QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|
SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended March 31, 2018
|
|
OR
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|
SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from ________________ to ________________
|
Delaware
|
|
27-0903295
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification No.)
|
|
|
|
600 West Chicago Avenue, Suite 400
Chicago, Illinois
|
|
60654
|
(Address of principal executive offices)
|
|
(Zip Code)
|
PART I. Financial Information
|
Page
|
Forward-Looking Statements
|
|
Item 1. Financial Statements and Supplementary Data
|
|
Condensed Consolidated Balance Sheets as of March 31, 2018 (unaudited) and December 31, 2017
|
|
Condensed Consolidated Statements of Operations for the three months ended March 31, 2018 and 2017 (unaudited)
|
|
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2018 and 2017 (unaudited)
|
|
Condensed Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2018 (unaudited)
|
|
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2017 (unaudited)
|
|
Notes to Condensed Consolidated Financial Statements (unaudited)
|
|
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
Item 3. Quantitative and Qualitative Disclosure about Market Risk
|
|
Item 4. Controls and Procedures
|
|
PART II. Other Information
|
|
Item 1. Legal Proceedings
|
|
Item 1A. Risk Factors
|
|
Item 2. Unregistered sales of equity securities and use of proceeds
|
|
Item 5. Other Information
|
|
Item 6. Exhibits
|
|
Signatures
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
725,909
|
|
|
$
|
880,129
|
|
Accounts receivable, net
|
81,571
|
|
|
98,294
|
|
||
Prepaid expenses and other current assets
|
89,282
|
|
|
94,025
|
|
||
Total current assets
|
896,762
|
|
|
1,072,448
|
|
||
Property, equipment and software, net
|
146,717
|
|
|
151,145
|
|
||
Goodwill
|
289,945
|
|
|
286,989
|
|
||
Intangible assets, net
|
16,925
|
|
|
19,196
|
|
||
Investments (including $103,579 and $109,751 at March 31, 2018 and December 31, 2017, respectively, at fair value)
|
129,373
|
|
|
135,189
|
|
||
Other non-current assets
|
23,206
|
|
|
12,538
|
|
||
Total Assets
|
$
|
1,502,928
|
|
|
$
|
1,677,505
|
|
Liabilities and Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
23,400
|
|
|
$
|
31,968
|
|
Accrued merchant and supplier payables
|
568,570
|
|
|
770,335
|
|
||
Accrued expenses and other current liabilities
|
265,920
|
|
|
331,196
|
|
||
Total current liabilities
|
857,890
|
|
|
1,133,499
|
|
||
Convertible senior notes, net
|
192,619
|
|
|
189,753
|
|
||
Other non-current liabilities
|
102,047
|
|
|
102,408
|
|
||
Total Liabilities
|
1,152,556
|
|
|
1,425,660
|
|
||
Commitments and contingencies (see Note 8)
|
|
|
|
||||
Stockholders' Equity
|
|
|
|
||||
Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized; 752,664,286 shares issued and 564,062,044 shares outstanding at March 31, 2018; 748,541,862 shares issued and 559,939,620 shares outstanding at December 31, 2017
|
75
|
|
|
75
|
|
||
Additional paid-in capital
|
2,192,469
|
|
|
2,174,708
|
|
||
Treasury stock, at cost, 188,602,242 shares at March 31, 2018 and December 31, 2017
|
(867,450
|
)
|
|
(867,450
|
)
|
||
Accumulated deficit
|
(1,006,308
|
)
|
|
(1,088,204
|
)
|
||
Accumulated other comprehensive income (loss)
|
29,936
|
|
|
31,844
|
|
||
Total Groupon, Inc. Stockholders' Equity
|
348,722
|
|
|
250,973
|
|
||
Noncontrolling interests
|
1,650
|
|
|
872
|
|
||
Total Equity
|
350,372
|
|
|
251,845
|
|
||
Total Liabilities and Equity
|
$
|
1,502,928
|
|
|
$
|
1,677,505
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Revenue:
|
|
|
|
||||
Service
|
$
|
301,797
|
|
|
$
|
301,577
|
|
Product
|
324,743
|
|
|
372,049
|
|
||
Total revenue
|
626,540
|
|
|
673,626
|
|
||
Cost of revenue:
|
|
|
|
||||
Service
|
31,145
|
|
|
42,873
|
|
||
Product
|
270,510
|
|
|
321,302
|
|
||
Total cost of revenue
|
301,655
|
|
|
364,175
|
|
||
Gross profit
|
324,885
|
|
|
309,451
|
|
||
Operating expenses:
|
|
|
|
||||
Marketing
|
99,156
|
|
|
86,342
|
|
||
Selling, general and administrative
|
222,061
|
|
|
232,058
|
|
||
Restructuring charges
|
283
|
|
|
2,731
|
|
||
Total operating expenses
|
321,500
|
|
|
321,131
|
|
||
Income (loss) from operations
|
3,385
|
|
|
(11,680
|
)
|
||
Other income (expense), net
|
(8,515
|
)
|
|
(4,602
|
)
|
||
Income (loss) from continuing operations before provision (benefit) for income taxes
|
(5,130
|
)
|
|
(16,282
|
)
|
||
Provision (benefit) for income taxes
|
(2,335
|
)
|
|
4,587
|
|
||
Income (loss) from continuing operations
|
(2,795
|
)
|
|
(20,869
|
)
|
||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
487
|
|
||
Net income (loss)
|
(2,795
|
)
|
|
(20,382
|
)
|
||
Net income attributable to noncontrolling interests
|
(4,093
|
)
|
|
(4,032
|
)
|
||
Net income (loss) attributable to Groupon, Inc.
|
$
|
(6,888
|
)
|
|
$
|
(24,414
|
)
|
|
|
|
|
||||
Basic and diluted net income (loss) per share:
|
|
|
|
||||
Continuing operations
|
$
|
(0.01
|
)
|
|
$
|
(0.04
|
)
|
Discontinued operations
|
0.00
|
|
|
0.00
|
|
||
Basic and diluted net income (loss) per share
|
$
|
(0.01
|
)
|
|
$
|
(0.04
|
)
|
|
|
|
|
||||
Weighted average number of shares outstanding
|
|
|
|
||||
Basic
|
561,735,937
|
|
|
562,195,243
|
|
||
Diluted
|
561,735,937
|
|
|
562,195,243
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Income (loss) from continuing operations
|
$
|
(2,795
|
)
|
|
$
|
(20,869
|
)
|
Other comprehensive income (loss) from continuing operations:
|
|
|
|
||||
Net change in unrealized gain (loss) on foreign currency translations adjustments
|
(1,568
|
)
|
|
430
|
|
||
Reclassification adjustments related to defined benefit pension plan
|
—
|
|
|
585
|
|
||
Net change in unrealized gain (loss) on available-for-sale securities (net of tax effect of $0 and $147 for the three months ended March 31, 2018 and 2017, respectively)
|
(501
|
)
|
|
239
|
|
||
Other comprehensive income (loss) from continuing operations
|
(2,069
|
)
|
|
1,254
|
|
||
Comprehensive income (loss) from continuing operations
|
(4,864
|
)
|
|
(19,615
|
)
|
||
|
|
|
|
||||
Income (loss) from discontinued operations
|
—
|
|
|
487
|
|
||
Other comprehensive income (loss) from discontinued operations - Foreign currency translation adjustments:
|
|
|
|
||||
Net unrealized gain (loss) during the period
|
—
|
|
|
(1,793
|
)
|
||
Reclassification adjustment included in net income (loss) from discontinued operations
|
—
|
|
|
(14,718
|
)
|
||
Net change in unrealized gain (loss)
|
—
|
|
|
(16,511
|
)
|
||
Comprehensive income (loss) from discontinued operations
|
—
|
|
|
(16,024
|
)
|
||
|
|
|
|
||||
Comprehensive income (loss)
|
(4,864
|
)
|
|
(35,639
|
)
|
||
Comprehensive income (loss) attributable to noncontrolling interests
|
(4,093
|
)
|
|
(4,032
|
)
|
||
Comprehensive income (loss) attributable to Groupon, Inc.
|
$
|
(8,957
|
)
|
|
$
|
(39,671
|
)
|
|
Groupon, Inc. Stockholders' Equity
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Treasury Stock
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Groupon, Inc. Stockholders' Equity
|
|
Non-controlling Interests
|
|
Total Equity
|
||||||||||||||||||||||
|
Shares
|
|
Amount
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||||||||||
Balance at December 31, 2017
|
748,541,862
|
|
|
$
|
75
|
|
|
$
|
2,174,708
|
|
|
(188,602,242
|
)
|
|
$
|
(867,450
|
)
|
|
$
|
(1,088,204
|
)
|
|
$
|
31,844
|
|
|
$
|
250,973
|
|
|
$
|
872
|
|
|
$
|
251,845
|
|
Cumulative effect of change in accounting principle, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88,945
|
|
|
—
|
|
|
88,945
|
|
|
—
|
|
|
88,945
|
|
||||||||
Reclassification for impact of U.S. tax rate change
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(161
|
)
|
|
161
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,888
|
)
|
|
—
|
|
|
(6,888
|
)
|
|
4,093
|
|
|
(2,795
|
)
|
||||||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,568
|
)
|
|
(1,568
|
)
|
|
—
|
|
|
(1,568
|
)
|
||||||||
Unrealized gain (loss) on available-for-sale securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(501
|
)
|
|
(501
|
)
|
|
—
|
|
|
(501
|
)
|
||||||||
Exercise of stock options
|
2,400
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||||
Vesting of restricted stock units and performance share units
|
4,157,462
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Shares issued under employee stock purchase plan
|
746,773
|
|
|
—
|
|
|
2,434
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,434
|
|
|
—
|
|
|
2,434
|
|
||||||||
Shares issued to settle liability-classified awards
|
1,240,379
|
|
|
—
|
|
|
6,436
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,436
|
|
|
—
|
|
|
6,436
|
|
||||||||
Tax withholdings related to net share settlements of stock-based compensation awards
|
(2,024,590
|
)
|
|
—
|
|
|
(9,355
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,355
|
)
|
|
—
|
|
|
(9,355
|
)
|
||||||||
Stock-based compensation on equity-classified awards
|
—
|
|
|
—
|
|
|
18,240
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,240
|
|
|
—
|
|
|
18,240
|
|
||||||||
Distributions to noncontrolling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,315
|
)
|
|
(3,315
|
)
|
||||||||
Balance at March 31, 2018
|
752,664,286
|
|
|
$
|
75
|
|
|
$
|
2,192,469
|
|
|
(188,602,242
|
)
|
|
$
|
(867,450
|
)
|
|
$
|
(1,006,308
|
)
|
|
$
|
29,936
|
|
|
$
|
348,722
|
|
|
$
|
1,650
|
|
|
$
|
350,372
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
(2,795
|
)
|
|
$
|
(20,382
|
)
|
Less: Income (loss) from discontinued operations, net of tax
|
—
|
|
|
487
|
|
||
Income (loss) from continuing operations
|
(2,795
|
)
|
|
(20,869
|
)
|
||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization of property, equipment and software
|
26,721
|
|
|
28,667
|
|
||
Amortization of acquired intangible assets
|
2,940
|
|
|
5,400
|
|
||
Stock-based compensation
|
19,326
|
|
|
19,701
|
|
||
Deferred income taxes
|
(6,575
|
)
|
|
(74
|
)
|
||
(Gain) loss from changes in fair value of investments
|
5,033
|
|
|
(303
|
)
|
||
Impairment of investment
|
855
|
|
|
—
|
|
||
Amortization of debt discount on convertible senior notes
|
2,866
|
|
|
2,587
|
|
||
Change in assets and liabilities, net of acquisitions and dispositions:
|
|
|
|
||||
Accounts receivable
|
17,623
|
|
|
10,594
|
|
||
Prepaid expenses and other current assets
|
9,601
|
|
|
5,380
|
|
||
Accounts payable
|
(8,341
|
)
|
|
(13,184
|
)
|
||
Accrued merchant and supplier payables
|
(143,330
|
)
|
|
(138,238
|
)
|
||
Accrued expenses and other current liabilities
|
(41,564
|
)
|
|
(36,040
|
)
|
||
Other, net
|
(2,107
|
)
|
|
(1,707
|
)
|
||
Net cash provided by (used in) operating activities from continuing operations
|
(119,747
|
)
|
|
(138,086
|
)
|
||
Net cash provided by (used in) operating activities from discontinued operations
|
—
|
|
|
(1,098
|
)
|
||
Net cash provided by (used in) operating activities
|
(119,747
|
)
|
|
(139,184
|
)
|
||
Investing activities
|
|
|
|
||||
Purchases of property and equipment and capitalized software
|
(20,144
|
)
|
|
(14,076
|
)
|
||
Acquisitions of intangible assets and other investing activities
|
(238
|
)
|
|
56
|
|
||
Net cash provided by (used in) investing activities from continuing operations
|
(20,382
|
)
|
|
(14,020
|
)
|
||
Net cash provided by (used in) investing activities from discontinued operations
|
—
|
|
|
(7,547
|
)
|
||
Net cash provided by (used in) investing activities
|
(20,382
|
)
|
|
(21,567
|
)
|
||
Financing activities
|
|
|
|
||||
Payments for purchases of treasury stock
|
—
|
|
|
(27,234
|
)
|
||
Taxes paid related to net share settlements of stock-based compensation awards
|
(9,179
|
)
|
|
(8,970
|
)
|
||
Proceeds from stock option exercises and employee stock purchase plan
|
2,434
|
|
|
2,468
|
|
||
Distributions to noncontrolling interest holders
|
(3,315
|
)
|
|
(3,450
|
)
|
||
Payments of capital lease obligations
|
(9,024
|
)
|
|
(8,067
|
)
|
||
Payments of contingent consideration related to acquisitions
|
(1,815
|
)
|
|
—
|
|
||
Other financing activities
|
—
|
|
|
(473
|
)
|
||
Net cash provided by (used in) financing activities
|
(20,899
|
)
|
|
(45,726
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash, including cash classified within current assets of discontinued operations
|
6,191
|
|
|
3,973
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash, including cash classified within current assets of discontinued operations
|
(154,837
|
)
|
|
(202,504
|
)
|
||
Less: Net increase (decrease) in cash classified within current assets of discontinued operations
|
—
|
|
|
(28,866
|
)
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(154,837
|
)
|
|
(173,638
|
)
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
885,481
|
|
|
874,906
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
730,644
|
|
|
$
|
701,268
|
|
Non-cash investing and financing activities
|
|
|
|
||
Continuing operations:
|
|
|
|
||
Equipment acquired under capital lease obligations
|
1,470
|
|
|
1,340
|
|
Increase (decrease) in liabilities related to purchases of property and equipment and capitalized software
|
(1,022
|
)
|
|
(1,185
|
)
|
Investments acquired in connection with business dispositions
|
—
|
|
|
2,022
|
|
|
March 31, 2018
|
|
March 31, 2017
|
|
December 31, 2017
|
||||||
Cash and cash equivalents
|
$
|
725,909
|
|
|
$
|
690,975
|
|
|
$
|
880,129
|
|
Restricted cash included in prepaid expenses and other current assets
|
4,332
|
|
|
5,250
|
|
|
4,932
|
|
|||
Restricted cash included in other non-current assets
|
403
|
|
|
5,043
|
|
|
420
|
|
|||
Cash, cash equivalents and restricted cash
|
$
|
730,644
|
|
|
$
|
701,268
|
|
|
$
|
885,481
|
|
|
Three Months Ended March 31, 2017
|
||
Net consideration received:
|
|
||
Fair value of minority investments retained or acquired
|
$
|
2,021
|
|
Cash proceeds received
|
3,462
|
|
|
Cash proceeds receivable
|
2,000
|
|
|
Less: transaction costs
|
1,394
|
|
|
Total net consideration received
|
6,089
|
|
|
Cumulative translation gain reclassified to earnings
|
14,718
|
|
|
Less: Net book value upon closing of the transactions
|
14,596
|
|
|
Less: Indemnification liabilities
(1)
|
5,365
|
|
|
Less: Unfavorable contract liability for transition services
|
2,114
|
|
|
Loss on dispositions
|
$
|
(1,268
|
)
|
(1)
|
See Note
8
,
Commitments and Contingencies
, for additional information about the indemnification liabilities.
|
|
Three Months Ended March 31, 2017
(1)
|
||
Service revenue
|
$
|
12,602
|
|
Product revenue
|
2,962
|
|
|
Service cost of revenue
|
(2,557
|
)
|
|
Product cost of revenue
|
(3,098
|
)
|
|
Marketing expense
|
(1,239
|
)
|
|
Selling, general and administrative expense
|
(9,908
|
)
|
|
Restructuring
|
(778
|
)
|
|
Other income, net
|
3,852
|
|
|
Income (loss) from discontinued operations before loss on dispositions and provision for income taxes
|
1,836
|
|
|
Loss on dispositions
|
(1,268
|
)
|
|
Provision for income taxes
|
(81
|
)
|
|
Income (loss) from discontinued operations, net of tax
|
$
|
487
|
|
(1)
|
The income (loss) from discontinued operations before loss on dispositions and provision for income taxes for the
three months ended March 31, 2017
includes the results of each business through its respective disposition date.
|
|
North America
|
|
International
|
|
Consolidated
|
||||||
Balance as of December 31, 2017
|
$
|
178,685
|
|
|
$
|
108,304
|
|
|
$
|
286,989
|
|
Foreign currency translation
|
—
|
|
|
2,956
|
|
|
2,956
|
|
|||
Balance as of March 31, 2018
|
$
|
178,685
|
|
|
$
|
111,260
|
|
|
$
|
289,945
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
Asset Category
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
||||||||||||
Customer relationships
|
$
|
57,573
|
|
|
$
|
48,845
|
|
|
$
|
8,728
|
|
|
$
|
56,749
|
|
|
$
|
46,513
|
|
|
$
|
10,236
|
|
Merchant relationships
|
11,755
|
|
|
10,302
|
|
|
1,453
|
|
|
11,598
|
|
|
9,853
|
|
|
1,745
|
|
||||||
Trade names
|
12,212
|
|
|
10,891
|
|
|
1,321
|
|
|
12,077
|
|
|
10,469
|
|
|
1,608
|
|
||||||
Developed technology
|
37,045
|
|
|
37,045
|
|
|
—
|
|
|
36,864
|
|
|
36,864
|
|
|
—
|
|
||||||
Patents
|
19,697
|
|
|
15,563
|
|
|
4,134
|
|
|
19,031
|
|
|
15,204
|
|
|
3,827
|
|
||||||
Other intangible assets
|
10,757
|
|
|
9,468
|
|
|
1,289
|
|
|
10,875
|
|
|
9,095
|
|
|
1,780
|
|
||||||
Total
|
$
|
149,039
|
|
|
$
|
132,114
|
|
|
$
|
16,925
|
|
|
$
|
147,194
|
|
|
$
|
127,998
|
|
|
$
|
19,196
|
|
Remaining amounts in 2018
|
$
|
7,870
|
|
2019
|
6,790
|
|
|
2020
|
1,280
|
|
|
2021
|
641
|
|
|
2022
|
325
|
|
|
Thereafter
|
19
|
|
|
Total
|
$
|
16,925
|
|
|
March 31, 2018
|
|
Percent Ownership of Voting Stock
|
|
December 31, 2017
|
|
Percent Ownership of Voting Stock
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
Convertible debt securities
|
$
|
11,070
|
|
|
|
|
$
|
11,354
|
|
|
|
||||
Redeemable preferred shares
|
14,576
|
|
|
19%
|
to
|
25%
|
|
15,431
|
|
|
19%
|
to
|
25%
|
||
Total available-for-sale securities
|
25,646
|
|
|
|
|
26,785
|
|
|
|
||||||
Fair value option investments
|
77,933
|
|
|
10%
|
to
|
19%
|
|
82,966
|
|
|
10%
|
to
|
19%
|
||
Other equity investments
(1)
|
25,794
|
|
|
1%
|
to
|
19%
|
|
25,438
|
|
|
1%
|
to
|
19%
|
||
Total investments
|
$
|
129,373
|
|
|
|
|
$
|
135,189
|
|
|
|
(1)
|
Represents equity investments without readily determinable fair values. Those investments were previously accounted for using the cost method of accounting. Under the cost method, investments were carried at cost and adjusted only for other-than-temporary declines in fair value, certain distributions and additional investments. The Company adopted the guidance in ASU 2016-01 on January 1, 2018. Under that guidance, the Company has elected to record equity investments without readily determinable fair values at cost adjusted for observable price changes and impairments. There were no adjustments for observable price changes or impairments related to these investments for the
three months ended March 31, 2018
.
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gain
|
|
Gross Unrealized Loss
(1)
|
|
Fair Value
|
|
Amortized Cost
|
|
Gross Unrealized Gain
|
|
Gross Unrealized Loss
(1)
|
|
Fair Value
|
||||||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Convertible debt securities
|
$
|
10,422
|
|
|
$
|
1,176
|
|
|
$
|
(528
|
)
|
|
$
|
11,070
|
|
|
$
|
10,205
|
|
|
$
|
1,653
|
|
|
$
|
(504
|
)
|
|
$
|
11,354
|
|
Redeemable preferred shares
|
14,576
|
|
|
—
|
|
|
—
|
|
|
14,576
|
|
|
15,431
|
|
|
—
|
|
|
—
|
|
|
15,431
|
|
||||||||
Total available-for-sale securities
|
$
|
24,998
|
|
|
$
|
1,176
|
|
|
$
|
(528
|
)
|
|
$
|
25,646
|
|
|
$
|
25,636
|
|
|
$
|
1,653
|
|
|
$
|
(504
|
)
|
|
$
|
26,785
|
|
(1)
|
Gross unrealized loss is related to one security that was in a loss position for greater than 12 months as of March 31, 2018 and December 31, 2017.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Interest income
|
$
|
1,509
|
|
|
$
|
602
|
|
Interest expense
|
(5,493
|
)
|
|
(5,319
|
)
|
||
Gains (losses), net on changes in fair value of investments
|
(5,033
|
)
|
|
303
|
|
||
Foreign currency gains (losses), net
|
1,398
|
|
|
51
|
|
||
Impairment of investment
|
(855
|
)
|
|
—
|
|
||
Other
|
(41
|
)
|
|
(239
|
)
|
||
Other income (expense), net
|
$
|
(8,515
|
)
|
|
$
|
(4,602
|
)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Merchandise inventories
|
$
|
24,771
|
|
|
$
|
25,528
|
|
Prepaid expenses
|
34,668
|
|
|
40,399
|
|
||
Income taxes receivable
|
9,918
|
|
|
10,299
|
|
||
Other
|
19,925
|
|
|
17,799
|
|
||
Total prepaid expenses and other current assets
|
$
|
89,282
|
|
|
$
|
94,025
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Accrued merchant payables
|
$
|
395,085
|
|
|
$
|
459,662
|
|
Accrued supplier payables
(1)
|
173,485
|
|
|
310,673
|
|
||
Total accrued merchant and supplier payables
|
$
|
568,570
|
|
|
$
|
770,335
|
|
(1)
|
Amounts include payables to suppliers of inventories and providers of shipping and fulfillment services.
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Refunds reserve
|
$
|
29,434
|
|
|
$
|
31,275
|
|
Compensation and benefits
|
47,255
|
|
|
73,096
|
|
||
Customer credits
|
18,761
|
|
|
28,487
|
|
||
Income taxes payable
|
12,239
|
|
|
9,645
|
|
||
Deferred revenue
|
22,185
|
|
|
29,539
|
|
||
Current portion of capital lease obligations
|
22,023
|
|
|
25,958
|
|
||
Other
|
114,023
|
|
|
133,196
|
|
||
Total accrued expenses and other current liabilities
|
$
|
265,920
|
|
|
$
|
331,196
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Contingent income tax liabilities
|
$
|
45,469
|
|
|
$
|
43,699
|
|
Capital lease obligations
|
15,448
|
|
|
18,500
|
|
||
Deferred income taxes
|
880
|
|
|
811
|
|
||
Other
|
40,250
|
|
|
39,398
|
|
||
Total other non-current liabilities
|
$
|
102,047
|
|
|
$
|
102,408
|
|
|
Foreign currency translation adjustments
|
|
Unrealized gain (loss) on available-for-sale securities
|
|
Total
|
||||||
Balance as of December 31, 2017
|
$
|
30,962
|
|
|
$
|
882
|
|
|
$
|
31,844
|
|
Reclassification for impact of U.S. tax rate change
|
—
|
|
|
161
|
|
|
161
|
|
|||
Other comprehensive income (loss)
|
(1,568
|
)
|
|
(501
|
)
|
|
(2,069
|
)
|
|||
Balance as of March 31, 2018
|
$
|
29,394
|
|
|
$
|
542
|
|
|
$
|
29,936
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Liability component:
|
|
|
|
||||
Principal amount
|
$
|
250,000
|
|
|
$
|
250,000
|
|
Less: debt discount
|
(57,381
|
)
|
|
(60,247
|
)
|
||
Net carrying amount of liability component
|
$
|
192,619
|
|
|
$
|
189,753
|
|
|
|
|
|
||||
Net carrying amount of equity component
|
$
|
67,014
|
|
|
$
|
67,014
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Contractual interest expense (3.25% of the principal amount per annum)
|
$
|
2,032
|
|
|
$
|
2,032
|
|
Amortization of debt discount
|
2,866
|
|
|
2,587
|
|
||
Total interest expense
|
$
|
4,898
|
|
|
$
|
4,619
|
|
2018
|
$
|
1,500
|
|
2019
|
3,400
|
|
|
2020
|
3,400
|
|
|
2021
|
3,400
|
|
|
2022
|
3,400
|
|
|
Total
|
$
|
15,100
|
|
2018
|
$
|
2,461
|
|
2019
|
2,749
|
|
|
2020
|
2,749
|
|
|
2021
|
2,749
|
|
|
2022
|
2,749
|
|
|
Thereafter
|
6,187
|
|
|
Total minimum lease payments
|
$
|
19,644
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Cost of revenue
|
$
|
396
|
|
|
$
|
663
|
|
Marketing
|
1,794
|
|
|
1,802
|
|
||
Selling, general and administrative
|
17,088
|
|
|
17,185
|
|
||
Other income (expense)
|
48
|
|
|
51
|
|
||
Total stock-based compensation expense
|
$
|
19,326
|
|
|
$
|
19,701
|
|
|
Restricted Stock Units
|
|
Weighted-Average Grant Date Fair Value (per unit)
|
|||
Unvested at December 31, 2017
|
28,939,110
|
|
|
$
|
4.32
|
|
Granted
|
2,610,912
|
|
|
5.24
|
|
|
Vested
|
(3,878,827
|
)
|
|
4.53
|
|
|
Forfeited
|
(1,608,149
|
)
|
|
4.02
|
|
|
Unvested at March 31, 2018
|
26,063,046
|
|
|
4.40
|
|
|
Options
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term (in years)
|
|
Aggregate Intrinsic Value (in thousands)
(1)
|
|||||
Outstanding and exercisable at December 31, 2017
|
885,580
|
|
|
$
|
0.62
|
|
|
1.76
|
|
$
|
3,967
|
|
Exercised
|
(2,400
|
)
|
|
2.36
|
|
|
|
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding and exercisable at March 31, 2018
|
883,180
|
|
|
0.61
|
|
|
1.51
|
|
$
|
3,294
|
|
(1)
|
The aggregate intrinsic value of options outstanding and exercisable represents the total pretax intrinsic value (the difference between the fair value of the Company's stock on the last day of each period and the exercise price, multiplied by the number of options where the fair value exceeds the exercise price) that would have been received by the option holders had all option holders exercised their options as of
March 31, 2018
and
December 31, 2017
, respectively.
|
•
|
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 the Company's online marketplaces until the customer redeems the related voucher. If the customer does not redeem a voucher with such merchant payment terms, the Company retains all of the gross billings for that voucher, rather than retaining only its net commission. Prior to its adoption of Topic 606, the Company recognized that variable consideration from unredeemed vouchers and derecognized the related accrued merchant payables when its legal obligation to the merchant expired, which the Company believes is shortly after the voucher expiration date in most jurisdictions. Following its adoption of Topic 606, the Company estimates the variable consideration from vouchers that will not ultimately be redeemed and recognizes that amount as revenue at the time of sale, rather than when the Company's legal obligation expires. The Company estimates variable consideration from unredeemed vouchers using its historical voucher redemption experience. Most vouchers sold through the Company's marketplace in the United States do not have
|
•
|
Prior to its adoption of Topic 606, the Company expensed the incremental costs to obtain contracts with third-party merchants, such as sales commissions, as incurred. Following its adoption of Topic 606, those costs are deferred and recognized over the expected period of the merchant arrangement, generally from 12 to 18 months.
|
•
|
Prior to its adoption of Topic 606, the Company recognized breakage income for unused customer credits when they expired or were forfeited. Following its adoption of Topic 606, breakage income from customer credits that are not expected to be used is estimated and recognized as revenue in proportion to the pattern of redemption for customer credits that are used.
|
•
|
Prior to its adoption of Topic 606, the Company deferred the revenue from hotel reservation offerings until the customer's stay commenced. Following its adoption of Topic 606, revenue from hotel reservation offerings is recognized at the time the reservation is made, net of an allowance for estimated cancellations.
|
•
|
Prior to its adoption of Topic 606, the Company classified refunds on service revenue transactions for which the merchant's share of the refund amount is not recoverable as a cost of revenue. Following its adoption of Topic 606, those refunds are classified as a reduction of revenue.
|
•
|
Prior to its adoption of Topic 606, the Company classified credits issued to consumers for relationship purposes as a marketing expense. Following its adoption of Topic 606, those credits are classified as a reduction of revenue.
|
Account
|
|
Increase (decrease) to beginning accumulated deficit
|
||
Prepaid expenses and other current assets
|
|
$
|
(4,007
|
)
|
Other non-current assets
|
|
(10,223
|
)
|
|
Accrued merchant and supplier payables
|
|
(64,970
|
)
|
|
Accrued expenses and other current liabilities
|
|
(13,188
|
)
|
|
Other non-current liabilities
|
|
3,443
|
|
|
Effect on beginning accumulated deficit
|
|
$
|
(88,945
|
)
|
|
March 31, 2018
|
||||||||||
|
As reported
|
|
Adjustments
|
|
Balances without adoption of Topic 606
|
||||||
Total assets
|
$
|
1,502,928
|
|
|
$
|
(13,082
|
)
|
|
$
|
1,489,846
|
|
Total liabilities
|
1,152,556
|
|
|
84,185
|
|
|
1,236,741
|
|
|||
Total Groupon, Inc. stockholders' equity
|
350,372
|
|
|
(97,267
|
)
|
|
253,105
|
|
|
Three Months Ended March 31, 2018
|
||||||||||
|
As reported
|
|
Adjustments
|
|
Balances without adoption of Topic 606
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Service revenue
(1)
|
$
|
301,797
|
|
|
$
|
(1,779
|
)
|
|
$
|
300,018
|
|
Product revenue
|
324,743
|
|
|
—
|
|
|
324,743
|
|
|||
Total revenue
|
626,540
|
|
|
(1,779
|
)
|
|
624,761
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Service cost of revenue
(2)
|
31,145
|
|
|
6,275
|
|
|
37,420
|
|
|||
Product cost of revenue
|
270,510
|
|
|
—
|
|
|
270,510
|
|
|||
Cost of revenue
(2)
|
301,655
|
|
|
6,275
|
|
|
307,930
|
|
|||
Gross profit
|
324,885
|
|
|
(8,054
|
)
|
|
316,831
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Marketing
(3)
|
99,156
|
|
|
1,573
|
|
|
100,729
|
|
|||
Selling, general and administrative
(4)
|
222,061
|
|
|
(1,264
|
)
|
|
220,797
|
|
|||
Restructuring charges
|
283
|
|
|
—
|
|
|
283
|
|
|||
Total operating expenses
|
321,500
|
|
|
309
|
|
|
321,809
|
|
|||
Income (loss) from operations
|
3,385
|
|
|
(8,363
|
)
|
|
(4,978
|
)
|
|||
Other income (expense), net
|
(8,515
|
)
|
|
—
|
|
|
(8,515
|
)
|
|||
Income (loss) before provision (benefit) for income taxes
|
(5,130
|
)
|
|
(8,363
|
)
|
|
(13,493
|
)
|
|||
Provision (benefit) for income taxes
(5)
|
(2,335
|
)
|
|
(1,019
|
)
|
|
(3,354
|
)
|
|||
Net income (loss)
|
$
|
(2,795
|
)
|
|
$
|
(7,344
|
)
|
|
$
|
(10,139
|
)
|
(1)
|
Reflects decreases of
$5.6 million
related to the timing of recognition of variable consideration from unredeemed vouchers,
$3.3 million
related to the timing of recognition of revenue from hotel reservation offerings and
$0.7 million
related to the timing of recognition of breakage revenue from customer credits that are not expected to be used, partially offset by a
$7.8 million
increase for refunds on service revenue transactions for which the merchant's share is not recoverable and customer credits issued for relationship purposes, which are classified as reductions of revenue under Topic 606.
|
(2)
|
Reflects an increase for refunds on service revenue transactions for which the merchant's share is not recoverable, which are classified as a reduction of revenue under Topic 606.
|
(3)
|
Reflects an increase for customer credits issued for relationship purposes, which are classified as a reduction of revenue under Topic 606.
|
(4)
|
Reflects the amortization of deferred contract acquisition costs in excess of amounts capitalized in the current period.
|
(5)
|
As discussed in Note 12,
Income Taxes
, for the
three months ended March 31, 2018
, the Company recognized a
$6.4 million
income tax benefit resulting from the impact of adopting Topic 606 on intercompany activity in certain foreign jurisdictions. That income tax benefit is not reflected in this table, which presents the direct impacts of adopting Topic 606.
|
|
Three Months Ended March 31, 2018
|
||||||||||
|
As reported
|
|
Adjustments
|
|
Balances without adoption of Topic 606
|
||||||
North America
|
|
|
|
|
|
||||||
Service revenue:
|
|
|
|
|
|
||||||
Local
|
$
|
187,411
|
|
|
$
|
3,613
|
|
|
$
|
191,024
|
|
Goods
|
4,874
|
|
|
—
|
|
|
4,874
|
|
|||
Travel
|
20,084
|
|
|
(3,080
|
)
|
|
17,004
|
|
|||
Product revenue - Goods
|
180,887
|
|
|
—
|
|
|
180,887
|
|
|||
Total North America revenue
|
393,256
|
|
|
533
|
|
|
393,789
|
|
|||
|
|
|
|
|
|
||||||
International
|
|
|
|
|
|
||||||
Service revenue:
|
|
|
|
|
|
||||||
Local
|
74,578
|
|
|
(1,445
|
)
|
|
73,133
|
|
|||
Goods
|
3,414
|
|
|
(239
|
)
|
|
3,175
|
|
|||
Travel
|
11,436
|
|
|
(628
|
)
|
|
10,808
|
|
|||
Product revenue - Goods
|
143,856
|
|
|
—
|
|
|
143,856
|
|
|||
Total International revenue
|
233,284
|
|
|
(2,312
|
)
|
|
230,972
|
|
|||
|
|
|
|
|
|
||||||
Consolidated
|
|
|
|
|
|
||||||
Service revenue:
|
|
|
|
|
|
||||||
Local
|
261,989
|
|
|
2,168
|
|
|
264,157
|
|
|||
Goods
|
8,288
|
|
|
(239
|
)
|
|
8,049
|
|
|||
Travel
|
31,520
|
|
|
(3,708
|
)
|
|
27,812
|
|
|||
Product revenue - Goods
|
324,743
|
|
|
—
|
|
|
324,743
|
|
|||
Total Consolidated Revenue
|
$
|
626,540
|
|
|
$
|
(1,779
|
)
|
|
$
|
624,761
|
|
|
Deferred Revenue
|
||
Balance as of January 1, 2018
|
$
|
25,763
|
|
Revenue deferred
|
22,185
|
|
|
Revenue recognized
|
(25,935
|
)
|
|
Foreign currency translation
|
172
|
|
|
Balance as of March 31, 2018
|
$
|
22,185
|
|
|
Customer Credits
|
||
Balance as of January 1, 2018
|
$
|
19,414
|
|
Credits issued
|
32,386
|
|
|
Credits redeemed
(1)
|
(28,167
|
)
|
|
Breakage revenue recognized
|
(5,036
|
)
|
|
Foreign currency translation
|
164
|
|
|
Balance as of March 31, 2018
|
$
|
18,761
|
|
(1)
|
Customer credits can be redeemed through the Company's online marketplaces for goods or services provided by a third-party merchant or for merchandise inventory sold by the Company. When customer credits are redeemed for goods or services provided by a third-party merchant, service 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. When customer credits are redeemed for merchandise inventory sold by the Company, product revenue is recognized on a gross basis equal to the amount of the customer credit liability derecognized. Customer credits are primarily used within one year of issuance.
|
|
Three Months Ended March 31, 2018
|
||||||||||
|
Employee Severance and Benefit Costs
(1)
|
|
Other Exit Costs
(1)
|
|
Total Restructuring Charges
|
||||||
North America
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
International
|
230
|
|
|
53
|
|
|
283
|
|
|||
Consolidated
|
$
|
230
|
|
|
$
|
53
|
|
|
$
|
283
|
|
|
Three Months Ended March 31, 2017
|
||||||||||
|
Employee Severance and Benefit Costs
(2)
|
|
Other Exit Costs
|
|
Total Restructuring Charges
|
||||||
North America
|
$
|
1,778
|
|
|
$
|
177
|
|
|
$
|
1,955
|
|
International
|
523
|
|
|
253
|
|
|
776
|
|
|||
Consolidated
|
$
|
2,301
|
|
|
$
|
430
|
|
|
$
|
2,731
|
|
(1)
|
The
$0.3 million
of restructuring charges during
three months ended March 31, 2018
reflects changes in estimates related to prior actions.
|
(2)
|
The employee severance and benefit costs for the three months ended March 31, 2017 related to the termination of approximately
200
employees.
|
|
Employee Severance and Benefit Costs
|
|
Other Exit Costs
|
|
Total
|
||||||
Balance as of December 31, 2017
|
$
|
3,817
|
|
|
$
|
304
|
|
|
$
|
4,121
|
|
Charges payable in cash
|
230
|
|
|
53
|
|
|
283
|
|
|||
Cash payments
|
(720
|
)
|
|
(53
|
)
|
|
(773
|
)
|
|||
Foreign currency translation
|
71
|
|
|
—
|
|
|
71
|
|
|||
Balance as of March 31, 2018
|
$
|
3,398
|
|
|
$
|
304
|
|
|
$
|
3,702
|
|
|
|
|
Fair Value Measurement at Reporting Date Using
|
||||||||||||
|
March 31, 2018
|
|
Quoted Prices in Active Markets for
Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Cash equivalents
|
$
|
93,325
|
|
|
$
|
93,325
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fair value option investments
|
77,933
|
|
|
—
|
|
|
—
|
|
|
77,933
|
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
Convertible debt securities
|
11,070
|
|
|
—
|
|
|
—
|
|
|
11,070
|
|
||||
Redeemable preferred shares
|
14,576
|
|
|
—
|
|
|
—
|
|
|
14,576
|
|
|
|
|
Fair Value Measurement at Reporting Date Using
|
||||||||||||
|
December 31, 2017
|
|
Quoted Prices in Active Markets for
Identical Assets (Level 1) |
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
||||||||
Cash equivalents
|
$
|
137,975
|
|
|
$
|
137,975
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fair value option investments
|
82,966
|
|
|
—
|
|
|
—
|
|
|
82,966
|
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
Convertible debt securities
|
11,354
|
|
|
—
|
|
|
—
|
|
|
11,354
|
|
||||
Redeemable preferred shares
|
15,431
|
|
|
—
|
|
|
—
|
|
|
15,431
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
||||
Fair value option investments:
|
|
|
|
||||
Beginning Balance
|
$
|
82,966
|
|
|
$
|
82,584
|
|
Total gains (losses) included in earnings
|
(5,033
|
)
|
|
303
|
|
||
Ending Balance
|
$
|
77,933
|
|
|
$
|
82,887
|
|
Unrealized gains (losses) still held
(1)
|
$
|
(5,033
|
)
|
|
$
|
303
|
|
Available-for-sale securities
|
|
|
|
||||
Convertible debt securities:
|
|
|
|
||||
Beginning Balance
|
$
|
11,354
|
|
|
$
|
10,038
|
|
Acquisition of convertible debt security
|
—
|
|
|
1,612
|
|
||
Total gains (losses) included in other comprehensive income (loss)
|
(501
|
)
|
|
42
|
|
||
Total gains (losses) included in earnings
(2)
|
217
|
|
|
239
|
|
||
Ending Balance
|
$
|
11,070
|
|
|
$
|
11,931
|
|
Unrealized gains (losses) still held
(1)
|
$
|
(284
|
)
|
|
$
|
281
|
|
Redeemable preferred shares:
|
|
|
|
||||
Beginning Balance
|
$
|
15,431
|
|
|
$
|
17,444
|
|
Total gains (losses) included in other comprehensive income (loss)
|
—
|
|
|
344
|
|
||
Impairment included in earnings
|
(855
|
)
|
|
—
|
|
||
Ending Balance
|
$
|
14,576
|
|
|
$
|
17,788
|
|
Unrealized (losses) gains still held
(1)
|
$
|
(855
|
)
|
|
$
|
344
|
|
|
|
|
|
|
|||
Liabilities
|
|
|
|
||||
Contingent Consideration:
|
|
|
|
||||
Beginning Balance
|
$
|
—
|
|
|
$
|
14,588
|
|
Total losses (gains) included in earnings
(3)
|
—
|
|
|
12
|
|
||
Ending Balance
|
$
|
—
|
|
|
$
|
14,600
|
|
Unrealized losses (gains) still held
(1)
|
$
|
—
|
|
|
$
|
12
|
|
(1)
|
Represents the unrealized losses or gains recorded in earnings and/or other comprehensive income (loss) during the period for assets and liabilities classified as Level 3 that are still held (or outstanding) at the end of the period.
|
(2)
|
Represents accretion of interest income and changes in the fair value of an embedded derivative.
|
(3)
|
Changes in the fair value of contingent consideration liabilities are classified within Selling, general and administrative expense on the consolidated statements of operations.
|
|
December 31, 2017
|
||||||
|
Carrying Amount
|
|
Fair Value
|
||||
Cost method investments
(1)
|
$
|
25,438
|
|
|
$
|
32,792
|
|
(1)
|
See Note
2
,
Adoption of New Accounting Standards
, and Note
5
,
Investments
, for information about the Company's adoption of ASU 2016-01 on January 1, 2018 and its impact on accounting for equity investments without readily determinable fair values that were previously subject to the cost method of accounting.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Basic and diluted net income (loss) per share:
|
|
|
|
||||
Numerator
|
|
|
|
||||
Net income (loss) - continuing operations
|
$
|
(2,795
|
)
|
|
$
|
(20,869
|
)
|
Less: Net income (loss) attributable to noncontrolling interests
|
4,093
|
|
|
4,032
|
|
||
Net income (loss) attributable to common stockholders - continuing operations
|
(6,888
|
)
|
|
(24,901
|
)
|
||
Net income (loss) attributable to common stockholders - discontinued operations
|
—
|
|
|
487
|
|
||
Net income (loss) attributable to common stockholders
|
$
|
(6,888
|
)
|
|
$
|
(24,414
|
)
|
Denominator
|
|
|
|
||||
Weighted-average common shares outstanding
|
561,735,937
|
|
|
562,195,243
|
|
||
|
|
|
|
||||
Basic and diluted net income (loss) per share
(1)
:
|
|
|
|
||||
Continuing operations
|
$
|
(0.01
|
)
|
|
$
|
(0.04
|
)
|
Discontinued operations
|
0.00
|
|
|
0.00
|
|
||
Basic and diluted net income (loss) per share
|
$
|
(0.01
|
)
|
|
$
|
(0.04
|
)
|
(1)
|
The potentially dilutive impacts of outstanding equity awards, warrants and convertible senior notes have been excluded from the calculation of dilutive net income (loss) per share for the
three months ended March 31, 2018
and
2017
as their effect on net income (loss) per share from
|
|
Three Months Ended March 31,
|
||||
|
2018
|
|
2017
|
||
Restricted stock units
|
28,033,489
|
|
|
24,360,648
|
|
Other stock-based compensation awards
|
3,212,026
|
|
|
3,813,848
|
|
Convertible senior notes
|
46,296,300
|
|
|
46,296,300
|
|
Warrants
|
46,296,300
|
|
|
46,296,300
|
|
Total
|
123,838,115
|
|
|
120,767,096
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
North America
|
|
|
|
||||
Service revenue:
|
|
|
|
||||
Local
|
$
|
187,411
|
|
|
$
|
200,545
|
|
Goods
|
4,874
|
|
|
1,704
|
|
||
Travel
|
20,084
|
|
|
20,462
|
|
||
Product revenue - Goods
|
180,887
|
|
|
250,646
|
|
||
Total North America revenue
(1)
|
393,256
|
|
|
473,357
|
|
||
|
|
|
|
||||
International
|
|
|
|
||||
Service revenue:
|
|
|
|
||||
Local
|
74,578
|
|
|
63,575
|
|
||
Goods
|
3,414
|
|
|
4,289
|
|
||
Travel
|
11,436
|
|
|
11,002
|
|
||
Product revenue - Goods
|
143,856
|
|
|
121,403
|
|
||
Total International revenue
(1)
|
$
|
233,284
|
|
|
$
|
200,269
|
|
(1)
|
North America includes revenue from the United States of
$385.4 million
and
$464.7 million
for the
three months ended March 31, 2018
and
2017
, respectively. International includes revenue from the United Kingdom of
$83.0 million
and
$65.5 million
for the
three months ended March 31, 2018
and
2017
, respectively. There were no other individual countries that represented more than 10% of consolidated total revenue for the
three months ended March 31, 2018
and
2017
. Prior to the second quarter of 2017, revenue was attributed to individual countries based on the domicile of the legal entities within the Company's consolidated group that undertook those transactions. Beginning in the second quarter of 2017, the Company updated its attribution of revenue by country in the current period to be based on the location of the customer. Revenue amounts by country for the
three months ended March 31, 2017
have been retrospectively adjusted to reflect that change in attribution.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
North America
|
|
|
|
||||
Service gross profit:
|
|
|
|
||||
Local
|
$
|
166,756
|
|
|
$
|
169,342
|
|
Goods
|
3,941
|
|
|
1,307
|
|
||
Travel
|
16,002
|
|
|
15,165
|
|
||
Product gross profit - Goods
|
32,981
|
|
|
35,123
|
|
||
Total North America gross profit
|
219,680
|
|
|
220,937
|
|
||
|
|
|
|
||||
International
|
|
|
|
||||
Service gross profit:
|
|
|
|
||||
Local
|
70,215
|
|
|
59,194
|
|
||
Goods
|
3,087
|
|
|
3,660
|
|
||
Travel
|
10,651
|
|
|
10,036
|
|
||
Product gross profit - Goods
|
21,252
|
|
|
15,624
|
|
||
Total International gross profit
|
$
|
105,205
|
|
|
$
|
88,514
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Operating income (loss)
(1) (2)
:
|
|
|
|
||||
North America
|
$
|
(1,860
|
)
|
|
$
|
(14,783
|
)
|
International
|
5,245
|
|
|
3,103
|
|
||
Total operating income (loss)
|
$
|
3,385
|
|
|
$
|
(11,680
|
)
|
(1)
|
Includes stock-based compensation of
$17.9 million
and
$18.3 million
for North America for the
three months ended March 31, 2018
and
2017
, respectively, and
$1.4 million
for International for the
three months ended March 31, 2018
and
2017
.
|
(2)
|
Includes restructuring charges of
$2.0 million
for North America for the three months ended March 31, 2017 and
$0.3 million
and
$0.8 million
for International for the
three months ended March 31, 2018
and
2017
, respectively.
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Total assets:
|
|
|
|
||||
North America
(1)
|
$
|
920,834
|
|
|
$
|
1,045,072
|
|
International
(1)
|
582,094
|
|
|
632,433
|
|
||
Consolidated total assets
|
$
|
1,502,928
|
|
|
$
|
1,677,505
|
|
(1)
|
North America contains assets from the United States of
$877.8 million
and
$1,006.2 million
as of
March 31, 2018
and
December 31, 2017
, respectively. International contains assets from Ireland of
$167.1 million
and
$219.7 million
as of
March 31, 2018
and
December 31, 2017
, respectively. There were no other individual countries that represented more than
10%
of consolidated total assets as of
March 31, 2018
and
December 31, 2017
.
|
•
|
Revenue
. Product revenue is earned from direct sales of merchandise inventory through our Goods category and is reported on a gross basis as the purchase price received from the customer. Service revenue is earned from transactions in which we earn commissions by selling goods or services on behalf of third-party merchants, primarily through sales of vouchers and similar transactions in which we collect the transaction price from the customer and remit a portion of that transaction price to the third-party merchant who will provide the related goods or services. Service revenue from those transactions is reported on a net basis as the purchase price collected from the customer less the portion of the purchase price that is payable to the third-party merchant. Service revenue also includes commissions we earn when customers make purchases with retailers using digital coupons accessed through our websites and mobile applications and from voucherless merchant offerings in which customers earn cash back on their credit card statements when they transact with third-party merchants.
|
•
|
Gross profit
. Gross profit reflects the net margin earned after deducting our cost of revenue from our revenue. Due to the lack of comparability between product revenue, which is reported on a gross basis, and service revenue, which primarily consists of transactions reported on a net basis, we believe that gross profit is an important measure for evaluating our performance.
|
•
|
Adjusted EBITDA
. 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, acquisition-related expense (benefit), net 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 Non-GAAP Financial Measures in the
Results of Operations
section.
|
•
|
Free cash flow
. Free cash flow is a non-GAAP financial measure that comprises net cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software from continuing operations. For further information and a reconciliation to Net cash provided by (used in) operating activities from continuing operations, refer to our discussion in the
Liquidity and Capital Resources
section.
|
(1)
|
Prior period free cash flow information has been updated from negative
$150.3 million
previously reported to reflect the adoption of ASU 2016-18
,
Statement of Cash Flows (Topic 230) - Restricted Cash
,
on January 1, 2018. See Note 2,
Adoption of New Accounting Standards
, for additional information on the adoption of ASU 2016-18.
|
•
|
Gross Billings
. This metric represents the total dollar value of customer purchases of goods and services. For sales of vouchers and similar transactions in which we collect the transaction price from the customer and remit a portion of the transaction price to the third-party merchant who will provide the related goods or services, which comprise a substantial majority of our service revenue transactions, gross billings differs from revenue reported in our condensed consolidated statements of operations, which is presented net of the merchant's share of the transaction price. For product revenue transactions, gross billings are equivalent to product revenue reported in our condensed consolidated statements of operations. We consider this metric to be an important indicator of our growth and business performance as it measures the dollar volume of transactions generated through our marketplaces. Tracking gross billings on service revenue transactions also allows us to monitor the percentage of gross billings that we are able to retain after payments to merchants.
|
•
|
Active customers
. We define active customers as unique user accounts that have made a purchase during the trailing twelve months ("TTM") either through one of our online marketplaces or directly with a merchant for which we earned a commission. We consider this metric to be an important indicator of our business performance as it helps us to understand how the number of customers actively purchasing our offerings is trending. Some customers could establish and make purchases from more than one account, so it is possible that our active customer metric may count certain customers more than once in a given period. For entities that we have acquired in a business combination, this metric includes active customers of the acquired entity, including customers who made purchases prior to the acquisition.
|
•
|
Gross billings and gross profit per active customer
. These metrics represent the TTM gross billings and gross profit generated per active customer. We use these metrics to evaluate trends in customer spend and in the average contribution to gross billings and profit on a per-customer basis. We updated the calculation of these metrics in the current period to reflect active customers as of the end of the period, rather than the average of active customers as of the beginning and end of period, in the denominator of the calculations. Because our active customer metrics are based on purchases over a TTM period, we believe that this change improves the usefulness of these metrics. The prior period metrics presented below have been updated to reflect this change.
|
•
|
Units
. This metric represents the number of purchases during the reporting period, before refunds and cancellations, made either through one of our online marketplaces or directly with a merchant for which we earned a commission. We consider unit growth to be an important indicator of the total volume of business conducted through our marketplaces.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Gross billings
|
$
|
1,293,264
|
|
|
$
|
1,357,976
|
|
|
Trailing Twelve Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
TTM Active customers (in thousands)
|
49,680
|
|
|
48,335
|
|
||
TTM Gross billings per active customer
(1)
|
$
|
112.34
|
|
|
$
|
117.43
|
|
TTM Gross profit per active customer
(1)
|
$
|
27.16
|
|
|
$
|
26.27
|
|
(1)
|
TTM Gross billings per active customer have been updated from
$122.68
previously reported and TTM Gross profit per active customer has been updated from
$27.45
previously reported for the
three months ended March 31, 2017
due to the change in the calculation discussed above.
|
|
Three Months Ended March 31,
|
||||
|
2018
|
|
2017
|
||
Units
|
42,424
|
|
|
45,731
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Gross billings:
|
|
|
|
|
|
|
|
|||||||
Service
|
$
|
968,521
|
|
|
$
|
985,922
|
|
|
$
|
(17,401
|
)
|
|
(1.8
|
)%
|
Product
|
324,743
|
|
|
372,054
|
|
|
(47,311
|
)
|
|
(12.7
|
)
|
|||
Total gross billings
|
$
|
1,293,264
|
|
|
$
|
1,357,976
|
|
|
$
|
(64,712
|
)
|
|
(4.8
|
)
|
|
Three Months Ended March 31, 2018
|
||||||||||
|
At Avg. Q1 2017 Rates
(1)
|
|
Exchange Rate Effect
(2)
|
|
As Reported
|
||||||
Gross billings
|
$
|
1,241,220
|
|
|
$
|
52,044
|
|
|
$
|
1,293,264
|
|
(1)
|
Represents the financial statement balances that would have resulted had exchange rates in the reporting period been the same as those in effect in the prior year period.
|
(2)
|
Represents the increase or decrease in the reported amount resulting from changes in exchange rates from those in effect in the prior year period.
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
North America
|
|
|
|
|
|
|
|
|||||||
Service gross billings:
|
|
|
|
|
|
|
|
|||||||
Local
|
$
|
543,021
|
|
|
$
|
587,766
|
|
|
$
|
(44,745
|
)
|
|
(7.6
|
)%
|
Goods
|
28,589
|
|
|
11,942
|
|
|
16,647
|
|
|
139.4
|
|
|||
Travel
|
102,499
|
|
|
114,163
|
|
|
(11,664
|
)
|
|
(10.2
|
)
|
|||
Product gross billings - Goods
|
180,887
|
|
|
250,646
|
|
|
(69,759
|
)
|
|
(27.8
|
)
|
|||
Total North America gross billings
|
854,996
|
|
|
964,517
|
|
|
(109,521
|
)
|
|
(11.4
|
)
|
|||
|
|
|
|
|
|
|
|
|||||||
International
|
|
|
|
|
|
|
|
|||||||
Service gross billings:
|
|
|
|
|
|
|
|
|||||||
Local
|
217,307
|
|
|
191,219
|
|
|
26,088
|
|
|
13.6
|
|
|||
Goods
|
19,583
|
|
|
27,671
|
|
|
(8,088
|
)
|
|
(29.2
|
)
|
|||
Travel
|
57,522
|
|
|
53,161
|
|
|
4,361
|
|
|
8.2
|
|
|||
Product gross billings - Goods
|
143,856
|
|
|
121,408
|
|
|
22,448
|
|
|
18.5
|
|
|||
Total International gross billings
|
438,268
|
|
|
393,459
|
|
|
44,809
|
|
|
11.4
|
|
|||
Total gross billings
|
$
|
1,293,264
|
|
|
$
|
1,357,976
|
|
|
$
|
(64,712
|
)
|
|
(4.8
|
)
|
Q1 2018
|
|
Q1 2017
|
|
North America
|
|
|
International
|
|
•
|
A decrease in gross billings from our Goods category, which resulted from our ongoing efforts to de-emphasize lower margin product offerings in connection with our strategic initiative to optimize for gross profit generation;
|
•
|
We ceased most of our food delivery operations in the third quarter of 2017, which resulted in a
$17.4 million
decrease in Local gross billings as compared to the prior year period; and
|
•
|
We continued to shift customer impressions from traditional voucher offerings with food and drink merchants toward Groupon+ voucherless offerings as we seek to scale that product. While we believe that voucherless offerings have the potential to ultimately drive long-term gross profit growth, the shift away from traditional food and drink vouchers is adversely impacting our gross billings in the near term.
|
|
Three Months Ended March 31, 2018
|
||||||||||
|
At Avg. Q1 2017 Rates
(1)
|
|
Exchange Rate Effect
(2)
|
|
As Reported
|
||||||
Revenue
|
$
|
597,251
|
|
|
$
|
29,289
|
|
|
$
|
626,540
|
|
(1)
|
Represents the financial statement balances that would have resulted had exchange rates in the reporting period been the same as those in effect in the prior year period.
|
(2)
|
Represents the increase or decrease in the reported amount resulting from changes in exchange rates from those in effect in the prior year period.
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
North America
|
|
|
|
|
|
|
|
|||||||
Service revenue:
|
|
|
|
|
|
|
|
|||||||
Local
|
$
|
187,411
|
|
|
$
|
200,545
|
|
|
$
|
(13,134
|
)
|
|
(6.5
|
)%
|
Goods
|
4,874
|
|
|
1,704
|
|
|
3,170
|
|
|
186.0
|
|
|||
Travel
|
20,084
|
|
|
20,462
|
|
|
(378
|
)
|
|
(1.8
|
)
|
|||
Product revenue - Goods
|
180,887
|
|
|
250,646
|
|
|
(69,759
|
)
|
|
(27.8
|
)
|
|||
Total North America revenue
|
393,256
|
|
|
473,357
|
|
|
(80,101
|
)
|
|
(16.9
|
)
|
|||
|
|
|
|
|
|
|
|
|||||||
International
|
|
|
|
|
|
|
|
|||||||
Service revenue:
|
|
|
|
|
|
|
|
|||||||
Local
|
74,578
|
|
|
63,575
|
|
|
11,003
|
|
|
17.3
|
|
|||
Goods
|
3,414
|
|
|
4,289
|
|
|
(875
|
)
|
|
(20.4
|
)
|
|||
Travel
|
11,436
|
|
|
11,002
|
|
|
434
|
|
|
3.9
|
|
|||
Product revenue - Goods
|
143,856
|
|
|
121,403
|
|
|
22,453
|
|
|
18.5
|
|
|||
Total International revenue
|
233,284
|
|
|
200,269
|
|
|
33,015
|
|
|
16.5
|
|
|||
Total revenue
|
$
|
626,540
|
|
|
$
|
673,626
|
|
|
(47,086
|
)
|
|
(7.0
|
)
|
Q1 2018
|
|
Q1 2017
|
|
North America
|
|
|
International
|
|
North America
|
|
International
|
•
|
decreases in Goods and Local gross billings, as discussed above; and
|
•
|
an increase in the proportion of service revenue transactions in our Goods category, which are reported on a net basis, with a corresponding decrease in in the proportion of product revenue transactions, which are reported on a gross basis.
|
•
|
a
$29.2 million
favorable impact on international revenue from year-over-year changes in foreign exchange rates for the
three months ended
March 31, 2018
;
|
•
|
an increase in the proportion of service revenue transactions in our Goods category, which are reported on a net basis, with a corresponding decrease in in the proportion of product revenue transactions, which are reported on a gross basis; and
|
•
|
an increase in the percentage of gross billings that we retained after deducting the merchant’s share in service revenue transactions to
30.4%
for the
three months ended March 31, 2018
, as compared to
29.0%
in the prior year period. The percentage of gross billings that we retain after deducting the merchant's share reflects the overall results of individual deal-by-deal negotiations with merchants and can vary significantly from period-to-period.
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|||||||
Service
|
$
|
31,145
|
|
|
$
|
42,873
|
|
|
$
|
(11,728
|
)
|
|
(27.4
|
)%
|
Product
|
270,510
|
|
|
321,302
|
|
|
(50,792
|
)
|
|
(15.8
|
)
|
|||
Total cost of revenue
|
$
|
301,655
|
|
|
$
|
364,175
|
|
|
$
|
(62,520
|
)
|
|
(17.2
|
)
|
|
Three Months Ended March 31, 2018
|
||||||||||
|
At Avg. Q1 2017 Rates
(1)
|
|
Exchange Rate Effect
(2)
|
|
As Reported
|
||||||
Cost of revenue
|
$
|
284,785
|
|
|
$
|
16,870
|
|
|
$
|
301,655
|
|
(1)
|
Represents the financial statement balances that would have resulted had exchange rates in the reporting period been the same as those in effect in the prior year period.
|
(2)
|
Represents the increase or decrease in the reported amount resulting from changes in exchange rates from those in effect in the prior year period.
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
North America
|
|
|
|
|
|
|
|
|||||||
Service cost of revenue:
|
|
|
|
|
|
|
|
|||||||
Local
|
$
|
20,655
|
|
|
$
|
31,203
|
|
|
$
|
(10,548
|
)
|
|
(33.8
|
)%
|
Goods
|
933
|
|
|
397
|
|
|
536
|
|
|
135.0
|
|
|||
Travel
|
4,082
|
|
|
5,297
|
|
|
(1,215
|
)
|
|
(22.9
|
)
|
|||
Product cost of revenue - Goods
|
147,906
|
|
|
215,523
|
|
|
(67,617
|
)
|
|
(31.4
|
)
|
|||
Total North America cost of revenue
|
173,576
|
|
|
252,420
|
|
|
(78,844
|
)
|
|
(31.2
|
)
|
|||
|
|
|
|
|
|
|
|
|||||||
International
|
|
|
|
|
|
|
|
|||||||
Service cost of revenue:
|
|
|
|
|
|
|
|
|||||||
Local
|
4,363
|
|
|
4,381
|
|
|
(18
|
)
|
|
(0.4
|
)
|
|||
Goods
|
327
|
|
|
629
|
|
|
(302
|
)
|
|
(48.0
|
)
|
|||
Travel
|
785
|
|
|
966
|
|
|
(181
|
)
|
|
(18.7
|
)
|
|||
Product cost of revenue - Goods
|
122,604
|
|
|
105,779
|
|
|
16,825
|
|
|
15.9
|
|
|||
Total International cost of revenue
|
128,079
|
|
|
111,755
|
|
|
16,324
|
|
|
14.6
|
|
|||
Total cost of revenue
|
$
|
301,655
|
|
|
$
|
364,175
|
|
|
$
|
(62,520
|
)
|
|
(17.2
|
)
|
Q1 2018
|
|
Q1 2017
|
|
North America
|
|
|
International
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Gross profit:
|
|
|
|
|
|
|
|
|||||||
Service
|
$
|
270,652
|
|
|
$
|
258,704
|
|
|
$
|
11,948
|
|
|
4.6
|
%
|
Product
|
54,233
|
|
|
50,747
|
|
|
3,486
|
|
|
6.9
|
|
|||
Total gross profit
|
$
|
324,885
|
|
|
$
|
309,451
|
|
|
$
|
15,434
|
|
|
5.0
|
|
|
Three Months Ended March 31, 2018
|
||||||||||
|
At Avg. Q1 2017 Rates
(1)
|
|
Exchange Rate Effect
(2)
|
|
As Reported
|
||||||
Gross profit
|
$
|
312,466
|
|
|
$
|
12,419
|
|
|
$
|
324,885
|
|
(1)
|
Represents the financial statement balances that would have resulted had exchange rates in the reporting period been the same as those in effect in the prior year period.
|
(2)
|
Represents the increase or decrease in the reported amount resulting from changes in exchange rates from those in effect in the prior year period.
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
North America
|
|
|
|
|
|
|
|
|||||||
Service gross profit:
|
|
|
|
|
|
|
|
|||||||
Local
|
$
|
166,756
|
|
|
$
|
169,342
|
|
|
$
|
(2,586
|
)
|
|
(1.5
|
)%
|
Goods
|
3,941
|
|
|
1,307
|
|
|
2,634
|
|
|
201.5
|
|
|||
Travel
|
16,002
|
|
|
15,165
|
|
|
837
|
|
|
5.5
|
|
|||
Product gross profit - Goods
|
32,981
|
|
|
35,123
|
|
|
(2,142
|
)
|
|
(6.1
|
)
|
|||
Total North America gross profit
|
219,680
|
|
|
220,937
|
|
|
(1,257
|
)
|
|
(0.6
|
)
|
|||
|
|
|
|
|
|
|
|
|
||||||
International
|
|
|
|
|
|
|
|
|
||||||
Service gross profit:
|
|
|
|
|
|
|
|
|
||||||
Local
|
70,215
|
|
|
59,194
|
|
|
11,021
|
|
|
18.6
|
|
|||
Goods
|
3,087
|
|
|
3,660
|
|
|
(573
|
)
|
|
(15.7
|
)
|
|||
Travel
|
10,651
|
|
|
10,036
|
|
|
615
|
|
|
6.1
|
|
|||
Product gross profit - Goods
|
21,252
|
|
|
15,624
|
|
|
5,628
|
|
|
36.0
|
|
|||
Total International gross profit
|
105,205
|
|
|
88,514
|
|
|
16,691
|
|
|
18.9
|
|
|||
Total gross profit
|
$
|
324,885
|
|
|
$
|
309,451
|
|
|
$
|
15,434
|
|
|
5.0
|
|
Q1 2018
|
|
Q1 2017
|
|
North America
|
|
|
International
|
|
•
|
a
$12.4 million
favorable impact on International gross profit from year-over-year changes in foreign exchange rates for the
three months ended March 31, 2018
; and
|
•
|
our ongoing efforts to de-emphasize lower margin product offerings in all of our categories and to reduce our shipping and fulfillment costs on product revenue transactions.
|
|
Three Months Ended March 31,
|
|||||||||||||||||||
|
2018
|
|
% of Gross Profit
|
|
2017
|
|
% of Gross Profit
|
|
$ Change
|
|
% Change
|
|||||||||
Marketing:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
North America
|
$
|
71,451
|
|
|
32.5
|
%
|
|
$
|
63,543
|
|
|
28.8
|
%
|
|
$
|
7,908
|
|
|
12.4
|
%
|
International
|
27,705
|
|
|
26.3
|
|
|
22,799
|
|
|
25.8
|
|
|
4,906
|
|
|
21.5
|
|
|||
Total marketing
|
$
|
99,156
|
|
|
30.5
|
|
|
$
|
86,342
|
|
|
27.9
|
|
|
$
|
12,814
|
|
|
14.8
|
|
Q1 2018
|
|
Q1 2017
|
|
North America
|
|
|
International
|
|
|
Three Months Ended March 31,
|
|||||||||||||||||||
|
2018
|
|
% of Gross Profit
|
|
2017
|
|
% of Gross Profit
|
|
$ Change
|
|
% Change
|
|||||||||
Selling, general and administrative
|
$
|
222,061
|
|
|
68.4
|
%
|
|
$
|
232,058
|
|
|
75.0
|
%
|
|
$
|
(9,997
|
)
|
|
(4.3
|
)%
|
•
|
a
$4.4 million
decrease in compensation-related costs; and
|
•
|
decreases in facilities costs, systems costs, and other general expenses.
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Income (loss) from operations
|
|
|
|
|
|
|
|
|||||||
North America
|
$
|
(1,860
|
)
|
|
$
|
(14,783
|
)
|
|
$
|
12,923
|
|
|
87.4
|
%
|
International
|
5,245
|
|
|
3,103
|
|
|
2,142
|
|
|
69.0
|
|
|||
Total income (loss) from operations
|
$
|
3,385
|
|
|
$
|
(11,680
|
)
|
|
$
|
15,065
|
|
|
129.0
|
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Other income (expense), net
|
$
|
(8,515
|
)
|
|
$
|
(4,602
|
)
|
|
$
|
(3,913
|
)
|
|
(85.0
|
)%
|
•
|
$5.0 million
net loss on our fair value option investments. See Note
5
,
Investments
, for additional information; and
|
•
|
$5.5 million
of interest expense.
|
•
|
$1.4 million
in foreign currency gains, which pri
marily resulted from intercompany balances with our subsidiaries that are denominated in foreign currencies; and
|
•
|
$1.5 million
in interest income.
|
|
Three Months Ended March 31,
|
|||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
Provision (benefit) for income taxes
|
$
|
(2,335
|
)
|
|
$
|
4,587
|
|
|
$
|
(6,922
|
)
|
|
(150.9
|
)%
|
Effective tax rate
|
45.5
|
%
|
|
(28.2
|
)%
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Income (loss) from continuing operations
|
$
|
(2,795
|
)
|
|
$
|
(20,869
|
)
|
Adjustments:
|
|
|
|
|
|
||
Stock-based compensation
(1)
|
19,278
|
|
|
19,650
|
|
||
Depreciation and amortization
|
29,661
|
|
|
34,067
|
|
||
Acquisition-related expense (benefit), net
|
—
|
|
|
12
|
|
||
Restructuring charges
|
283
|
|
|
2,731
|
|
||
Other (income) expense, net
|
8,515
|
|
|
4,602
|
|
||
Provision (benefit) for income taxes
|
(2,335
|
)
|
|
4,587
|
|
||
Total adjustments
|
55,402
|
|
|
65,649
|
|
||
Adjusted EBITDA
|
$
|
52,607
|
|
|
$
|
44,780
|
|
(1)
|
Represents stock-based compensation expense recorded within Selling, general and administrative, Cost of revenue and Marketing. Other income (expense), net includes
$0.05 million
for the
three months ended March 31, 2018
and
2017
.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Cash provided by (used in):
|
|
|
|
||||
Operating activities
(1)
|
$
|
(119,747
|
)
|
|
$
|
(138,086
|
)
|
Investing activities
|
(20,382
|
)
|
|
(14,020
|
)
|
||
Financing activities
|
(20,899
|
)
|
|
(45,726
|
)
|
(1)
|
Prior period net cash used in operating activities from continuing operations has been updated from
$136.2 million
previously reported to reflect the adoption of ASU 2016-18 on January 1, 2018. See Note 2,
Adoption of New Accounting Standards
, for additional information on the adoption of ASU 2016-18.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Net cash provided by (used in) operating activities from continuing operations
(1)
|
$
|
(119,747
|
)
|
|
$
|
(138,086
|
)
|
Purchases of property and equipment and capitalized software from continuing operations
|
(20,144
|
)
|
|
(14,076
|
)
|
||
Free cash flow
(1)
|
$
|
(139,891
|
)
|
|
$
|
(152,162
|
)
|
(1)
|
Prior period net cash used in operating activities from continuing operations and free cash flow have been updated from
$136.2 million
and negative
$150.3 million
previously reported, respectively, to reflect the adoption of ASU 2016-18 on January 1, 2018. See Note 2,
Adoption of New Accounting Standards
, for additional information on the adoption of ASU 2016-18.
|
Date
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Program
|
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under Program
|
|||||
January 1-31, 2018
|
|
367,244
|
|
|
$
|
5.14
|
|
|
—
|
|
|
—
|
|
February 1-28, 2018
|
|
263,327
|
|
|
4.69
|
|
|
—
|
|
|
—
|
|
|
March 1-31, 2018
|
|
1,394,019
|
|
|
4.46
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
2,024,590
|
|
|
$
|
4.62
|
|
|
—
|
|
|
—
|
|
(1)
|
Total number of shares delivered to us by employees to satisfy the mandatory tax withholding requirement upon vesting of stock-based compensation awards.
|
Exhibit
Number
|
|
Description
|
10.1
|
|
|
10.2
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
GROUPON, INC.
|
|||
By:
|
|
/s/ Michael Randolfi
|
|
|
|
Name:
|
Michael Randolfi
|
|
|
Title:
|
Chief Financial Officer
|
|
|
|
|
|
_________________________
First Name
|
_________________________
Middle Name
|
_________________________
Last Name
|
||||
___________________________________
Street Address
|
_______________
City
|
________
State
|
______________
Zip Code
|
|||
_________________________
Social Security Number
|
_________________________
Date of Birth
|
☐
MALE
☐
FEMALE
|
||||
_________________________
Telephone Number
|
___________________________________
Email
|
|
|
|
|
|
|
•
|
I elect to exchange a whole percentage of my Cash Retainer equal to ________% (0%-100%) for an award of DSUs under the terms of the Plan.
|
|
|
|
|
|
•
|
I elect to receive a distribution of my DSUs on [_____ ___, ____].
|
|
|
|
|
|
PARTICIPANT
|
|
GROUPON, INC.
|
|
|
|
Date:
|
|
Date:
|
|
|
|
PARTICIPANT
|
|
GROUPON, INC.
|
|
|
|
Date:
|
|
Date:
|
|
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|