Groupon (GRPN) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $114.5M, down 9% year-over-year and at the low end of guidance, while Adjusted EBITDA of $14.8M exceeded the high end; net income reached $14.5M, reversing a $40.8M loss in Q3 2023.

• North America and International segments both saw revenue declines, with International Local down 13% (only 2% excluding Italy) and North America impacted by tech migration and marketing instability.

• Raised $197M in new secured convertible debt, exchanging $176M of 2026 notes and issuing $21M new notes, maturing 2027 at 6.25% interest and $30 strike price.

• Cost controls, restructuring, and workforce reductions continued, with $21.3M in charges since 2022 and majority of reductions completed.

• New platform features launched, including full migration of North America web/desktop traffic, video content, and micro-influencer partnerships.

Financial highlights

• Q3 2024 revenue: $114.5M, down 9% year-over-year; gross billings: $373.4M, down 10.9%; gross profit: $102.9M, gross margin 89.9%.

• Adjusted EBITDA was $14.8M, marking the sixth consecutive positive quarter; trailing 12 months Adjusted EBITDA is $78M.

• Net income for Q3 2024 was $14.5M; nine-month net loss: $6.4M, improved from $81.4M loss in 2023.

• Free cash flow was negative $19.7M in Q3; trailing 12-month free cash flow is positive $28M.

• Ended Q3 with $159.7M in cash and cash equivalents (excluding restricted cash).

Outlook and guidance

• Q4 2024 revenue guidance: $124–$131M, a year-over-year decline of 5–10%; Adjusted EBITDA expected between $14–$19M.

• Full-year 2024 revenue expected to decline 4–6% year-over-year; Adjusted EBITDA guidance narrowed to $65–$70M.

• 2025 revenues expected to be flat or up low single digits, with EBITDA similar or better than 2024 and positive free cash flow.

• Management remains optimistic about future growth, citing platform transformation and new features.