• Adjusted EBITDA: $69 million for the full year 2024.
• Free Cash Flow: $41 million for the full year 2024.
• North America Local Billing Growth: Positive 8% growth after a 19% decline in 2022.
• International Local Billing Growth (excluding Italy): 2% growth with positive momentum in all four major markets.
• Cash Position: $229 million, improved from the previous year.

• Warning! GuruFocus has detected 4 Warning Signs with GRPN.

Release Date: March 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Groupon Inc (NASDAQ:GRPN) reported a significant transformation in 2024, with North America Local achieving an 8% billing growth after a previous decline.
• The company completed major platform modernizations, including migrations to a new cloud infrastructure and ERP system, enhancing their ability to innovate.
• Groupon Inc (NASDAQ:GRPN) generated $69 million in adjusted EBITDA and $41 million in free cash flow for the full year, marking their first positive free cash flow since the pandemic.
• The company saw double-digit growth in key verticals such as Things To Do, Enterprise Brands, and Gifting and Seasonal Offerings.
• Groupon Inc (NASDAQ:GRPN) improved customer acquisition and retention strategies, leading to sequential growth in North American active customers for the first time since 2018.

Negative Points

• Despite improvements, Groupon Inc (NASDAQ:GRPN) still faces challenges in achieving double-digit growth in North America Local for Q1 2025.
• The company experienced technical migration issues in Q3 2024, impacting their performance and requiring mitigation efforts.
• Groupon Inc (NASDAQ:GRPN) is still in the process of optimizing their market management strategy, which is not yet fully rolled out to all metro areas.
• The company acknowledges that their gifting segment, although improved, is still far from their benchmark of 50% during the holiday season.
• Employee turnover, particularly in sales, remains high as the company continues to refine its sales force and compensation structures.

Q & A Highlights

Q: Can you talk about what drove the local growth in the US during the fourth quarter? A: Dusan Senkypl, Interim CEO, explained that the turnaround was due to overcoming technical migration challenges and a strategic shift towards a curated marketplace focusing on quality over quantity. This involved working closely with merchants to ensure high-performing deals.

Q: Were you able to recover any of the lost cohort of loyal customers? A: Dusan Senkypl noted that platform stability improvements led to better results, including higher conversions, which helped in recovering some of the lost cohort.

Q: What drove the double-digit growth in the top five metro areas in North America? A: Dusan Senkypl attributed the growth to a strategic focus on market management and optimizing deals in key metros. The approach is being refined and will be scaled to other locations once optimized.

Q: Can you discuss the critical investments to drive more purchase frequency? A: Dusan Senkypl highlighted the introduction of "WoWDeals" in food and drink categories to improve purchase frequency. The focus is on offering compelling deals soon after a customer's first purchase to encourage repeat transactions.

Q: How are you attracting higher-quality merchants to the platform? A: Dusan Senkypl explained that the strategy involves a consultative sales approach, focusing on high-quality deals that offer value to customers. This includes targeting merchants with higher-value offerings rather than just deep discounts.

Q: What impact do you expect from recent US tariffs? A: Jiri Ponrt, CFO, stated that the impact would be minimal as Groupon's business is primarily local experiences, with goods making up less than 5% of revenues.

Q: Can you comment on the trends underpinning your guidance? A: Jiri Ponrt mentioned that while Q1 is expected to see slightly negative billing trends, the full year is anticipated to show growth in billings and revenues, with improvements in adjusted EBITDA and free cash flow compared to 2024.

Q: How is user engagement impacting growth in North America Local? A: Dusan Senkypl noted that improved platform conversion and effective marketing have driven growth. The focus is now on increasing transaction frequency to further enhance user engagement.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.