Groupon, Inc. (NASDAQ:GRPN) today announced financial results for the quarter ended June 30, 2015.
“Our marketplace transition continues to gain steam as we delivered another solid quarter,” said Groupon CEO Eric Lefkofsky. “Adjusting for currency, all of our businesses in North America and abroad are now growing. Groupon remains an indispensable platform for small businesses while becoming more and more of a daily habit for customers.”
Second Quarter 2015 Summary
Gross billings, which reflect the total dollar value of customer purchases of goods and services, increased to $1.53 billion in the second quarter 2015, compared with $1.50 billion in the second quarter 2014. Gross billings grew 2% globally, or 10% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter. On this F/X neutral basis, North America billings increased 12%, EMEA increased 9% and Rest of World increased 6%.
Revenue increased to $738.4 million in the second quarter 2015, compared with $716.2 million in the second quarter 2014. Revenue grew 3% globally, or 11% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter. On this F/X neutral basis, North America revenue increased 14%, EMEA increased 9% and Rest of World declined 4%.
Gross profit was $337.0 million in the second quarter 2015, compared with $366.4 million in the second quarter 2014. Excluding the $28.3 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, gross profit would have been $365.3 million.
Adjusted EBITDA, a non-GAAP financial measure, was $61.1 million in the second quarter 2015, compared with $59.7 million in the second quarter 2014, as lower gross profit was mostly offset by lower operating expenses, both reflecting the impact of year-over-year changes in foreign exchange rates.
Net earnings attributable to common stockholders was $109.1 million, or $0.16 per share, including $0.21 related to the gain on the Ticket Monster sale. Non-GAAP earnings attributable to common stockholders was $13.8 million, or $0.02 per share.
Operating cash flow for the trailing twelve months ended June 30, 2015 was $346.3 million. Free cash flow, a non-GAAP financial measure, was negative $12.5 million in the second quarter 2015, bringing free cash flow for the trailing twelve months ended June 30, 2015 to $266.8 million.
At the end of the quarter, Groupon had $1.1 billion in cash and cash equivalents.
Definitions and reconciliations of all non-GAAP financial measures are included below in the section titled “Non-GAAP Financial Measures” and in the accompanying tables.
Highlights
Units: Global units, defined as vouchers and products sold before cancellations and refunds, increased 7% year-over-year to 53 million in the second quarter 2015. North America units increased 9%, EMEA units increased 10% and Rest of World units declined 3%.
Active deals: At the end of the second quarter 2015, on average, active deals were nearly 510,000 globally, with approximately 240,000 in North America. Both include the addition of approximately 75,000 Coupons.
Active customers: Active customers, or customers that have purchased a voucher or product within the last twelve months, grew 6% year-over-year, to 48.6 million as of June 30, 2015, comprising 24.9 million in North America, 15.5 million in EMEA, and 8.2 million in Rest of World.
Customer spend: Second quarter 2015trailing twelve month billings per average active customer was $133, compared with $136 in the second quarter 2014.
Share Repurchase
During the second quarter 2015, Groupon repurchased 19,334,744 shares of its Class A common stock at an average price of $6.34 per share, for an aggregate purchase price of $122.7 million. Groupon's original share repurchase authorization has now been completed, and it has commenced repurchases under its recently announced $500 million share repurchase program. Up to $461.0 million of Class A common stock remains available for repurchase under this program, through August 2017. The timing and amount of any share repurchases are determined based on market conditions, share price and other factors, and the programs may be discontinued or suspended at any time.
Completion of Ticket Monster Sale
As previously disclosed, on May 27, 2015, Groupon announced that it had completed the sale of a controlling stake in Ticket Monster, its South Korean e-commerce business to a partnership formed by KKR and Hong-Kong-based Anchor Equity Partners, for $360 million, including $285 million in cash received by Groupon. Second quarter results include a $202.2 million pretax gain on the sale.
Outlook
Groupon's outlook for the third quarter and full year 2015 reflects current foreign exchange rates, as well as expected investments in three high-frequency use cases in Local – food and drink; health, beauty, and wellness; and things to do.
For the third quarter 2015, Groupon expects revenue of between $700 million and $750 million. This guidance anticipates nearly 600 basis points of unfavorable impact on the year-over-year growth rate from changes in foreign exchange rates. Groupon expects Adjusted EBITDA for the second quarter 2015 of between $45 million and $65 million, and non-GAAP earnings per share of between $0.00 and $0.02.
