Groupon Strong Quarterly Results Show Steady Path To $160

 

Groupon, Inc. (NASDAQ: GRPN) today announced its financial results for the second quarter ended June 30, 2021 and provided details on its recent operating progress.

Groupon EPS beats by $0.32, beats on revenue

 

Operational Highlights

We continue to make progress on our two strategic priorities – expanding inventory and

Modernizing the Marketplace:

  • Increased the amount of Deal inventory that is repeatable to more than 70%
  • Grew listings per Beauty and Wellness merchant in North America by over 20%
  • Completed the rollout of our new customer experience to our North America app, mobile and desktop users
  • Drove strong merchant adoption of self-service; nearly 50% of Deals launches in North America were done via self-service during the quarter
  • Launched the Merchant Advisor Tool, a new feature set that provides strategic campaign recommendations to merchants

 

The Outlook

For the full year 2021, we are updating our Adjusted EBITDA guidance to a range of $115 million to $125 million and continue to expect to deliver $950 million to $990 million of revenue.

 

Second Quarter 2021 Summary

 

Consolidated Revenue

  • Revenue was $266.0 million in the second quarter 2021, down 33% (35% FX-neutral) compared with the second quarter
  • Gross profit was $193.9 million in the second quarter 2021, up 41% (38% FX-neutral) compared with the second quarter

 

  • SG&A was $138.0 million in the second quarter 2021 compared with $143.6 million in the second quarter
  • Marketing expense increased by 73% to $43.7 million in the second quarter 2021 primarily due to an increase in consumer demand as restrictions lifted and Local merchants re-opened, and the launch of new brand campaigns.
  • Restructuring charges were $14.2 million in the second quarter 2021 and were related to our multi-phase restructuring plan announced in April 2020.
  • Other expense, net was $2.9 million in the second quarter 2021, compared with expense of $1.7 million in the second quarter 2020, which was primarily related to a loss on extinguishment of debt of $5.1 million partially offset by the recognition of a $4.2 million gain from the sale of an equity investment.
  • Net loss from continuing operations was $3.1 million in the second quarter 2021 compared with a net loss of $73.1 million in the second quarter
  • Net loss attributable to common stockholders was $3.4 million, or $0.12 per diluted share, in the second quarter 2021, compared with a net loss attributable to common stockholders of $72.1 million, or $2.53 per diluted share, in the second quarter 2020. Non- GAAP net income attributable to common stockholders plus assumed conversions was

$11.0 million, or $0.33 per diluted share, in the second quarter 2021, compared with non- GAAP net loss attributable to common stockholders of $26.5 million, or $0.93 per diluted share, in the second quarter 2020.

  • Adjusted EBITDA, a non-GAAP financial measure, was $41.0 million in the second quarter 2021, compared with Adjusted EBITDA of $1.3 million in the second quarter
  • Global units sold were down 28% to 17 million in the second quarter 2021 primarily due to a decline in Goods demand. In the second quarter 2021, North America units were up 51% in Local and down 67% in International units were up 17% in Local and down 67% in Goods.
  • Operating cash flow was $4.9 million for the trailing twelve month period, and free cash flow, a non-GAAP financial measure, was an outflow of $43.3 million for the trailing twelve month
  • Cash and cash equivalents as of June 30, 2021 were $565.0 million. As of June 30, 2021, we had $100.0 million of outstanding borrowings under our revolving credit
  • During the second quarter 2021, we used the net proceeds from the new convertible senior notes due 2026 (including additional proceeds from the over-allotment option exercised in April 2021), together with cash on hand, to repurchase our convertible notes due April 2022.

 

North America

  • North America gross profit in the second quarter 2021 increased 40% to $142.2 million, primarily driven by an increase in Local gross billings, partially offset by a decrease in service margin due to mix of offerings sold and a decrease in Goods gross
  • North America active customers were 2 million as of June 30, 2021, consistent with the balance at the end of the first quarter 2021.

 

International

  • International gross profit in the second quarter 2021 increased 46% to $51.7 million (32% FX-neutral), primarily driven by higher variable consideration from unredeemed vouchers and higher Local gross billings, partially offset by declines in Goods gross
  • International active customers were 9.7 million as of June 30, 2021, compared with 10.6 million as of March 31, 2021.

 

“We delivered solid financial results in the second quarter, including the highest level of quarterly global local billings since the pandemic began,” said Aaron Cooper, Interim CEO of Groupon. “From an operational perspective, we made strong progress, successfully removing Deal restrictions on more than 70% of our inventory in North America. We also recently scaled our new customer experience in North America and debuted a new brand marketing campaign, both of which we expect to be key to driving consumer engagement and, over the long-term, purchase frequency. We are steadily scaling our initiatives to expand inventory and modernize our marketplace, and believe we are executing the right strategy to transform Groupon into a destination for local experiences and build a foundation for growth.”

 

CWEB Analysts view the stock Groupon (NASDAQ:GRPN)  as a long term growth and a great addition to your investment portfolio with an upward momentum due to the local economy and post covid 19. We reiterate our bullish view on the stock with a target price of $160/share.

 

 

 

 

Image Credit Royalty-free stock photo ID: 175035335


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