decreased our indemnification liabilities due to the expiration of certain indemnification obligations. Following these decreases, our remaining indemnification liabilities were $2.8 million.

After negative rulings at the first and second tier courts in March 2024 and April 2025 for the majority of the assessed amounts, the Company filed a special appeal to the second-level court requesting the court to revisit certain aspects of its decision. The second-level court denied the special appeal and Groupon filed an appeal with the third tier court. For one of the matters appealed, in the first quarter of 2025, the Company concluded an adverse outcome is probable based on the second tier court findings specific to that case. The Company therefore determined it is probable a loss has been incurred for this individual matter and recorded additional liability of $0.5 million, including interest and penalties, presented within Income (loss) from discontinued operations in the Condensed Consolidated Statement of Operations during the nine months ended September 30, 2025. Our total remaining indemnification liabilities were $3.5 million as of September 30, 2026, inclusive of the contingent liability and related interest and penalties incurred to date of $0.7 million. There have been no updates during the current quarter related to the appeal or the status of this indemnification liability.

We estimate that the total amount of obligations that are reasonably possible to arise under the indemnifications should not exceed our bank guarantee of $10.2 million for these assessments. Our bank guarantee is classified as restricted cash in our Condensed Consolidated Balance Sheets as of September 30, 2026.

In the normal course of business to facilitate transactions related to our operations, we indemnify certain parties, including employees, lessors, service providers, merchants and counterparties to investment agreements and asset and stock purchase agreements with respect to various matters. We have agreed to hold certain parties harmless against losses arising from a breach of representations or covenants, or other claims made against those parties. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. We are also subject to increased exposure to various claims as a result of our divestitures and acquisitions. We may also become more vulnerable to claims as we expand the range and scope of our services and are subject to laws in jurisdictions where the underlying laws with respect to potential liability are either unclear or less favorable. In addition, we have entered into indemnification agreements with our officers, directors and underwriters, and our bylaws contain similar indemnification obligations that cover officers, directors, employees and other agents.

Except as noted above, it is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, any payments that we have made under these agreements have not had a material impact on our operating results, financial position or cash flows.

NOTE 8. STOCKHOLDERS' EQUITY (DEFICIT) AND COMPENSATION ARRANGEMENTS

Share Repurchase Program

In May 2018, the Board authorized us to repurchase up to $300.0 million of our Common Stock under our share repurchase program. During the three and nine months ended September 30, 2026, we repurchased 40.0 thousand and 2.8 million shares for an aggregate purchase price of $0.8 million and $32.2 million, respectively, (including fees and commissions) under our repurchase program. As of September 30, 2026, up to $212.8 million of Common Stock remained available for purchase under our program.

In October 2026 and through the date of this report, we repurchased an additional 637,581 shares for an aggregate price of $10.6 million (including fees and commissions) under our repurchase program.

The timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under the Notes, share price, available cash and other factors, and the program may be terminated at any time.

Groupon, Inc. Incentive Plan

We established the 2011 Plan under which options, RSUs and PSUs of up to 20,775,000 shares of Common Stock are authorized for future issuance to employees, consultants and directors. The 2011 Plan is administered by the Compensation Committee. As of September 30, 2026,3,989,479 shares of Common Stock were available for future issuance under the 2011 Plan.

Restricted Stock Units

The RSUs generally have vesting periods betweenone andthree years and are amortized on a straight-line basis over their requisite service period.

The vesting of certain RSUs granted in 2026 is adjusted based on a Performance Multiplier determined by the participant's YEPR for the relevant annual performance determination period. The Performance Multiplier ranges from 0% to 300%.

Certain RSUs granted in 2026 were granted to participants who also hold unvested 2025 PSUs. For these participants, the Year 1 and Year 2 tranches were subject to deferral until May 1, 2029 if the first stock price hurdle under the 2025 PSU Program of $19.75 was achieved and certified by the Compensation Committee on or before the otherwise applicable vesting date. Any such deferral does not affect the number of RSUs granted, the applicable Performance Multiplier, or the terms of the participants' 2025 PSUs. In July 2026, the first stock price hurdle of $19.75 under the 2025 PSU Program was achieved and certified. As a result, vesting of the Year 1 and Year 2 tranches of these RSUs is deferred to May 1, 2029.

Compensation cost for the RSUs subject to a Performance Multiplier adjustment is accrued based on the estimated YEPR outcome at each period end and adjusted upon annual YEPR certification by the Compensation Committee. As of September 30, 2026, the Company estimated the Performance Multiplier at 100%.

The table below summarizes RSU activity for the nine months ended September 30, 2026:

(1) The number of RSUs with service and performance vesting conditions included in the granted amount reflects the shares that would be eligible to vest at 100% of the Performance Multiplier.

As of September 30, 2026, $14.0 million of unrecognized compensation costs related to unvested RSUs are expected to be recognized over a remaining weighted-average period of 1.76 years.

Stock Options

In March 2023, we granted our CEO options to purchase 3,500,000 shares with an exercise price of $6.00 per share, which vested in full in March 2025. During the second quarter of 2023, the CEO exercised 437,500 vested options. On June 11, 2026, the CEO exercised the remaining 3,062,500 options outstanding on a net-share-settled basis. Of the shares issuable upon exercise,1,110,943 shares were withheld to satisfy the $18.4 million aggregate exercise price and 236,242 shares were withheld to satisfy $3.9 million of mandatory statutory tax withholding, resulting in a net issuance of 1,715,315 shares of Common Stock. The Company remitted the $5.2 million of related taxes, comprising $3.9 million of statutory withholding on the CEO’s behalf, which is reflected in cash flows used in financing activities, and $1.3 million of employer payroll taxes, which is reflected in cash flows used in operating activities, each within the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2026.

The table below summarizes stock option activity for the nine months ended September 30, 2026:

Performance Share Units

We grant PSU awards to our executive and upper management teams under our 2024 Executive PSU, 2025 PSU, and 2026 PSU programs.

2024 Executive PSUs and 2025 PSUs

The 2024 Executive PSU and 2025 PSU programs require certain stock price hurdles, based on a 90 consecutive calendar day volume-weighted average stock price, and certain service conditions to be satisfied before the shares will vest. The following table summarizes the outstanding PSU award stock price hurdles and service conditions of the 2024 Executive PSU and 2025 PSU programs:

In 2025, the first, second, and third stock price hurdles under the 2024 Executive PSU Program were achieved based on the respective 90 consecutive calendar day volume-weighted average stock price. In July 2026, the first stock price hurdle of $19.75 under the 2025 PSU Program was achieved based on the 90 consecutive calendar day volume-weighted average stock price. Accordingly,165,032 2025 PSUs vested following certification of the Compensation Committee's determinations as to the satisfaction of the other requirements for such PSUs.

2026 PSUs

In May 2026, the Compensation Committee approved the 2026 PSU program under which the 2026 PSUs cliff-vest at the end of the Performance Period based on Groupon's rTSR percentile ranking versus the Russell 2000 Index and subject to continued service through the Performance Period.

rTSR is measured using 90-day VWAP as of the grant date and the end of the Performance Period, with dividends treated as reinvested. Certain 2026 PSUs include an adjustment mechanism designed to insulate the rTSR outcome from the effects of any SumUp liquidity or revaluation event. The number of 2026 PSUs eligible to vest ranges from 0% to 300% of target based on Groupon's rTSR percentile rank, subject to the Negative TSR Cap, which is capped at 100% if Groupon's absolute TSR is negative.

The following table summarizes the outstanding PSU award activity for the nine months ended September 30, 2026:

(1) Includes vesting of 23,721 units upon certification by the Compensation Committee that certain service and performance conditions were satisfied during the nine months ended September 30, 2026 under specified terms provided for under the grant agreements for our CEO, Dusan Senkypl, and former COO, Jiri Ponrt.

(2) 2026 PSUs presented at target (100% payout).

Because the 2024 Executive PSUs, 2025 PSUs, and 2026 PSUs are subject to market conditions, we used a Monte Carlo simulation to calculate the grant date fair value of the awards and the related derived service period. The explicit service period for the awards exceeds the derived service period and therefore we recognize the expense over the explicit service period.

The key inputs used in the Monte Carlo simulation and requisite service period are as follows:

As of September 30, 2026, we had unrecognized compensation costs related to unvested 2024 Executive PSUs, 2025 PSUs, and 2026 PSUs of $2.5 million, $12.0 million and $15.6 million, respectively. The cost is expected to be recognized over a remaining weighted-average period of 0.58 years,1.23 years, and 2.59 years related to 2024 Executive PSUs, 2025 PSUs and 2026 PSUs, respectively.

Major Rocket Incentive Shares

On March 11, 2025, the Company entered into a marketing agreement with Major Rocket with athree-year contractual term beginning January 1, 2025. Under the Major Rocket Agreement, Major Rocket is eligible to receive incentive compensation if the merchant offerings it is responsible for sourcing achieve certain financial benchmarks ranging in amount from $10.0 million to $25.0 million. The incentives payable to Major Rocket upon satisfaction of these benchmarks may be satisfied through the Company’s issuance of up to 954,000 shares of Common Stock or, at the Company’s election, the payment of cash in an amount equal to the then current value of such shares. The Company's intent is to settle the awards in shares of Common Stock.

As of September 30, 2026, the achievement of these benchmarks remained improbable based on forecasts through the end of 2027. Therefore, no stock-based compensation expense was recognized through September 30, 2026.

NOTE 9. REVENUE RECOGNITION

Refer to Note 14, Segment Information, for revenue summarized by reportable segment and category for the three and nine months ended September 30, 2026 and 2025.

Customer Credits

We issue credits to customers that can be applied to future purchases through our online marketplaces. Credits are primarily issued as consideration for refunds and, to a lesser extent, for customer relationship purposes. The following table summarizes the activity in the liability for customer credits for the nine months ended September 30, 2026 (in thousands):

(1)Customer credits can be redeemed through our online marketplaces for goods or services provided by a third-party merchant and revenue is recognized on a net basis as the difference between the carrying amount of the customer credit liability derecognized and the amount due to the merchant for the related transaction. Customer credits are typically used withinone year of issuance.

Costs of Obtaining Contracts

Incremental costs to obtain contracts with third-party merchants, such as sales commissions, are deferred and recognized on a straight-line basis over the expected period of the merchant arrangement, generally from 12 to 18 months. Deferred contract acquisition costs are presented in Prepaid expenses and other current assets and Other non-current assets in the Condensed Consolidated Balance Sheets. As of September 30, 2026 and December 31, 2025, deferred contract acquisition costs were $4.3 million and $5.4 million.

The amortization of deferred contract acquisition costs is classified within Selling, general and administrative expense in the Condensed Consolidated Statements of Operations. We amortized $1.8 million and $1.8 million of deferred contract acquisition costs for the three months ended September 30, 2026 and 2025 and $5.6 million and $4.9 million of deferred contract acquisition costs for the nine months ended September 30, 2026 and 2025.

Allowance for Expected Credit Losses on Accounts Receivable

Accounts receivable primarily represents the net cash due from credit card and other payment processors and from merchants and performance marketing networks for commissions earned on consumer purchases. The carrying amount of receivables is reduced by an allowance for expected credit losses that reflects management's best estimate of amounts that will not be collected. We establish an allowance for expected credit losses on accounts receivable based on identifying the following customer risk characteristics: size, type of customer and payment terms offered in the normal course of business. Receivables with similar risk characteristics are grouped into pools. For each pool, we consider the historical credit loss experience, current economic conditions, bankruptcy filings, published or estimated credit default rates, age of the receivable and any recoveries in assessing the lifetime expected credit losses.

The following table summarizes the activity in the allowance for expected credit losses on accounts receivable for the nine months ended September 30, 2026 (in thousands):

Variable Consideration for Unredeemed Vouchers

For merchant agreements with redemption payment terms, the merchant is not paid its share of the sale price for a voucher sold through one of our online marketplaces until the customer redeems the related voucher. If the customer does not redeem a voucher with such merchant payment terms, we retain all of the gross billings for that voucher, rather than retaining only our net commission. We estimate the variable consideration from vouchers that will not ultimately be redeemed using our historical voucher redemption experience and recognize that amount as revenue at the time of sale. We apply a constraint to ensure it is probable that a significant reversal of revenue will not occur in future periods. We recognized variable consideration from unredeemed vouchers that were sold in a prior period of $3.5 million and $1.7 million for the three months ended September 30, 2026 and 2025 and $7.6 million and $5.4 million for the nine months ended September 30, 2026 and 2025. When actual redemptions differ from our estimates, the effects could be material to the Condensed Consolidated Financial Statements.

NOTE 10. RESTRUCTURING AND RELATED CHARGES (CREDITS)

In May 2026, the Board approved the 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 having occurred by the end of the third quarter of 2026. In certain jurisdictions, workforce reductions remain subject to mandatory consultation processes, extending completion of those actions beyond the end of the third quarter of 2026. Costs incurred related to the 2026 Restructuring Plan are classified as Restructuring and related charges (credits) in the Condensed Consolidated Statements of Operations.

The Company estimates it will incur total pre-tax charges of $7.0 to $10.0 million in connection with its restructuring actions. Substantially all of the remaining pre-tax charges are expected to be paid in cash and relate to employee severance compensation and benefits, with an immaterial amount of charges related to other exit costs.

The following tables summarize costs incurred by segment related to the 2026 Restructuring Plan for the three and nine months ended September 30, 2026 (in thousands):

(1)The employee severance and benefits costs for the three and nine months ended September 30, 2026 are related to the termination of 336 employees, of which 90 were still completing their notice period. All respective legally-required severance and benefits related to these employees have been recognized as of September 30, 2026.

The following table summarizes restructuring liability activity for the period (in thousands):

During the three and nine months ended September 30, 2025, we recorded an immaterial amount of Restructuring and related charges (credits) under the 2022 and 2020 Restructuring Plans in the Condensed Consolidated Statements of Operations.

NOTE 11. INCOME TAXES

Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items.

Provision (benefit) for income taxes and Income (loss) from continuing operations before provision (benefit) for income taxes for the three and nine months ended September 30, 2026 and 2025 were as follows (in thousands):

(1)The three and nine months ended September 30, 2025 include $25.3 million of foreign income tax expense recognized for the Italy 2012 Assessment and the Italy 2017 Assessment.

Our U.S. Federal income tax rate is 21%. The primary factors impacting the effective tax rate for the three and nine months ended September 30, 2026 and 2025 were pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets. The effective tax rate for the nine months ended September 30, 2026 was further impacted by benefits due to return-to-provision adjustments and tax refunds received, partially offset by additional tax expense resulting from the signing of an advance pricing agreement with international tax authorities during the quarter ended March 31, 2026 and an increase in the Company's liability related to unremitted foreign earnings. For the three and nine months ended September 30, 2025, the effective tax rate was further impacted by U.S. pre-tax losses due to a loss on extinguishment of debt and the foreign income tax expense recognized for the Italy 2012 and Italy 2017 Assessments, partially offset by a benefit resulting from the enactment of the OBBB Act, primarily due to the elimination of the requirement to capitalize and amortize U.S.-based R&D expenditures. For the three and nine months ended September 30, 2026 and 2025, we continue to maintain a full valuation allowance against all U.S. federal and state deferred tax assets.

Given the Company’s recent history of U.S. taxable earnings, we believe that there is a reasonable possibility that within the next twelve months sufficient positive evidence may become available to allow the Company to reach a conclusion that a significant portion of the U.S. federal and state valuation allowance recorded will no longer be needed. The reversal would result in an income tax benefit for the quarterly and annual fiscal period in which the Company releases the valuation allowance. However, the exact timing and amount of the valuation allowance release, if at all, are subject to significant judgment and are dependent on the level of profitability and likelihood of future utilization of attributes that we are able to actually achieve.

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.

In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations or remit such earnings in a tax-efficient manner. Additionally, an actual repatriation from our non-U.S. subsidiaries could be subject to foreign and U.S. state income taxes. Aside from limited exceptions for which the related deferred tax liabilities are recognized as of September 30, 2026 and December 31, 2025, we do not intend to distribute earnings of foreign subsidiaries for which we have an excess of the financial reporting basis over the tax basis of our investments and therefore have not recorded any deferred taxes related to such amounts. The actual tax cost resulting from a distribution would depend on income tax laws and circumstances at the time of distribution. Determination of the amount of unrecognized deferred tax liability related to the excess of the financial reporting basis over the tax basis of our foreign subsidiaries is not practical due to the complexities associated with the calculation.

We are currently under audit by several jurisdictions, including the U.S. It is likely that the examination phase of some of those audits will conclude in the next 12 months. There are many factors, including factors outside of our control, which influence the progress and completion of those audits.

NOTE 12. FAIR VALUE MEASUREMENTS

Fair value is defined under GAAP as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability.

In determining fair value, we use valuation approaches within the fair value measurement framework. We have fair value option investments and available-for-sale securities that we measure using the income approach. We have classified these investments as Level 3 due to the lack of observable market data over fair value inputs such as cash flow projections and discount rates.

There was no material activity in the fair value of recurring Level 3 fair value measurements for the three and nine months ended September 30, 2026 and 2025.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis, including assets that are written down to fair value as a result of an impairment or modified due to an observable price change in an orderly transaction.

We did not record any significant nonrecurring fair value remeasurements for the three and nine months ended September 30, 2026 and 2025.

Estimated Fair Value of Financial Assets and Liabilities Not Measured at Fair Value

Our financial instruments not carried at fair value consist primarily of accounts receivable, restricted cash, accounts payable, accrued merchant and supplier payables, and accrued expenses. The carrying values of those assets and liabilities approximate their respective fair values as of September 30, 2026 and December 31, 2025 due to their short-term nature.

Our Notes are presented at their respective carrying values in our Condensed Consolidated Balance Sheets, as we have not elected the fair value option under ASC Subtopic 825-10 for any of our convertible notes. See Note 6, Financing Arrangements, for additional information.

NOTE 13. INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of common shares and the effect of potentially dilutive securities outstanding during the period. Potentially dilutive securities include stock options, RSUs, PSUs, ESPP shares, Major Rocket incentive shares, and convertible senior notes. If dilutive, those potentially dilutive securities are reflected in diluted net income (loss) per share using the treasury stock method, except for the convertible senior notes, which are subject to the if-converted method.

The following table sets forth the computation of basic and diluted net income (loss) per share of Common Stock for the three and nine months ended September 30, 2026 and 2025 (in thousands, except share amounts and per share amounts):

The following weighted-average potentially dilutive instruments are not included in the diluted net income (loss) per share calculations above because they would have had an antidilutive effect on the net income (loss) per share from continuing operations:

(1)The capped call transactions were intended to reduce potential dilution to our Common Stock in the event the 2026 Notes were converted into shares. If the 2026 Notes had converted on or prior to maturity on March 15, 2026, the exercise of the capped call transactions would have substantially offset the economic dilution that would have otherwise resulted from the issuance of shares upon conversion. The capped call transactions expired in connection with the maturity of the 2026 Notes.

(2)We apply the if-converted method in computing the effect of our convertible senior notes on diluted net income (loss) per share, whereby the numerator of our diluted net income (loss) per share computations is adjusted for interest expense, net of tax, and the denominator is adjusted for the number of shares into which the convertible senior notes could be converted. The effect is only included in the calculation of income (loss) per share for those instruments for which it would reduce income (loss) per share. See Note 6, Financing Arrangements, for additional information.

As of September 30, 2026, there were up to 3,273,513 shares of Common Stock issuable upon vesting of outstanding PSUs and Major Rocket incentive shares that were excluded from the table above based on our evaluation of the applicable market and performance conditions as of the end of the period. Refer to Note 8, Stockholders' Equity (Deficit) and Compensation Arrangements, for more information.

NOTE 14. SEGMENT INFORMATION

In accordance with ASC Topic 280, Segment Reporting, we disaggregate our operations intotwo operating and reportable segments: North America and International based on geographically distinct market dynamics. The segment information below reflects the operating results that are regularly provided to and are reviewed by our CODM, who is our CEO, to assess performance and make resource allocation decisions. Our segment information is based on the "management" approach. The "management" approach, as defined within ASC Topic 280, designates the internal reporting used by the CODM for making decisions and assessing performance as the source of our reportable segments. Our measure of segment profitability is contribution profit, defined as net revenue less cost of revenue and marketing expenses, as presented below, and is regularly provided to and reviewed by the CODM to allocate resources and assess performance. The CODM assesses our segments’ performance based on contribution profit predominantly in the monthly budget-to-actual variances analysis when making decisions about the allocation of our investment in marketing expenses to each segment. We do not report asset-related information by reportable segment because our CODM does not regularly receive asset information on a reportable segment basis.

The following table summarizes revenue by reportable segment and category for the three and nine months ended September 30, 2026 and 2025 (in thousands):

The following table summarizes contribution profit by reportable segment and reconciles total contribution profit for the reportable segments to consolidated income (loss) from continuing operations before provision (benefit) for income taxes for the three and nine months ended September 30, 2026 and 2025 (in thousands):

(1) Includes editorial costs, compensation expense for technology support personnel who are responsible for maintaining the infrastructure of our websites, amortization of internally-developed software relating to customer-facing applications, and web hosting.

(2) Includes offline marketing costs, such as television, compensation expense for marketing employees, and customer acquisition and activation expense.