In This Article:
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Groupon Inc (NASDAQ:GRPN) reported a strong start to 2025, exceeding guidance on both billings and adjusted EBITDA.
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North America Local segment saw an 11% year-over-year growth in billings, marking the first double-digit growth since 2017.
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The company's hyperlocal strategy is delivering strong results, with the top 10 cities in North America growing billings by double digits.
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International local business, excluding Italy, showed a 5% year-over-year billing growth.
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Groupon Inc (NASDAQ:GRPN) has strengthened its leadership team with key appointments, including a new Chief Marketing Officer and Chief Technology Officer.
Negative Points
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Revenue growth is currently lagging behind billings due to compression of take rates in North America Local.
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Higher redemption rates are causing a short-term headwind to revenue.
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The macro environment remains volatile, impacting consumer spending and making it difficult to predict customer behavior.
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Progress on the international website and mobile app updates has been slow, with no clear timeline for completion.
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The sale of the Gift Cloud subsidiary will remove approximately $6 million in revenue and $4 million in adjusted EBITDA from consolidated results for the remainder of 2025.
Q & A Highlights
Q: What is driving the 43% year-over-year increase in North American merchants doing more than $1 million in billings? Is it due to a new go-to-market strategy focusing on higher quality merchants? A: The increase is attributed to our hyperlocal approach, which involves a detailed focus on inventory needs in specific locations. By improving category management and focusing on quality deals, we have become better partners to both enterprise and local merchants. This shift from quantity to quality of merchants and deals is a key driver of this growth. Additionally, the current macro environment is favorable for us. - Duchamp Sekiel, CEO
Q: Can you elaborate on how the macro environment is acting as a tailwind for Groupon's business, particularly regarding the merchant pipeline? A: The macro environment is volatile, impacting consumer spending, but we see it as a tailwind, especially on the supply side. We observe signs of weakening traffic trends from some clients, which presents an opportunity for Groupon as a performance-based platform. We are deepening cooperation with existing clients and seeing a faster inflow of new brands. However, the situation remains fluid, and we must adapt to ongoing changes. - Duchamp Sekiel, CEO