Revenue Performance

Groupon’s revenues reached $130.4 million, surpassing the consensus estimate by 1.13%. However, this figure reflects a 5.3% decrease compared to the same period last year.

Regionally, North America generated revenues of $96.7 million, beating expectations by 0.89%, marking a 3.2% decline year over year. International revenues, amounting to $33.7 million, exceeded the consensus by 7.16%, but fell by 10.9% year over year (10.7% decline when adjusting for foreign exchange effects).

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Detailed Financial Metrics

Local revenues of $120 million surpassed the Zacks Consensus Estimate by 2.87%, though they declined 2.9% year over year. North American local revenues decreased by 0.4%, while international local revenues faced a larger decline of 10.3%.

In terms of travel, consolidated revenues accounted for $4.3 million, missing the consensus expectations by 20.7%, and represented a 20.4% year-over-year decrease. North American travel revenues dropped by 20.9%, while international travel revenues fell 19.4% (18.3% excluding foreign exchange impacts).

Consolidated goods revenues of $6 million also fell short of expectations by 4.38%, decreasing 29.9% year over year. North American goods revenues saw a steep decline of 45.1%, and international goods revenues decreased by 10.6%, excluding the currency effects.

Customer Metrics Overview

At the end of Q4, Groupon reported roughly 15.4 million active customers, down from 16.5 million at the same point last year; however, this figure did beat the Zacks Consensus Estimate by 4.12%.

The North American customer base numbered approximately 10.3 million, exceeding the consensus mark by 5.86%. Internationally, 5.1 million active customers were recorded, also above expectations by 0.99%.

Operating Performance

Groupon’s consolidated gross profit dropped by 3.4% from the previous year’s levels, totaling $118.2 million. In North America, gross profit fell by 0.1%, while international gross profit decreased by 11.5%, when adjusted for foreign exchange.

The gross margin expanded by 180 basis points to 90.6%. Selling, general, and administrative expenses remained unchanged at $72.5 million.

The company reported a GAAP operating profit of $2.7 million, down from $17.7 million a year prior. Additionally, adjusted EBITDA fell 30.5% to $18.7 million, largely due to increased marketing expenses that proved less effective than anticipated due to technology migration challenges.

Balance Sheet and Cash Flow Analysis

At the end of the fourth quarter, Groupon held cash and cash equivalents totaling $228.8 million, a rise from $159.7 million as of September 30, 2024.

The operating cash inflow recorded was $67 million, a turnaround from an operating cash outflow of $16.3 million in the preceding quarter.

A free cash inflow of $63.2 million was reported, as opposed to a $19.7 million outflow in the previous quarter.

Outlook and Guidance

For the first quarter of 2025, Groupon projects revenues between $114 million and $117 million, indicating a year-over-year decline of 5-7.5%. The Zacks Consensus Estimate for Q1 2025 revenues is $115.4 million, reflecting a 6.24% decrease year over year.

Adjusted EBITDA for the quarter is anticipated to be between $7 million and $10 million. Additionally, Groupon expects to see negative free cash flow during this period.

Comparing to the recently reported quarter, improvements are expected in the Local segment, while Travel and Goods face ongoing challenges.

For full-year 2025, revenue guidance is set between $493 million and $500 million, corresponding to a year-over-year change of 0-2%. Adjusted EBITDA is forecasted between $70 million and $75 million, with a projected positive free cash flow of at least $41 million.

Stock Rankings and Comparisons

Currently, GRPN holds a Zacks Rank #3 (Hold).