GRPN

Image source: The Motley Fool. Friday, Aug. 7, 2026 at 8:00 a.m. ET Chief Executive Officer - Dusan Senkypl Chief Financial Officer - Rana Kashyap Operator: Thank you. Hello and welcome to Groupon's Second Quarter 2026 Financial Results Conference Call. On the call today are Chief Executive Officer, Dusan Senkypl; and Chief Financial Officer, Rana Kashyap. [Operator Instructions] The company has posted earnings materials, including earnings commentary, on the company's investor relations website at investor.groupon.com. Today's conference call is being recorded. Before we begin, Groupon would like to remind listeners that the following discussion and responses to the questions reflect management's views as of today, August 7, 2026, only, and will include forward-looking statements. Actual results may differ materially from those expressed or implied in the company's forward-looking statements. Groupon undertakes no obligation to update these forward-looking statements as a result of new information or future events. Additional information about risks and other factors that could potentially impact the company's financial results are including in its earnings press release and in its filings with the SEC, including its annual (sic) [ quarterly ] report on Form 10-Q. We encourage investors to use Groupon's investor relations website at investor.groupon.com as a way of easily finding information about the company. Groupon promptly makes available on its website, the reports that the company files or furnishes with the SEC, corporate governance information, and select press releases and social media postings. On the call today, the company will also discuss the following non-GAAP financial measures, adjusted EBITDA and free cash flow. In Groupon's press release and their filings with the SEC, each of which is posted on its investor relations website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to the most comparable measures under U.S. GAAP. And with that, I would like to turn it over to CEO, Dusan Senkypl, to make a few opening remarks before we jump into Q&A. Dusan Senkypl: Hello and thanks for joining us for our second quarter 2026 earnings call. It's great to be with all of you today. Yesterday, after the market closed, we released our earnings and posted our shareholder letter on our investor relations website. Today, I will make opening remarks and then open up the call for your questions. For more details on our quarterly performance, I encourage you to read our full shareholder letter, press release and Form 10-Q. We believe the best things in life happen offline. As the world becomes increasingly digitized, we believe demand will grow for analog, in-person experiences and for the digital pathways consumers use to identify, discover, and book those experiences. Groupon sits at that intersection of consumer intent and local supply, a natural bridge between the AI economy and the millions of local merchants who power Main Street. Q2 fell slightly short on the top line with Billings and Revenue each down 1% year over year, while adjusted EBITDA finished at the high end of our guidance range and free cash flow was strong at a positive $15 million. The top-line shortfall was concentrated in North America Local, which continued to see pressure in Q2 and came in below our expectations. Looking ahead, we enter Q3 with momentum, with our business accelerating to mid-single-digit growth in July, a positive signal for the trajectory of our marketplace in the second half. Project Foundry, introduced last quarter, remains our most consequential initiative as we redesign how Groupon works to be an AI-native company. Our approach is first principles and company-wide. We are rethinking how the entire organization runs across every function with AI at the center of how work gets done. Our ambition is that AI handles all repetitive work at Groupon, so our employees spend their time either managing AI agents or talking to customers and merchants. The overarching goal is increasing our execution velocity, collapsing the time between recognizing a customer or merchant unmet need and shipping the solution. We believe operating at AI speed is critical to succeeding in an AI-first world. Just over 4 months in, we are extremely pleased with the progress we have made and the momentum we are building. We are starting to see outcomes delivered faster for our customers and strategic bets moving at an accelerated pace. AI now builds and optimizes tens of thousands of hyperlocal marketing campaigns, a scale no human team could run, and engineering output per developer has more than doubled in the past 6 months. This progress and the green shoots we see, while not yet uniform across the entire company, give us confidence we are on the right path. We are doubling down to accelerate this transformation and expect that our organization will be AI-fluent by default by the end of 2026. Turning to our Strategic Bets. The organic search landscape is being rebuilt around AI-generated answers and our search foundation work is paying off. Revenue from our organic channels returned to growth in Q2, and accelerated to double-digit growth in July. We are using AI to produce and structure quality local content at a scale that was not previously possible, making our platform more relevant to both traditional search engines and AI systems. Organic is an inherently volatile channel and there is still work ahead, but together with our high-performing paid marketing engine, our improving organic channels are strengthening our reach. Our second focus is making the Groupon experience more personal and more relevant, so that the customers we bring in engage more deeply and purchase more often. Managed channels continued their improving trajectory in Q2 on the customer data platform we scaled last quarter, sending fewer, more effective messages, with revenue per send up strong double digits. And rather than one experience for everyone, we are building a customized one where different customers see a different Groupon experience. Some customers prefer to explore a map, others browse carousels, others a swipe-based interface. Customer signals that arrive in the morning can now become shipped features the same day, a cycle that previously took months. Trust and quality is our newest bet. We are building a curated experience marketplace where every deal earns its place and no one has to second guess a purchase. We are raising the bar on what appears on Groupon and have remediated or removed hundreds of deals that did not meet it. And AI now resolves the large majority of customer support contacts on its own, actually 3 times faster than at the start of the year. In the second half, we are adding verification before a deal publishes, a redesigned redemption experience including wallet support, and a pilot of a Groupon AI concierge that helps customers answer questions and book experiences. We also continue to rebuild Groupon's technology stack, and we now expect every surface in every geography to be fully migrated to our new platform by the end of Q3. And this week, we strengthened our leadership team. Adi Rajkumar joined Groupon as Chief Operating Officer, and Mark Marge joined as Vice President of Marketplace Strategy and Operations, both with operating experience from some of the most successful local marketplaces. Our North America local supply engine has been running behind our expectations and we are excited to see the impact Adi and Mark will drive there. Turning to Guidance. For the third quarter, we expect billing growth of 4% to 6%. Revenue of $128 million to $130 million, adjusted EBITDA of $19 million to $21 million and negative free cash flow in the quarter. For the full year, we are maintaining our outlook. Billings growth of 3% to 5%, revenue of $513 million to $523 million, adjusted EBITDA of $75 million to $80 million, and free cash flow of at least $60 million. Our outlook implies second half revenue growth of approximately 6% at the low end and approximately 10% at the high end. We expect the pace of growth to accelerate through the balance of the year, supported by easier year-over-year comparisons, additional marketing investment, and increasing contribution from our strategic bets. The acceleration of our outlook requires -- runs ahead of our current pace, and a slower ramp across these drivers would affect our ability to reach it. We are confident in achieving our fourth consecutive year of improving revenue growth. Taking a step back, we are building a platform on 3 compounding capabilities: AI-native experienced marketplace builders, a technology stack built for AI speed, and data that makes local commerce legible. As these capabilities compound, so does our ability to deliver on our mission to get people offline through quality local experiences at great value. This is a company-wide effort, and I want to thank every Groupon employee for the ambition and energy we are bringing to it. With that, let's open the call for questions. Operator: Our first question comes from Bobby Brooks from Northland Capital Markets. Robert Brooks: I wanted to get a better understanding of the new UI rollout and the phasing of that. Because just when I check out the website, I still get the classic UI. So just was curious to kind of hear more on that on a granular level. Dusan Senkypl: Okay. Bobby, thank you for the question. I will talk about 2 pieces here. For right now, over the several years, we are talking about ramping up new [ Mobile Next ] platform. And just a few minutes ago, I was talking about our plan to finish the full migration in Q3. This new interface is right now powering all our countries, all our surfaces, and we are really in the last phases of migration and updating the users who are -- some of them are still on the old version mainly of the application. We are cleaning up the last and least used parts of the interface. This is one critical piece of our efforts to improve the user experience because this new platform unlocks a ton of new opportunities and the pace of development, which we have on a new platform is completely different versus what we have on the old platform. Second part of that question is about the user experience, which we are improving on this new [ Mobile Next ] platform. We were talking about personalization that I was sharing and part of our management team, multiple posts on LinkedIn or X, where we were showing examples of the interface. And we are running multiple tests, and we already developed multiple features, which we are testing and piloting. And we are identifying user groups who best interact with these features. And I see and expect that during the first quarter, it's pretty much every week when we introduced something new to improve the user experience in terms of personalization. And last but not least, I was also talking about the quality bet. And here, we were talking about it mainly in terms of how we are improving deal quality and making sure that the deals have proper pricing, great customer experience. However, there is also a second very important part of this bet and this is customer experience. You can see on tens of thousands of deals on Groupon across several countries already much improved customer experience in terms of showing the most important parts of the deal and parameters, for example, next to the options. So it's very clear when you are buying this option of the deal, this is what you are getting. We are also taking most important parts of the fine print from the deals and showing it in a very visible way to customers so that they are very clear on what they are getting and there is no confusion after the purchase. So this is a combined effort on multiple fronts, because for me, my goal is to build a marketplace which brings trust to customers. Customers will be buying on Groupon, they need to build the trust and know that we are -- if I buy something on Groupon, I will get what I was promised to, I will get a quality deal at a great price. Robert Brooks: For sure. I really can appreciate that on the -- building the customer trust and to piggyback on that. It is really encouraging to hear that emphasis today on building the trust and quality. So I just wanted to hear what might be some of the KPIs you will be -- you and the team will be watching to track your progress there? Dusan Senkypl: So ultimate metric, which we are all watching here is purchase frequency, obviously. This is the key metric which will drive value also for shareholders. But internally, this is the metric which more and more teams which are participating on activities, which I'm talking about is looking at. And internally, we are going a little bit deeper, and we are really right now with the platform which we built and migrated over the last several years, we cut our customer base into multiple segments. So we are really looking on performance of new customers. We are looking on performance of what we call champions, for example, on the platform. And pretty much every week and every month, we are looking on what features we delivered, how they are impacting behavior of these customers. So one example of a very important metric, which we are following is conversion to second purchase. If we have a new customer on the Groupon, how many of those customers within, for example, next 7 or 30 days after that first purchase, they will do the second purchase. I would make a slightly jump to the topic, which is partially related to it. Initially, when we were rebuilding Groupon and marketing, we were very transactional. We were looking really only on that first transaction. But now with all the capabilities which we have, we start moving in the direction of looking on lifetime value. So we are optimizing campaigns not only based on what they bring in 7 days, but we are looking on the type of customers they are acquiring, and we spend money differently if we see that the profile of customers is this is one and only -- one and done type of customer, or whether this is a customer who purchased the product, which is typically purchased 2 to 3 times a year. And we are reallocating our resources more towards the campaigns, which are bringing the customers with better purchase frequency in general. Robert Brooks: That's terrific to hear. And then it was also just exciting to see during the quarter, the marketing partnership you did with the McDonald's loyalty app. And so, I just wanted to ask how you thought that played out. Could we maybe expect similar shorter duration partnerships like that in the future? And maybe just generally, what do you think that should show to investors about -- because it does feel like it's -- you probably wouldn't have been able to do that maybe 2 years ago or even 18 months ago. So I just wanted to give you the floor there. Dusan Senkypl: Yes, it was our first partnership of this type with McDonald's. But last few months, internally, we are talking a lot and figuring out ways how to expand this. Again, when you think about how the transformation was evolving, originally, we were really focused just on, I would call it, like transaction management marketing, which brings revenue immediately because this is what we had to fix. Now when our marketing engine is on this bottom part of the funnel, it's really working very well, scaling, understands what type of customers we are purchasing. We are expanding the marketing, we started already brand campaign in Q4 last year and we continue with brand activities during this year. We are getting knowledge and experience in the influencer marketing where we will need to double down, and this will be one area where we will be visible and investing more and more in coming months and quarters. And McDonald's is a type of partnership which we will be bringing more and more with like recognized brands. And it's definitely not just McDonald's, you can see many other great top companies on the platform. But internally, right now, we have an initiative to bring them more because it simply brings Groupon visibility. It brings huge amounts of customers exposed to Groupon brand going forward. So my plan is to show more of these. Operator: Our next question comes from Eric Sheridan from Goldman Sachs. Eric Sheridan: I'll just give you 2. First, can you go a little bit deeper in what you're seeing in June and July that increasingly gives you some confidence around the way you're framing the back part of the year versus the front part of the year? And is there a way to tease out sort of maybe macroeconomic relative to some of the things inside your control and structural on the product development side? And then the second question would just be, when you think about aligning your strategy over the medium term, how do you think about the strategy evolving towards more frequency of behavior among buyers? So you're not only seeing the buyer growth, but you're also seeing some of the elements of frequency. Really appreciate it. Dusan Senkypl: Thank you, Eric, for your questions. June and July, first of all, for the rest of the year, I expect that -- not expect, we know that the comparisons will ease it from here, really. July wasn't an easy month for us in terms of compare. So we are happy with where we are standing right now. And then a few drivers, which are very important for the further acceleration in the rest of the year. We finished majority of the platform rollout, which was a huge drag and huge project for us last few years really. The last outstanding pieces will be finished in Q3, but really vast majority of Groupon customers is now using new platform. So, it gives us the speed. We progressed significantly also with organic revenue, which is especially in SEO growing double digits, and we are in a much better position with managed channels, which are responsible for sending push notification emails to our customers. So we should be improving our customer life cycle. The personalization capabilities, which we developed and which we are testing and we have multiple of them in production are giving us tools which we will need to accelerate the growth and also this piece is very important for purchase frequency because by delivering what customers are expecting, not the generic offer of the deals on the website, but based on the signals which we get about the customer previous behavior about what they are looking at, what they are clicking at, what device they are working with, we can improve purchase frequency. And then we will also allocate more marketing to the second half, and we see improving returns of marketing. And last but not least, we were going through and still going through quite complex transformation to Foundry, making the company AI native. And while it's very painful for us and people on one side -- on the other side, I can already see results and I see acceleration of delivery of bets where teams, which are AI-native, the pace, how they are able to develop and come with features is really incomparable to anything that I saw in the past year. And on the macro piece of this question, in general, demand for local experiences remains resilient. Yes, I fully agree and see that there is a pressure on wallets and it's probably increasing. But at the same time, it also increases the appeal of value, which is our core consumer proposition. And what we see, and when I'm talking to our sales team, it increases merchants' need for demand, which is our supply proposition. So we are not counting on macro in direction, let's say, all our numbers, everything is execution driven, but I don't see macro as a headwind to us. And then on the frequency part, it's mainly about that enablement, which we got with new platform and with AI development in terms of features. We are releasing so many new features for customers where we measure how they appeal and how they change their behavior. I was talking here about the personalization. I can give you another example how we are doing the personalization. We now have much better understanding what people are searching and expecting on Groupon every single day of the week. And we see very different behavior, for example, during the weekdays and even within weekdays versus on the weekends. And we are customizing the whole engine and the whole platform so that it's simply serving the need of the customer at that moment by analyzing previous behavior, previous data, supply structure. So all this will be helping us to improve the purchase frequency, which is one of our top priorities. And then I would mention once more the changes which we announced just recently on the supply side, which was a little bit dragging us last quarter with new leadership from Adi and Mark joining, we have very high expectations and very high ambitions on improving significantly also this part of the marketplace. Operator: Thank you, Dusan, and thank you, Eric. We'll continue to take questions from the investors on the line, but the company would like to now take written questions that they've received via X and Reddit from their retail investor community. The first written question comes from [ LoneWolfV ] on Reddit. A reoccurring perception is that buying a Groupon can be a gamble because the quality of the merchant or redemption experience is inconsistent. What is management doing to raise merchant quality and rebuild trust in the marketplace? And which metrics would demonstrate the customer experience is actually improving? Also, to Dusan directly, you mentioned ElevenLabs on the last call. Is there any supply-side agentic initiative? Dusan Senkypl: So, these are 2 questions. I will take them one by one. On the first one, on the trust question, we were internally talking about customers and merchants and quality and trust a lot. However, we didn't have tools ready to make some impact. But this has changed. And this is the reason why we launched this trust and quality bet inside the company. This is one of our top priority bets inside. We are building curated marketplace where every deal earns its place. We are raising the bar on what appears on Groupon and we are removing deals that do not meet this criteria. With AI, we are building also capability to be pricing expert. We are analyzing the pricing of the merchant, we are analyzing what are the prices in the neighborhood of that merchant so that we can become really a place where customers can come and rely that they will get great quality deals at an amazing value. Our AI is daily going through all the feedbacks and customer conversations. So we can immediately on the fly, improving the deals on the platform. And it may happen that merchants may do some edit or change the content of the deal, which makes it not so easy to understand for customers what they get. When we get first 1 or 2 complaints from customers, our AI is able to detect it and just resolve it or escalate it so that our sales team can go and discuss with merchant how to make it better for the customers. We are changing the user experience. When you go to the website on most of the deals, you will see for each option, what is included, what is not included. In the past, this was not very clear. We had fine print, which was not easy to read. Now on plenty of deals already, and it will be on 100% of deals in near future. Most important elements, which are impacting customers are visible and presented, which will increase the customer satisfaction. Obviously, it's a trade-off with slightly lower, but typically -- statistically not significant lower conversion, but then much better customer experience with much lower refunds versus previous status, and then with increased purchase frequency. We are bringing also visibility of merchants availability. We are looking into their booking systems, even if they are not integrated on Groupon. We already have quite a lot of deals where we are showing the visibility, which otherwise customers had to go to merchant website, click on their booking system and find it. So it's all increasing the trust and it's all increasing customer experience. And the main metric, and we have like 10 metrics behind this internally, the main metric is repeat purchase. Because this is the most important metric for all of us and for our shareholders and one of our biggest focuses right now. The second part of the question about the supply piece. The AI voice agent program for merchant outreach continues, and our objective stands the majority of new merchant meetings set by AI agents by the end of this year, with our sales team really focused on qualified conversations. And we are expanding actually this voice pilot, which was originally just AI SDR, calling to merchants, try to book a meeting to very broad integrated AI-driven acquisition engine, which starts with better understanding of the opportunity for each category and neighborhood. Meaning like in this neighborhood, we need a deal like this and the AI orchestrating all the channels at once, meaning yes, we will send email, we will launch a paid campaign in that area to acquire a merchant, we will launch also AI call based on the results, we will define what's the next best approach. I really believe that supply will benefit from this fact because with AI and with access to all information which we are collecting about merchant communication, it can make whole go-to-market and sales process much more efficient, but also much better experience for merchants. And last but not least, you can see that we are doubling down with announcing Adi and Mark joining Groupon. Operator: Thank you, Dusan. We'll move back to investors on the line. Our next question comes from Sean McGowan from ROTH Capital Partners. Sean McGowan: A couple of questions. On that trust and quality issue, how are you communicating that shift and that goal to the consumer? You've talked in the past about doing brand marketing for Groupon. But other than the consumer having a good experience and being maybe positively surprised or whatever, or pleased, how are you communicating that this is an important strategy or goal for the company? Dusan Senkypl: So, Sean, thanks for the question. Similar to many other areas, we are trying to do the work first, and then we want to let the results speak for ourselves. I don't think that if we would start communicating this, as long as we can't stand for 100% of deals on Groupon and 100% of experience that it would do us good in the long run. So we -- this is internal focus right now, which is running already for several months. You can see the change in the user interface on the website. And when we will ramp this up to 100% of deals, and we will be internally happy, then we should be expanding this into like more marketing and more promotional communication, which we can do through some types of guarantees, which Groupon can be providing to customers. Sean McGowan: Yes, that's helpful. Shifting gears. So you talked about July seeing, I think, a return to mid-single-digit. I assume that's across the whole company. So can you parse that out a bit more? Like, what are the implications for North American Local, international local? What are you seeing on a more detailed level? Dusan Senkypl: Rana, do you want to take this question? Rana Kashyap: Sure. Sean, great to hear from you. Thanks so much for the question. You know, we are seeing, I would say, broad-based strength across the platform. So if you look at it, North America and international, we saw strength in July. We are also seeing a strong presence in our Things To Do business and our Beauty and Wellness business. It is the season for things to do right now. And our Things To Do portfolio is really doing very strongly, and we're quite pleased specifically in the tours and attractions space, but also in the local activity space. We've got great assortment. We're executing well in the season, and our customers are really responding. So we are seeing strength. North America has picked up. But really, the comment we made was for the whole company. Sean McGowan: And then my last question is, you've got so many initiatives that you've talked about over the last couple of years and Foundry being very important, but very recent one. So are you able to identify any of the improvement that you've seen so far? And I know it's early days, but is there anything you can point to in this uptick that you're seeing recently that you would say is directly attributable to Foundry or is it still too early to start to see any benefit from that in those numbers? Dusan Senkypl: So the way how we were talking externally about Foundry, but this is also how we do it internally, is the sequencing that the operating engine needs to be changed first. And we are really not trying to build some shiny stuff visible from outside. I just want to make sure that we operate internally with AI pace, that we have all the data, all the harnesses. When a new person comes, the AI support, which they will immediately get, will help them understand all pieces of Groupon and I see significant results here internally. Even when I -- when Mark was joining and providing me feedback on what he got, it was super positive feedback and the way how the data are available for all teams, how we share scales, how we have the data packages for everyone who wants to understand some segment, how it's pre-configured so that they can talk to AI about all the data. We can already see it. And this is behind the internal acceleration of the bets and seeing how teams are speeding up. Also the Foundry and the way how we are really based on first principles, rebuilding the company, it goes towards the way that teams are smaller. We call them speedboats, much less people, 2, 3 people working on fairly big initiative, means much less meetings. So internally, we already see that pace. We would not be able to have all the personalization features implemented if we would not be able do it in AI. The financial impact, it's coming after that and we believe that it will be coming through better features, reaching customers faster, seeing better results from marketing, building, identifying needs of customers and same day we're delivering and solving them. But I will -- I'm not able right now to share the expected numbers. Internally, I'm really pleased because this initiative started at the end of March, and this is by far the biggest impact of what I saw in the last 3 years on Groupon, how we operate, and most importantly, how we are able to deliver results. Operator: Thank you, Sean. We'll take 1 more written question from X from [ Evan Loesel ]. What is the plan to get a generation that has never really used Groupon to try it for the first time? And what early evidence would you point to that it's working? Specifically, are you seeing changes in first time purchases, customer age mix, acquisition costs, or repeat purchase rates among newer cohorts? Dusan Senkypl: So I would cover this from 3 different perspectives. First is the reach. We are rebuilding the organic part of our traffic acquisition and at the same time paid marketing engine. We will be doubling down also on influencer marketing. We see improving returns. We see more traffic actually on the website because we have unique content, which is and will be valuable in the future. We have much better granularity in understanding what is the traffic and what are the customers coming. So within these groups, with the personalization project, I was talking about here multiple times, we will be able to provide a different Groupon experience for younger generation, show the product which are more appealing to them. That product piece is very important. It's new app experience, different onboarding, and this is built for people who never used Groupon. And I expect that we will see very different onboarding experience rolled out completely in Q3. So it will make easier for new joiners to understand what Groupon can bring, what is the product proposition. And then on inventory side, we have new formats. We are really thinking like what can be appealing to younger generation. For example, I can mention our tourist packages found viral organic traction, who reach customers who never responded to the classic deal format. And you can see that active customers grew again this quarter and our conversion on new surfaces, which we released recently is improving. Operator: We have a follow-up from Bobby Brooks on the line. Robert Brooks: On the onboarding high-quality merchants, obviously, that's been a key goal during this whole transformation in the marketplace. And I just wanted to ask on your approach to win these new merchants. And it's kind of shifted the last couple of quarters. And last quarter, I think you specifically called out using some AI voice agents to make those broader base calls and just -- and with the goal of just setting up that first follow up with one of your actual sales agents. So just wanted to hear how that has progressed and what you've seen there?. Dusan Senkypl: Thank you for the question. There is an overlap of what I was talking about with the question coming from X. We have internal pilots on AI voice agent who is able to call to merchant and discuss with them the Groupon value proposition and set up a meeting with our agents. Right now, we see the future of this segment really to be like multi-touch AI engine, which will be customized to understand what we need where and then run the complete communication and marketing channels to approach right merchants in the right location and AI piece is part of it. I still believe that by the end of this year, a majority of these like cold calls to small merchants and the marketing approaches, emails, SMS messages, paid campaigns will be done by AI with AI really understanding what's happening on each channel and deciding what's the next best action to bring that merchant on board. So this is like go to market from technical point of view, how to get merchants. Then second, in how we are running sales and what I see as new initiatives, we are already running internal sales brain, which is digesting all information which we have about merchants, about our communication with them, about performance of deals, about performance of other deals in that neighborhood. And that AI-driven engine is building recommendation what are the next actions which we should take on our product portfolio. And the impact is that if you are a salesperson, you get amazing support by this engine because like every day it tells you like your next action, which you should do is to call to this merchant because if that merchant adds a gifting option to the deal, they can expect that we will do 50% more, for example. Or they -- based on this quality that I was talking about, the same engine can come and say, "Please call to this merchant." And if you fix this, this, this on this deal, we can expect that the refund rate would go from whatever -- from 10% to 2%, for example. So really it will be understanding and it already understands the value delivered by each action, which will make whole supply engine more efficient. Robert Brooks: That's super helpful color. And then just maybe another follow up for Rana. Is just, it seems like -- so the inflect -- the rebound in July, it would seem like North American Local is at least high single digits. Is that accurate? Is that a fair logic? And could you maybe quantify it with -- it's -- I was under the impression that it was still kind of -- it was still a pretty tough comp for you guys in July. Just any color there. Rana Kashyap: Yes. So we're not going to start getting into the exact numbers for more of our business reached beyond what we've said. I will give more color, though. North America local did improve versus Q2. We did also see a strength in North America Travel. We've -- Dusan mentioned it, it's also in the script. We've had some really interesting progress with the new format that we've been developing on tour packages. Obviously, this is very small. But just from a year-over-year basis point standpoint, it also does help a little bit because that we're seeing some strong strength there. And in terms of international. International, if you look at it, let's say it maintained the level that we were saying. So yes, the strength is coming from a pickup in North America local, North America travel. But, I don't think we will go into more specifics than that. Operator: We have another question from the company's retail investor community. From Outlier Capital on X. Management has highlighted the importance of increasing customer lifetime value, session frequency, and platform stickiness as a part of the shift to an AI-native operating model. Have you evaluated or considered launching a subscription product that could deliver exclusive deals, enhance personalization, priority access, or other benefits in exchange for a reoccurring fee? Dusan Senkypl: Yes, we did and we are. And my answer here will be very similar to the question I got regarding the quality and how we communicate it to our customers. We obviously evaluate models that deepen the customer relationship and membership economics are very well understood in our space. And I fully agree that there is a huge potential there. At the same time, the sequencing, how I see it. First, we have to make the marketplace model relevant, build this quality and trust piece that people who are using Groupon, will trust Groupon and will be coming back more often. At that moment, we should be introducing more stuff, the stuff I was talking about, maybe some guarantees, but at the same time, it will be a right moment also to introduce again membership, because that membership would be worth paying for. The capabilities which we are building, personalization, the platform which we have for managed channels, the trust and quality that are all the pieces and assets which would unlock us the future membership product in the future. But at this moment, we have really nothing to announce. Operator: Thank you, Dusan. One more question from [indiscernible] on X. I would love to have management address if they are working to implement the UGC marketing that you have mentioned you should start doing. I think it's an amazing idea. So many influencers who document local activities should be making more Groupon UGC. Seems like a no-brainer and would love to hear management's thoughts on this. Dusan Senkypl: So, I fully agree. I was mentioning earlier on the call that we started rebuilding the -- really bottom of the funnel marketing initially, and now we are really moving up in the food chain here, I would say, towards the upper funnel marketing. And UGC is an area where, yes, we are already running some experiments. We have some influencers who are generating really like tens of millions of impressions for us. But I think that the opportunity is much, much, much bigger versus what we do right now. We are still in the phase that we are building internal toolings for this with all the AI development and unlock through Foundry, this is now possible and we want to be ready to really be like a place where influencers can come, they can select their deals, we would even provide an interface where they can ask AI to build them their own like influencer mini website with their selection. We will even build a functionality, which would allow anyone who is, for example, running some local community to have their set of deals there, run just for their community, even under their own name and promote it. With this functionality, we will be approaching mainly the micro and small influencers, local influencers. But I would like to expand this also to local communities because we can share the portion of the revenue and make it as a part of even like self-funding of small local communities. Operator: Thank you, Dusan. There are no other questions. So this will conclude our call for today. Thank you, everyone, for joining us. For additional information, please go to investor.groupon.com. Before you buy stock in Groupon, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Groupon wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Groupon (GRPN) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributes the Q2 top-line shortfall primarily to continued pressure in North America Local, which performed below internal expectations despite adjusted EBITDA finishing at the high end of guidance. Project Foundry is the central strategic initiative aimed at redesigning Groupon as an AI-native company, with the goal of having AI handle all repetitive work so employees focus on customer and merchant interaction. Operational velocity has improved through AI integration, with engineering output per developer more than doubling over the past six months and AI now managing tens of thousands of hyperlocal marketing campaigns. The organic search strategy is being rebuilt around AI-generated answers, resulting in a return to growth for organic channels in Q2 and an acceleration to double-digit growth in July. A new 'Trust and Quality' bet focuses on building a curated marketplace by removing deals that fail to meet higher standards and using AI to resolve the majority of customer support contacts. Strategic leadership changes, including a new COO and VP of Marketplace Strategy, are intended to address the underperformance in the North America local supply engine. Management views the current macro environment as a potential tailwind for their value proposition, noting that pressure on consumer wallets increases the appeal of Groupon's core discount offerings. Full-year guidance assumes a significant acceleration in the second half, with revenue growth projected between 6% and 10% supported by easier year-over-year comparisons and increased marketing spend. The company expects to be 'AI-fluent by default' by the end of 2026, with AI agents projected to handle the majority of new merchant meeting settings by the end of this year. Technology migration is scheduled for completion in Q3, at which point every surface and geography will be fully transitioned to the new Mobile Next platform. Future growth is dependent on the successful ramp of strategic bets and marketing investments; management cautioned that a slower ramp in these areas would impact their ability to reach the high end of guidance. Product development in the second half will focus on adding merchant verification before deal publishing, a redesigned redemption experience with wallet support, and a pilot for an AI concierge. The transition to an AI-native model via Project Foundry is described as a 'painful' transformation for the organization but necessary to achieve the required execution velocity. Organic search remains an inherently volatile channel despite recent growth, representing a key variable in the company's reach and customer acquisition strategy. Free cash flow is expected to be negative in Q3, though the company maintains a full-year target of at least $60 million. Management has remediated or removed hundreds of deals that did not meet new quality standards, prioritizing long-term trust over short-term volume. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management identified purchase frequency as the ultimate metric for success, specifically monitoring the conversion rate to a second purchase within 7 to 30 days. The marketing strategy is shifting from transactional metrics to lifetime value (LTV), reallocating spend toward campaigns that acquire customers with higher repeat-purchase profiles. July billings accelerated to mid-single-digit growth, driven by broad-based strength in North America and International segments, particularly in 'Things To Do' and 'Beauty and Wellness'. The acceleration is supported by the completion of the platform rollout, which previously acted as a drag on development speed. Groupon is piloting a multi-touch AI engine that orchestrates email, SMS, and voice calls to automate merchant acquisition. An internal 'sales brain' now provides daily AI-driven recommendations to the sales team, such as identifying which merchants should add gifting options to increase deal performance. Management confirmed they are evaluating membership models but stated that the marketplace must first achieve consistent quality and trust before a fee-based product is launched. Current efforts in personalization and quality are viewed as the necessary foundation for a future membership offering.

This article first appeared on GuruFocus. Revenue: Down 1% year over year in Q2 2026. Billings: Down 1% year over year in Q2 2026. Adjusted EBITDA: Finished at the high end of the guidance range. Free Cash Flow: Positive $15 million in Q2 2026. Q3 2026 Guidance - Billings Growth: Expected to be 4% to 6%. Q3 2026 Guidance - Revenue: Expected to be $228 million to $230 million. Q3 2026 Guidance - Adjusted EBITDA: Expected to be $19 million to $21 million. Q3 2026 Guidance - Free Cash Flow: Expected to be negative. Full Year 2026 Guidance - Billings Growth: Maintained at 3% to 5%. Full Year 2026 Guidance - Revenue: Maintained at $513 million to $523 million. Full Year 2026 Guidance - Adjusted EBITDA: Maintained at $75 million to $80 million. Full Year 2026 Guidance - Free Cash Flow: Maintained at at least $60 million. Warning! GuruFocus has detected 5 Warning Signs with GRPN. Is GRPN fairly valued? Test your thesis with our free DCF calculator. Release Date: August 07, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Groupon Inc (NASDAQ:GRPN) reported strong free cash flow of $15 million in Q2, with adjusted EBITDA at the high end of guidance. Business accelerated to mid single-digit growth in July, signaling positive momentum for the second half. Project Foundry is driving significant efficiency gains, with engineering output per developer more than doubled in six months. Organic channel revenue returned to growth in Q2 and accelerated to double-digit growth in July. AI now resolves the majority of customer support contacts autonomously, roughly three times faster than at the start of the year. Groupon Inc (NASDAQ:GRPN) missed top-line expectations in Q2, with billings and revenue each down 1% year-over-year. North America local business continued to underperform, coming in below expectations. The company faces a slower ramp in key drivers, which could affect its ability to achieve full-year guidance. The full-year outlook implies a significant acceleration in second-half growth, which carries execution risk. The trust and quality initiative is still in early stages, with no immediate consumer-facing communication or guarantees. Q: Can you go a little bit deeper into what you're seeing in June and July that increasingly gives you confidence around the way you're framing the back part of the year versus the front part of the year, and is there a way to tease out macroeconomic factors relative to some of the things inside your control and structural on the product development side?A: Dusan Senkypl (CEO) stated that comparisons will ease from here, and July wasn't an easy month for them, so they are happy with their current standing. Key drivers for acceleration include the completion of the majority of the platform rollout, which was a huge drag, significant progress in organic revenue (especially SEO growing double-digits), and improved managed channels for customer lifecycle personalization. They will also allocate more marketing to the second half, seeing improving returns. On the macro piece, demand for local experiences remains resilient, and while there is pressure on wallets, it increases the appeal of their value proposition. He emphasized that their numbers are execution-driven and they don't see macro as a headwind. Q: A reoccurring perception is that buying a Groupon can be a gamble because the quality of the merchant or redemption experience is inconsistent. What is management doing to raise merchant quality and rebuild trust in the marketplace, and which metrics would demonstrate the customer experience is actually improving?A: Dusan Senkypl (CEO) explained that they launched a "trust and quality" bet, building a curated marketplace where every deal earns its place. With AI, they are building a pricing expert capability that analyzes merchant pricing and neighborhood prices. AI also goes through all feedback and customer conversations daily to improve deals on the fly, detecting and resolving complaints quickly. They are changing the user experience to show what is included in each option clearly, moving away from hard-to-read fine print. The main metric they are watching is repeat purchase rate, as it is the most important metric for shareholders. Q: You've got so many initiatives that you've talked about over the last couple of years, and Foundry being very important, but very recent ones. Are you able to identify any of the improvements that you've seen so far that you would say is directly attributable to Foundry, or is it still too early to start to see any benefit from that in those numbers?A: Dusan Senkypl (CEO) stated that the operating engine needs to be changed first, and they are not trying to build shiny things visible from outside. They are seeing significant internal results, such as AI support for new employees, better data availability for all teams, and smaller "speedboat" teams of 2-3 people working on big initiatives with fewer meetings. He noted they would not have been able to implement all the personalization features without AI. While he couldn't share expected numbers, he said this is by far the biggest impact he has seen in the last 3 years on how Groupon operates and delivers results. Q: What is the plan to get a generation that has never really used Groupon to try it for the first time, and what early evidence would you point to that it's working? Specifically, are you seeing changes in first-time purchases, customer age mix, acquisition costs, or repeat purchase rates among newer cohorts?A: Dusan Senkypl (CEO) covered this from three perspectives. First, they are rebuilding organic traffic acquisition and doubling down on influencer marketing. Second, through personalization, they can provide a different Groupon experience for younger generations, showing more appealing products. Third, they have a new app experience with different onboarding built for people who never used Groupon, which will be rolled out completely in Q3. On the inventory side, they have new formats like tour packages that found viral organic traction. He noted that new customer growth increased in Q2 and conversion on new surfaces is improving. Q: On that trust and quality issue, how are you communicating that shift and that goal to the consumer? You've talked in the past about doing brand marketing for Groupon, but other than the consumer having a good experience, how are you communicating that this is an important strategy or goal for the company?A: Dusan Senkypl (CEO) said they are trying to do the work first and let the results speak for themselves. He doesn't think it would do them good to start communicating this until they can stand for 100% of deals and 100% of experiences on Groupon. It is an internal focus right now, and once they ramp it up to 100% of deals and are internally happy, they will expand this into more marketing and promotional communication, potentially through types of guarantees Groupon can provide to customers. Q: You talked about July seeing a return to mid single-digit growth, I assume that's across the whole company. Can you parse that out a bit more, like what are the implications for North American local, international local, what are you seeing on a more detailed level?A: Rana Kashyap (CFO) stated they are seeing broad-based strength across the platform. North America and international both saw strength in July. They are seeing a strong presence in their "things to do" business and beauty and wellness business. Specifically, the tourist and attractions space and local activity space are doing very strongly. North America has picked up, but the comment was made for the whole company. Q: On your approach to win these new high-quality merchants, it's kind of shifted the last couple of quarters. Last quarter, you specifically called out using some AI voice agents to make those broader base calls with the goal of setting up that first follow-up with one of your actual sales agents. How has that progressed and what have you seen there?A: Dusan Senkypl (CEO) said they have internal pilots on AI voice agents that can call merchants, discuss Groupon's value proposition, and set up meetings with their agents. The future of this segment is a multi-touch AI engine that understands what they need and runs complete communication and marketing channels. By the end of the year, he believes a majority of cold calls, emails, SMS messages, and paid campaigns will be done by AI. They are also running an internal "sales brain" that digests all merchant information and builds recommendations for the next best action, such as suggesting a salesperson call a merchant to add a gifting option that could increase sales by 50%. Q: It seems like the rebound in July would suggest North American local is at least high single-digits. Is that accurate, and could you maybe quantify it?A: Rana Kashyap (CFO) declined to give exact numbers for specific parts of the business beyond what they've said. However, she provided more color For the complete transcript of the earnings call, please refer to the full earnings call transcript.

For the quarter ended June 2026, Groupon (GRPN) reported revenue of $124.68 million, down 0.8% over the same period last year. EPS came in at -$0.04, compared to $0.46 in the year-ago quarter. The reported revenue represents a surprise of -2.15% over the Zacks Consensus Estimate of $127.42 million. With the consensus EPS estimate being -$0.08, the EPS surprise was +50%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Groupon performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Gross Billings: $413.75 million versus the two-analyst average estimate of $422.09 million. Geographic Revenue- North America: $98.21 million versus $99.98 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -1.8% change. Geographic Revenue- International: $26.46 million versus $27.37 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +2.9% change. Geographic Revenue- North America- Local: $92.89 million compared to the $95.55 million average estimate based on two analysts. The reported number represents a change of -1.7% year over year. Geographic Revenue- International- Goods: $1.44 million versus the two-analyst average estimate of $2.16 million. The reported number represents a year-over-year change of -36.5%. Geographic Revenue- North America- Goods: $0.86 million compared to the $0.3 million average estimate based on two analysts. The reported number represents a change of -26.1% year over year. Geographic Revenue- International- Local: $23.98 million compared to the $24.69 million average estimate based on two analysts. The reported number represents a change of +8% year over year. Geographic Revenue- International- Travel: $1.04 million compared to the $0.96 million average estimate based on two analysts. The reported number represents a change of -16.4% year over year. Geographic Revenue- North America- Travel: $4.46 million compared to the $4.13 million average estimate based on two analysts. The reported number represents a change of +2.8% year over year. Revenue- Local: $116.87 million versus the two-analyst average estimate of $119.8 million. The reported number represents a year-over-year change of +0.2%. Revenue- Travel: $5.51 million compared to the $5.08 million average estimate based on two analysts. The reported number represents a change of -1.5% year over year. Revenue- Goods: $2.3 million versus $2.47 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -32.9% change. View all Key Company Metrics for Groupon here>>> Shares of Groupon have returned +6.9% over the past month versus the Zacks S&P 500 composite's +3.3% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Groupon, Inc. (GRPN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Groupon, Inc.? Here are five stocks we like better. Q2 performance was mixed: Groupon’s billings and revenue each fell 1% year over year, primarily due to weakness in North America Local, while adjusted EBITDA reached the high end of guidance and free cash flow was positive at $15 million. Management cited mid-single-digit growth in July and maintained its full-year outlook. Groupon is accelerating its AI and technology transformation. Project Foundry is automating marketing, customer support and merchant acquisition, while the company expects to complete its MobileNext platform migration by the end of Q3 to enable faster product development and more personalized experiences. Customer quality and merchant supply remain strategic priorities. Groupon is improving deal verification, personalization and repeat purchases while expanding brand, influencer and partnership marketing; however, North America Local’s merchant-supply engine remains below expectations. Q3 guidance calls for 4%–6% billings growth, $19 million–$21 million in adjusted EBITDA and negative free cash flow. Avis Short Squeeze Shocked the Market: Are These 3 Stocks Next? Groupon (NASDAQ:GRPN) said second-quarter billings and revenue each declined 1% from a year earlier, with weakness concentrated in its North America Local business, while adjusted EBITDA reached the high end of its guidance range and free cash flow totaled positive $15 million. Chief Executive Officer Dusan Senkypl said the company entered the third quarter with improving momentum, citing mid-single-digit growth in July. He said the improvement was supported by progress in North America Local and North America Travel, as well as continued strength in the company’s international operations. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Top 3 Small Cap Stocks Emerging as Rotation Winners “We are confident in achieving our fourth consecutive year of improving revenue growth,” Senkypl said, while noting that the company’s second-half outlook requires growth to accelerate from its current pace. Senkypl highlighted Project Foundry, Groupon’s initiative to redesign its operations around artificial intelligence, as a central element of the company’s strategy. The company aims for AI to handle repetitive work while employees focus on managing AI agents and interacting with customers and merchants. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High MarketBeat Week in Review – 10/2 - 10/6 According to Senkypl, AI is now creating and optimizing tens of thousands of hyperlocal marketing campaigns, while engineering output per developer has more than doubled over the past six months. He said Groupon expects its organization to be “AI fluent by default” by the end of 2026. The company also expects to complete the migration of all customer-facing surfaces and geographies to its MobileNext technology platform by the end of the third quarter. Senkypl said the new platform is already powering all countries and surfaces, with remaining work focused largely on the least-used portions of the legacy application experience. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling The platform migration is intended to support faster feature development and more personalized experiences. Senkypl said customer signals received in the morning can now be translated into features shipped the same day, a process that previously could take months. Groupon said its strategic priorities include improving organic search traffic, personalization, deal quality and customer trust. Revenue from organic channels returned to growth during the second quarter and accelerated to double-digit growth in July, according to Senkypl. The company said it is using AI to create and organize local content for traditional search engines and AI-powered search systems. Its managed marketing channels also continued to improve, with Groupon sending fewer messages but generating strong double-digit revenue growth from those communications. Senkypl identified purchase frequency as the company’s ultimate measure of success in improving trust and customer experience. Groupon is also monitoring customer segments and metrics such as conversion from a first purchase to a second purchase within seven or 30 days. The company has removed or remediated hundreds of deals that did not meet its standards, management said. It is also making deal terms clearer by prominently displaying what is included in each offer and surfacing key elements that had previously been embedded in fine print. AI now resolves the large majority of customer-support contacts, at roughly three times the speed seen at the start of the year. Groupon plans to add deal verification before publication in the second half of 2026. The company plans a redesigned redemption experience with wallet support. It also plans to pilot a Groupon AI concierge to help customers answer questions and book experiences. Senkypl said Groupon is not yet broadly marketing its quality-and-trust initiative because management wants the experience to be consistently reliable across the marketplace before making larger public claims or introducing potential customer guarantees. Groupon acknowledged that its North America Local supply engine has been operating below expectations. The company recently appointed Adi Rajkumar as chief operating officer and Mark March as vice president of marketplace strategy and operations, with Senkypl saying the company has high expectations for their impact on the supply side. The company is expanding its use of AI in merchant acquisition. Senkypl said its AI voice-agent pilot is designed to call merchants, communicate Groupon’s value proposition and schedule meetings with sales representatives. Groupon’s longer-term objective is for AI agents to schedule the majority of new merchant meetings by the end of the year. Management described a broader AI-driven merchant acquisition system that could coordinate emails, paid campaigns, calls and other outreach based on category- and neighborhood-level demand. Groupon is also using an internal “sales brain” that analyzes merchant information, deal performance and customer feedback to recommend next actions for sales representatives. On the demand side, the company said it plans to increase investment in brand marketing, influencer marketing and partnerships with recognized brands. Senkypl pointed to Groupon’s McDonald’s loyalty-app partnership as an example of the types of brand relationships it hopes to expand. Groupon is also testing user-generated-content and influencer initiatives. Senkypl said some influencers have already generated tens of millions of impressions for the company, and Groupon is developing tools that could allow influencers and local communities to create customized deal collections. For the third quarter, Groupon forecast billings growth of 4% to 6%, adjusted EBITDA of $19 million to $21 million and negative free cash flow. Management maintained its full-year outlook for billings growth of 3% to 5%, revenue of $513 million to $523 million, adjusted EBITDA of $75 million to $80 million and free cash flow of at least $60 million. The company said its full-year outlook implies second-half revenue growth of about 6% at the low end and about 10% at the high end. Senkypl said the expected acceleration is supported by easier comparisons, additional marketing investment and growing contributions from the company’s strategic initiatives. Chief Financial Officer Rana Kashyap said July’s improvement was broad-based, with particular strength in the company’s Things To Do, beauty and wellness businesses. He said tours and attractions performed especially well during the seasonal period, while North America Local improved compared with the second quarter. Groupon, Inc operates an online marketplace that connects subscribers with local merchants offering discounted goods, services and experiences. Through its website and mobile applications, Groupon provides time-limited deals across categories such as restaurants, travel, beauty and wellness, home services, and consumer products. Merchants partner with Groupon to attract new customers and drive foot traffic, leveraging the platform's targeted marketing tools and large subscriber base to promote special offers and vouchers. Founded in Chicago in 2008 by Andrew Mason, Eric Lefkofsky and Brad Keywell, Groupon pioneered the daily-deals model, quickly growing its user community and merchant network. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Groupon Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Global Revenue and Billings down 1% Loss from continuing operations was $1.5 million and Adjusted EBITDA was $14.8 million, at the high end of guidance Project Foundry, our AI-native transformation, is beginning to deliver better outcomes for customers and faster execution across the company Chicago, Illinois--(Newsfile Corp. - August 6, 2026) - Groupon, Inc. (NASDAQ: GRPN) today announced its financial results for the second quarter ended June 30, 2026. Results and a shareholder letter for the second quarter are posted on Groupon's Investor Relations site (investor.groupon.com). The Company has also filed its Form 10-Q with the Securities and Exchange Commission. "Project Foundry, our AI-native redesign of how Groupon operates, remains the most consequential work underway at the company, and just over four months in we are extremely pleased with the progress we have made," said Dusan Senkypl, Chief Executive Officer of Groupon. "While Q2 fell slightly short on the top line, we entered the third quarter with momentum and expect growth to accelerate in the second half. We continue to make meaningful progress across our strategic bets, with organic channels returning to growth, managed channels continuing to improve and personalization scaling across our consumer platform, giving us confidence in our outlook for the second half of 2026." Second Quarter 2026 Highlights Global Revenue down 1% and Billings down 1% (down 1% FX-neutral) year-over-year. North America Local Revenue down 2% and Local Billings down 1%, reflecting softness in Health, Beauty & Wellness, partially offset by strength in Things to Do and recovery within our organic and managed channels. International Local Revenue up 8% and Local Billings up 2% (down 1% FX-neutral). Excluding Giftcloud, International Local Revenue up 9% and International Local Billings up 5%, driven by improved organic performance from our new consumer platform and an expansion of seasonally relevant supply across major International cities, led by our Health, Beauty & Wellness and Things to Do offerings. Active customers grew 2% to 16.1 million, with growth in both North America and International Local categories. Unit sales were 8.5 million, down 7% year-over-year, reflecting lower transaction volume in North America and International, partially offset by an increase in average order value as customers purchased higher-value local inventory. Loss from continuing operations was $1.5 million, compared with income from continuing operations of $20.6 million in the prior year period. Adjusted EBITDA, a non-GAAP financial measure, was positive $14.8 million, compared with positive $15.6 million in the prior year period. Operating cash inflow from continuing operations was $18.1 million and free cash flow, a non-GAAP financial measure, was positive $15.0 million. Cash and cash equivalents as of June 30, 2026 were $226.3 million. The restructuring plan we announced in May is underway and on track. The payroll actions are estimated to result in $20.0 million to $25.0 million in annualized cost savings. We recorded $3.2 million of restructuring charges in the second quarter under our 2026 Restructuring Plan. The Company estimates total pre-tax charges of $7.0 million to $13.0 million, with a majority of the related headcount reductions expected by the end of the third quarter. Made progress across Project Foundry and our strategic bets to deepen customer engagement and drive durable growth: the rollout of our new consumer platform nears completion with conversion improving on nearly every surface, organic channels returned to growth, managed channels continued to improve, and we scaled new personalization and trust and quality capabilities. Definitions and reconciliations of all non-GAAP financial measures and additional information regarding operating measures are included below in the section titled "Non-GAAP Financial Measures and Operating Metrics" and in the accompanying tables. 2026 Outlook1 For the third quarter and full year 2026, the Company expects: 1 We do not provide a reconciliation for non-GAAP estimates on a forward-looking basis where we are unable to provide a meaningful calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various items that would impact the most directly comparable forward-looking U.S. GAAP financial measure that have not yet occurred, are out of the Company's control and/or cannot be reasonably predicted. Forward-looking non-GAAP financial measures provided without the most directly comparable U.S. GAAP financial measures may vary materially from the corresponding U.S. GAAP financial measures. Reconciling items to the amounts above include foreign currency gains and losses, restructuring and other cost savings-related charges, investment-related activity such as observable price changes, gains and losses on discrete transactions, certain income tax items, and impairment or other charges. The outlook above reflects management's current expectations for 2026 and includes forward-looking statements regarding the Company's anticipated financial performance and operating priorities. Actual results may differ materially as a result of risks and uncertainties described in Groupon's filings with the Securities and Exchange Commission, including its most recent Form 10-Q and Form 10-K. For information about our guidance, refer to our earnings commentary that is posted on our investor relations website (investor.groupon.com). Conference Call A conference call will be webcast Friday, August 7, 2026 at 7:00 a.m. CT / 8:00 a.m. ET and will be available on Groupon's investor relations website at https://investor.groupon.com. This call will contain forward-looking statements and other material information regarding our financial and operating results. Groupon encourages investors to use its investor relations website as a way of easily finding information about the Company. Groupon promptly makes available on this website, free of charge, the reports that the Company files or furnishes with the SEC, corporate governance information (including Groupon's Global Code of Conduct), and select press releases and social media postings. Groupon uses its investor relations website (investor.groupon.com) as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. About Groupon Groupon (NASDAQ: GRPN) (www.groupon.com) is a trusted local marketplace where consumers go to buy services and experiences that make life more interesting and deliver boundless value. To find out more about Groupon, please visit press.groupon.com. Non-GAAP Financial Measures and Operating Metrics In addition to financial results reported in accordance with U.S. GAAP, we have provided the following non-GAAP financial measures: Foreign currency exchange rate neutral operating results, Adjusted EBITDA, and free cash flow. These non-GAAP financial measures, which are presented on a continuing operations basis, are intended to aid investors in better understanding our current financial performance and prospects for the future as seen through the eyes of management. We believe that these non-GAAP financial measures facilitate comparisons with our historical results and with the results of peer companies who present similar measures (although other companies may define non-GAAP measures differently than we define them, even when similar terms are used to identify such measures). However, these non-GAAP financial measures are not intended to be a substitute for those reported in accordance with U.S. GAAP. For reconciliations of these measures to the most applicable financial measures under U.S. GAAP, see "Non-GAAP Reconciliation Schedules" included in the tables accompanying this release. We exclude the following items from one or more of our non-GAAP financial measures: Stock-based compensation. We exclude stock-based compensation because it is primarily non-cash in nature and we believe that non-GAAP financial measures excluding this item provide meaningful supplemental information about our operating performance and liquidity. Depreciation and amortization. We exclude depreciation and amortization expenses because they are non-cash in nature and we believe that non-GAAP financial measures excluding these items provide meaningful supplemental information about our operating performance and liquidity. Income taxes, interest, and other non-operating items. Income taxes, interest, and other non-operating items include: income taxes, foreign currency gains and losses, loss on extinguishment of debt, interest income and interest expense. We exclude interest and other non-operating items from certain of our non-GAAP financial measures because we believe that excluding these items provides meaningful supplemental information about our core operating performance and facilitates comparisons to our historical operating results. Special charges and credits. We exclude special charges and credits related to our 2026 Restructuring Plan, Italy Restructuring Plan, 2022 Restructuring Plan and 2020 Restructuring Plan, as well as gain on sale of assets, and gain on sale of business. We exclude special charges and credits from Adjusted EBITDA because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons with our historical results. Descriptions of the non-GAAP financial measures included in this release and the accompanying tables are as follows: Foreign currency exchange rate neutral operating results show current period operating results as if foreign currency exchange rates had remained the same as those in effect in the prior year period. Those measures are intended to facilitate comparisons to our historical performance. Adjusted EBITDA is a non-GAAP performance measure that we define as Income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation and other special charges and credits, including items that are unusual in nature or infrequently occurring. Our definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key measure used by our management and Board to evaluate operating performance, generate future operating plans and make strategic decisions. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board. However, Adjusted EBITDA is not intended to be a substitute for Income (loss) from continuing operations. Free cash flow is a non-GAAP liquidity measure that comprises Net cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software. We use free cash flow to conduct and evaluate our business because, although it is similar to Net cash provided by (used in) operating activities from continuing operations, we believe that it typically represents a more useful measure of cash flows because purchases of fixed assets, software developed for internal use and website development costs are necessary components of our ongoing operations. Free cash flow is not intended to represent the total increase or decrease in our cash balance for the applicable period. Descriptions of the operating metrics included in this release and the accompanying tables are as follows: Gross billings is the total dollar value of customer purchases of goods and services. Gross billings is presented net of customer refunds, order discounts and sales and related taxes. The substantial majority of our revenue transactions are comprised of sales of vouchers and similar transactions in which we collect the transaction price from the customer and remit a portion of the transaction price to the third-party merchant who will provide the related goods or services. For these transactions, gross billings differs from Revenue reported in our Condensed Consolidated Statements of Operations, which is presented net of the merchant's share of the transaction price. Gross billings is an indicator of our growth and business performance as it measures the dollar volume of transactions generated through our marketplaces. Tracking gross billings also allows us to monitor the percentage of gross billings that we are able to retain after payments to merchants. Active customers are unique user accounts, identified by a distinct email address, that have made a purchase during the trailing twelve months ("TTM") either through one of our online marketplaces or directly with a merchant for which we earned a commission. We consider this metric to be an important indicator of our business performance as it helps us to understand how the number of customers actively purchasing our offerings is trending. Some customers could establish and make purchases from more than one account, so it is possible that our active customer metric may count certain customers more than once in a given period. We do not include consumers who solely make purchases with retailers using digital coupons accessed through our websites or mobile applications in our active customer metric, nor do we include consumers who solely make purchases of our inventory through third-party marketplaces with which we partner. Units are the number of purchases during the reporting period, before refunds and cancellations, made either through one of our online marketplaces, a third-party marketplace, or directly with a merchant for which we earn a commission. We do not include purchases with retailers using digital coupons accessed through our websites or mobile applications in our units metric. We consider units to be an important indicator of the total volume of business conducted through our marketplaces. Note on Forward-Looking Statements The statements contained in this release that refer to plans and expectations for the next quarter, the full year or the future are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations and future liquidity. The words "may," "will," "should," "could," "expect," "anticipate," "believe," "estimate," "intend," "continue" and other similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, but are not limited to, our ability to execute and achieve the expected benefits of our go-forward strategy, including our broader AI-native transformation; the risk that the anticipated benefits of our AI strategy may not be realized in the time frame we expect or at all and may have adverse effects on our operations, merchants and customers; the risk that our public statements regarding our AI strategy and deployment of AI agents are not adequately substantiated or are later viewed as inconsistent with our actual capabilities or results; execution of our business and marketing strategies; volatility in our operating results; challenges arising from our international operations, including fluctuations in currency exchange rates, tax, legal and regulatory developments in the jurisdictions in which we operate and geopolitical instability; global economic uncertainty, including as a result of inflationary pressures; any impact from U.S. and international financial reform legislation and regulations, and any potential trade protection measures, such as new or incremental tariffs and other trade policies; retaining and adding high quality merchants and third-party business partners; retaining existing customers and adding new customers; competing successfully in our industry; providing a strong mobile experience for our customers; managing refund risks; retaining and attracting members of our executive and management teams and other qualified employees and personnel; customer and merchant fraud; payment-related risks; our reliance on email, Internet search engines and mobile application marketplaces to drive traffic to our marketplace; cybersecurity breaches; maintaining and improving our information technology infrastructure; reliance on cloud-based computing platforms; the risks associated with our use and integration of AI and machine learning technologies; completing and realizing the anticipated benefits from acquisitions, dispositions, joint ventures and strategic investments; lack of control over minority investments; managing inventory and order fulfillment risks; claims related to product and service offerings; protecting our intellectual property; maintaining a strong brand; the impact of future and pending litigation; compliance with domestic and foreign laws and regulations, including the CARD Act, GDPR, CPRA, and other privacy-related laws and regulations of the Internet and e-commerce; classification of our independent contractors, agency workers, or employees; risks relating to information or content published or made available on our websites or service offerings we make available; exposure to greater than anticipated tax liabilities; adoption of tax laws; our ability to use our tax attributes; impacts if we become subject to the Bank Secrecy Act or other anti-money laundering or money transmission laws or regulations; our ability to raise capital if necessary; risks related to our access to capital and outstanding indebtedness, including our 2027 Notes and 2030 Notes; our Common Stock, including volatility in our stock price and financial markets; a potential economic slowdown; and those risks and other factors discussed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2025 and Part II, Item 1A. Risk Factors in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, and our other filings with the SEC. Moreover, we operate in a very competitive and rapidly changing environment, including with respect to emerging technologies such as AI, machine learning, and data analytics. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we make. Neither the Company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to future events or circumstances. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. As used herein, "Groupon," "the Company," "we," "our," "us" and similar terms include Groupon, Inc. and its subsidiaries, unless the context indicates otherwise. Contacts: Investor Relations Contact:[email protected] Public Relations Contact:Emma [email protected] Groupon, Inc. Non-GAAP Reconciliation Schedules (in thousands) (unaudited) The following is a quarterly reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP performance measure, Income (loss) from continuing operations: Free cash flow is a non-GAAP liquidity measure. The following is a reconciliation of free cash flow to the most comparable U.S. GAAP liquidity measure, Net cash provided by (used in) operating activities from continuing operations. To view the source version of this press release, please visit https://www.newsfilecorp.com/release/308088

The market expects Groupon (GRPN) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 6. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This online daily deal service is expected to post quarterly loss of $0.08 per share in its upcoming report, which represents a year-over-year change of -117.4%. Revenues are expected to be $127.42 million, up 1.4% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 16.67% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Groupon, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +4.00%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination indicates that Groupon will most likely beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Groupon would post a loss of$0.02 per share when it actually produced a loss of -$0.32, delivering a surprise of -1,500.00%. Over the last four quarters, the company has beaten consensus EPS estimates just once. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Groupon appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Wayfair (W), another stock in the Zacks Internet - Commerce industry, is expected to report earnings per share of $0.94 for the quarter ended June 2026. This estimate points to a year-over-year change of +8.1%. Revenues for the quarter are expected to be $3.46 billion, up 5.7% from the year-ago quarter. The consensus EPS estimate for Wayfair has been revised 28.5% higher over the last 30 days to the current level. However, a higher Most Accurate Estimate has resulted in an Earnings ESP of +16.90%. When combined with a Zacks Rank of #4 (Sell), this Earnings ESP makes it difficult to conclusively predict that Wayfair will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates three times. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Groupon, Inc. (GRPN) : Free Stock Analysis Report Wayfair Inc. (W) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Friday, May 8, 2026 at 8 a.m. ET Chief Executive Officer — Dusan Senkypl Chief Financial Officer — Rana Kashyap Dusan Senkypl: Hello, and thanks for joining us for our first quarter 2026 earnings call. It's great to be with all of you today. Yesterday, after the market closed, we released our earnings and posted our shareholder letter on our Investor Relations website. Today, I will make opening remarks and then open up the call for your questions. For more details on our quarterly performance, I encourage you to read our full shareholder letter, press release and 10-Q. Let me start with the headline. Q1 fell short of our expectations. Global billings of $383 million declined 1% year-over-year, slightly below our guidance. Revenue of $117 million was flat year-over-year and within our guidance range. Adjusted EBITDA was $12.8 million, slightly below our guidance range. I want to be clear on one item: adjusted EBITDA of $12.8 million includes approximately $2 million of severance reflected in SG&A in the quarter related to the roughly 5% head count reduction we executed in Q1. The pressures in the quarter concentrated in 3 areas: continued softness in our managed and organic channels, which we flagged on the Q4 call; a deceleration in North America local, where SMB merchant acquisition slowed and enterprise turned negative for the first time in 5 quarters and our first soft quarter in health, beauty and wellness after 4 consecutive quarters of growth. Severe winter weather in January and February added a near-term headwind. Things to Do continue to grow across both North America and international and partly offset these pressures. April performance has improved, driven by North America local reaccelerated. Managed channels are recovering with email returning to positive year-over-year growth. SEO trajectory turned positive in mid-April. These are early indicators, but they validate the work we have been doing on our customer data platform, and on AI-driven content and they give us confidence in the back half. Importantly, none of the Q1 results yet reflect the operating impact of Project Foundry, which I will speak to next. Turning to Project Foundry. Foundry is the most consequential operating decision this management team has made since arriving at Groupon 3 years ago. We are rebuilding Groupon as an AI-native company. Foundry is not a product launch. It's a redesign of how the company works. We are embedding AI agents into the core of every function, giving business and product owners direct access to the data, tools and creative leverage they need to act in hours rather than weeks and removing the analytical and engineering layers that previously sat between an idea and its execution. The operating shift is already visible. We are piloting AI voice agents that conduct outbound outreach to small- and medium-sized merchants. And our objective is for the majority of new merchant meetings to be set by AI voice agents by the end of 2026. Our marketing teams are operating an AI-driven stack across SEM and SEO that continuously evaluates campaign performance, generates creative variants and runs experiments at a pace not previously possible. Our product teams are starting from AI-built demos rather than written specifications and in some workflows, shipping consumer-facing functionality without traditional engineering involvement. Groupon IQ, our AI deal creation platform is in production. AI-generated review summaries are live across the marketplace. By the end of Q2, we expect every leader at Groupon to be using AI agents in their daily work. As we rebuild around AI-native execution, we are also restructuring the operating model. We reduced total head count by approximately 5% in Q1. We are evaluating additional restructuring actions in Q2 that we expect will further reduce global head count by approximately an additional 15%, along with other significant cost reduction and automation actions. These plans have not been finalized or approved by the Board, and we will share details on timing, expected costs and anticipated savings once approved. The proposed is straightforward, to enable Groupon to operate at the speed required to win in an AI-native world. Outside of Foundry, we made meaningful progress on our other strategic bets. Our customer-facing platform rebuild is in the final stretch after a multiyear journey. The new iOS app is fully deployed across North America. The new Android app launched in North America at the end of Q1 to new users. The new international web platform is live in all markets. These platform upgrades were delivered without material disruption to our financial results, which is itself a meaningful accomplishment given the scope of the work. Our customer data platform is now live in all major markets, and we are using it to drive a fundamentally different approach to managed channels, anchored on customer lifetime value rather than individual transactions. And in SEO and AI search, we are positioning Groupon to continue to drive performance in an organic search landscape restructured by AI-driven search experiences. On capital allocation, we executed against the buyback authorization. Since our last earnings release on March 10, we repurchased 2.8 million shares for $29.7 million at a weighted average price of $10.58, representing approximately 7% of shares outstanding. As of May 7, approximately $215 million remains available under that program. Going forward, we will continue to be opportunistic, taking into account our cash generation, our investment priorities, market conditions and the trading price of our shares. Our first capital priority remains investing in the organic growth opportunities in front of us. We continue to hold our minority stake in SumUp and any liquidity event there would give us additional capital to deploy. On guidance, we are affirming our full year. We continue to expect billing growth of 3% to 5%, revenue of $513 million to $523 million, adjusted EBITDA of $70 million to $75 million and free cash flow of at least $60 million. For Q2, we are guiding billings flat to up 2%, revenue of $126 million to $128 million and adjusted EBITDA of $13 million to $15 million. While April's improvement give us a positive start to the quarter, we have set Q2 guide in the same range as Q1 to factor in a difficult comparison later in the quarter related to several large enterprise campaigns that have different performance expectations this year. We expect the second half to deliver improved results from our strategic bets, better execution in North America for local and additional marketing support. Stepping back, the long-term opportunity for Groupon remains compelling. The market for online local experiences is significantly underpenetrated relative to categories like hotels and airfare. We believe AI-driven discovery and agentic transactions will accelerate that penetration and Groupon sits at the intersection of consumer intent and local supply, a natural bridge between the AI economy and the millions of local merchants who power Main Street. We remain committed to our long-term ambition for accelerated growth. Our refreshed mission anchors all of this. We get people offline through quality local experiences at great value. The best things in life happen offline, and as the world becomes increasingly digitized, demand will grow for analog, in-person experiences and for the digital pathways consumers use to identify, discover and book those experiences. That is the company we are building. I want to thank our team. This transformation is not easy and their dedication, intensity and execution under pressure have made this progress possible. With that, let's open the call for questions. Operator: Our first question comes from Bobby Brooks from Northland Capital. Robert Brooks: I just wanted to unpack a little bit more some of the factors that caused some of the headwinds in the small business merchant base in North American local. Is that mostly stemming from kind of the weather -- the kind of severe weather in the first 2 months? Curious to hear there. Dusan Senkypl: So severe weather was definitely a part of that. Also -- and Bobby, thank you for the question. The SEO and managed channel headwinds, which we were talking about on the last call also participated on headwinds. And the third element was also related to enterprise where the AI inventory is very important. At the same time, we are -- we have plenty of bold actions right now with -- for local, and we are very optimistic going forward. The AI will significantly unlock for us an opportunity to acquire more merchants without being restricted to limitations and the size of our core sales team because we plan and we are already piloting the meeting setups for them with AI, which significantly increases the performance and capacity. And we have many other tools which we are deploying right now. Robert Brooks: Curious on that outbound -- AI outbound with the merchants, I was just curious like are you seeing good win rates, I guess, is the word I'll use of like merchants getting those calls and setting up that first -- because I also kind of see when I get an AI call, like I usually just kind of ignore it or hear it's AI and hang up. Like is that -- have you guys kind of figured it out where it doesn't seem like AI and those merchants are booking the first meeting? Dusan Senkypl: So there is definitely a small group of people, but it's really minority who don't want to talk to AI yet. I believe personally that this group will be getting smaller and smaller as pretty much every big company, every bank is deploying the AI. And the quality when we are using the frontier models and frontier solutions, I'm personally not able to recognize whether the call is coming from AI or from a human person. But at the same time, what it opens to us is unlimited capacity at required times because right now, with limited number of salespeople, they are pretty much trying to find out when to call to whom. And based on the AI, suddenly, we have 0 limitations in terms of how many calls we can be doing and when. So we can be doing the calls at times which are fitting much more to merchants. So if we know that in some segments, for example, the owners of small businesses don't have so many customers around noon, so we can be calling them around noon to all of them at the same time. We can be accommodating based on where you are sitting, is it -- East Coast versus West Coast. Right now, majority of our workforce in sales is in Chicago, in Illinois. So we are not really calling in the evening. All this opens up, and it's more than paying off versus that initial loss, which we currently have with people who don't want to talk to AI. Robert Brooks: Okay. That's great color. And then kind of continuing on the AI initiatives, with obviously a clear focus of being AI-native company. And I think last quarter, you mentioned how all business unit leaders kind of had to come and propose how they're going to integrate AI into the workflow. And I think today's call, you said that you expect all folks to be using agents later this year. So I was just curious to kind of hear more of a deeper update on like what some of those initiatives -- maybe what some of the more exciting initiatives you heard get proposed by those business leaders? And is it fair to think that the head count reductions is direct relation to, oh, okay, we can use AI for this. And so now we can kind of pull back on our head count in this area. Dusan Senkypl: So first, let me tell you that the motivation for the change and being AI first is not to save cost or have less people working for us. For me, the main motivation is to accelerate how company operates. I personally don't think that companies which will not operate in this mode would survive. And because I'm investing heavily in AI for the last 2 years, and we have plenty of people like this in Groupon and in other companies around me, I see how people who are AI native completely changing the paradigm of how quickly they are moving because they are not waiting on others to prepare reports or data. They can just -- you can imagine it like you have additional 5 or 6 AI people working for you 24/7, you can ask them whatever you want. So that pace which comes with it is really, really amazing. We are changing, and it's not only us, it's pretty much everyone who is on this AI frontier level. The way how corporations are working, it doesn't make sense anymore to have like teams of 5 or 6 people working on something with all that communication overhead around it and meetings. It's really one or two people, we call it speedboats, who are taking decisions immediately moving super fast, shipping products in days or weeks. And I expect that more and more of this will be coming to Groupon. But when you look how we were talking about SEO less than 3 months ago, for example, without AI, we would not be able to accelerate so significantly. I see same happening on SEM, also [ mobile next. ] Last almost 3 years, we were talking about the project, how we are moving really slowly. But last 3 to 5 months, the progress significantly accelerated. We would not be able to achieve it without AI. And I see right now that this is happening across all projects. We pretty much don't want to have in the Groupon any project which would not be around AI first because we simply see the outcomes, speed and the results from these projects to be significantly superior to the old way of working. Operator: Our next question comes from Sean McGowan from ROTH Capital Partners. Sean McGowan: I want to follow up on Bobby's question a little bit. You were already doing a pretty good job with SG&A spending and a lot of cuts. But how -- I know you just said it's not about cost primarily, but how much lower could the G&A spending get with some of these initiatives? Dusan Senkypl: Sean, thank you for the question. We were in the commentary stating that right now, the 15% restructuring is not approved by the Board, and we are not talking about specific actions. At the same time, we were mentioning that we are looking very closely on the 15%, along with other significant cost reduction and automation actions because we really see this as a paradigm change how to operate the company. So I will not give you really any numbers. The saving is definitely not a primary motivation because this is probably for the first time in Groupon's history when we are talking about these reductions while we are growing, not when we need to cut something because -- like Groupon has a major problem with the business, the motivation is really to speed up and change the operation mode of the company. I see it as an opportunity and definitely that will be a lower cost related to all these changes, but it gives us opportunities to invest to grow maybe in other areas. So sorry, I can't give you right now any numbers. Sean McGowan: I understand. There's sensitivity around that. I appreciate that. Shifting gears, it seems like consistently as you talk about international billings ex-Giftcloud, that the underlying business, excluding Giftcloud has been pretty strong. Is there any reason that we should not expect that ex-Giftcloud business to stay as strong as it's been or much stronger than the overall reported number? Or are there factors that are going to make that comparison tougher? Dusan Senkypl: I see the difference with international versus NA that in the past, we were -- or Groupon was doing much less cuts to the sales force and was cutting mainly outside of the sales team. So I would say, in general, the sales teams in international are slightly stronger also, not only in terms of experience, but also head count. And because they are serving individual countries, they can be more focused. So you can think about it that we have these like countries runs in a similar way how we are running the Chicago in NA, where we have better results versus the rest of the country, which is driving the pace. And obviously, the team is doing there great job. So I'm optimistic about around international. Right now, we have headwinds with Emirates because of this very complex situation with the war and politics there. But otherwise, I see opportunity for us in all markets. Sean McGowan: Okay. I have two quick questions for Rana, if I can. First, what's up with the taxes? What's the weird thing going on in taxes in the quarter? And second, why would you not add back that severance if that's, in fact, something that's boosting the G&A spending? Why would you not add that back for adjusted EBITDA? Rana Kashyap: Yes. Thanks, Sean. I'll take the second question first, and then I'll go to the first question. We have a pretty established policy on how we define adjusted EBITDA, consistent with guidance from our regulators. And these severance actions were undertaken on sort of ongoing activities. It was not part of a restructuring action that we put in place in Q1 that was Board approved. And so at the same time, we wanted to let investors know that we did have material severance expenses. So this is why we made sure that it was disclosed in our commentary around SG&A. So this is something that we are -- see in our numbers. We see it is part of the story in Q1 and why we told you. I don't know if that answers your question, Sean. Before I go to the first one... Sean McGowan: No, it just seems like you actually didn't miss. Even though the way most investors would look at it. You didn't come in below. But anyway, I get it's a matter of policy, but your adjusted EBITDA is actually better than it looks. Rana Kashyap: And that's correct. And we are -- our role here, we want to be as transparent as we can be. So we want to make sure you understand the puts and takes of the quarter, and that's why we included that note in the letter. I'm glad you picked up on that. Listen, in terms of tax, and there was -- there's always quite a bit of movements going around quarter-to-quarter related to how we are planning the business and potential changes that we're making. I'm happy to go in a little more detail with you offline, but there's nothing structurally that's changed with our business, Sean, at this point. We have -- we do expect to see some benefits on the cash tax side related to some of the legislature that was passed last year. And so from a cash tax standpoint, we do expect this year to be more efficient. But structurally, our business, there's nothing very different happening from a tax perspective, absent changes in the regulatory environment. Operator: We'll now pose written questions to the leadership team. [Operator Instructions] Our first question is for Dusan. How are you personally using AI day-to-day? And what's changed for you in the last 6 months? Dusan Senkypl: It's -- thank you for the question. I see major changes happening pretty much every month. If I will be looking backwards how I was using AI 6 months ago, I was experimenting with like Vibe coding and having agents doing some like small engineering tasks to build tools for me to make my life easier. I was using AI as like a chat partner, all my projects, all my brainstormings were run in AI. Then I would say some 6 to 8 weeks ago, I switched into the agentic mode. I was actually commenting this or posting some articles on LinkedIn about it that I built AI chief of staff, which is like a solution where all my projects live with. It's built on a Claude code, an Anthropic solution. And it's running all the data. It has access to all the data which I need for my work. I'm sharing a lot of content. It sees my emails, reads all the tasks which we are working on. And this is like a primary way of working for me. I'm really spending time on meetings with people or -- then everything else I am working on through my AI. And I see significant boost of productivity. I was -- and I am sharing this toolkit within Groupon and with my peers. Some of them took it and improved it significantly and much more advanced versus me. But really right now, I see AI with pretty much old models right now because all the major AI companies will be coming with significantly better models in coming weeks and months. But if I provide enough context, the AI is giving me the answers which are same or better versus what I would be able to do, but it provides me these answers in minutes or hours versus me, I would need to be spending hours. So I can work on 10x more projects. I have visibility in more stuff. And also it changed the way how we are working with leadership and managers in the company. In the past, it was always prepare 2-pager, 1-pager with big picture, don't spend more time. Right now, it's completely different. Just -- let's provide raw data, throw it on AI and AI can do completely research, find out how best-in-class on the market are working and doing the stuff, show 5, 10 different versions for our solutions. So for me, it's a complete game changer. I feel that I don't have to wait anymore on this stuff because I have it available right now. And I see that the landscape is really developing significantly. The pace is really unbelievable. And what we have right now, in a few months, will be even significantly more capable. Operator: A follow-up question on that. What's your conviction on where AI and local commerce goes over the next 18 to 24 months? And where does Groupon need to be to get -- when it gets there? Dusan Senkypl: So I would like to position Groupon as a company, which will be significantly helping small businesses because it's not easy to run and operate small business, not only in North America, but pretty much anywhere in the world, and you definitely don't have time to educate yourself on what's happening in AI. So Groupon is investing and will be investing more into the toolkit so that we are providing platform to small businesses, how to operate their business, how to get more clients, advise them. We are sitting on a lot of data. We were talking about the CDP, about the customer data platform for consumers, but we have a ton of data also for merchants. And I would like to build a solution, which will be taking this data and helping merchants to run their businesses better. This is on the merchant side. On the consumer side, the way how people are searching, browsing is changing. So I want to position Groupon at a place, which is a platform which any AI agents can be using. So we can be connected to pretty much anything in the world, whatever will be popular, best-in-class as a platform, which will be consolidating the links and traffic and deals of small merchants who on their own would not be able to do this. So we would -- with all this, when we put it together, we will be able to provide the power and benefits of AI to small businesses because right now, it's quite limited to bigger organizations, which have much more resources versus small businesses. Operator: Another follow-up on that. What's the right way for investors to track whether the AI-native operating model is actually working beyond the headline P&L? Dusan Senkypl: So the way which we are taking in Groupon is slightly different to the way which some other companies are taking. My strong belief is that if we want to be AI-native company also in terms of AI products for merchants and for partners, for us, we need to be AI first inside. So that's why this like high focus on how we operate to make sure that every single person is running AI because it changes not only the cost and SG&A, which we were discussing here on the call, which is really not so important for me right now, but it changes the mindset. It changes the way how you are thinking about the stuff. It changes the -- you are not simply willing to do anything in a slow way if you know that you can deliver something in hours. And then this translates into products which we are building, which not only that we will be able to ship them and move them fast, but we will be also able to come with products which will be AI first. If I would be in the shoes of external investor, I would be definitely looking how Groupon is used by AI platforms, whether when you are searching there, whether you can find Groupon deals, which -- any time I'm trying that I'm able to find Groupon deals in OpenAI or in Google, and this is one of our focused strategies. In the future, I expect that this discovery piece will be moving towards whole agentic commerce, and we, inside Groupon have bets and projects to build a platform, which will be like an open connector for pretty much any new standards which will be coming. Operator: And one final written question. What has surprised you most about AI inside the company since you launched Project Foundry? Dusan Senkypl: I would say the biggest surprise for me was the quality of AI voice agents. I was covering this on the call because I was testing when -- last year, I'm talking to other people who are using it. Last quarter, during the trip, which I had in my team to San Francisco, we were visiting ElevenLabs and some other frontier companies. And what we saw as a progress in this area was unbelievable. And I think it's a major unlock for us how we will be able to talk to small merchants and really unlock the capacity. When the AI call is done right, you are simply not able to recognize whether you are talking to human or AI agents. So this changed in last probably 5 months because in the beginning of the year, this was definitely not true. This was the biggest surprise for me. Operator: We have a follow-up from Bobby Brooks from Northland Capital. Robert Brooks: Just on the -- obviously, there's been some news bubbling up of SumUp moving towards an IPO. And I think you guys have made it clear to the market that when you get a liquidity window, you'll use it. Just wanted to hear, it would be a nice cash sum for you. Any thoughts on like what that cash would go to use for? Obviously, the balance sheet is really strong. So would it just be -- but a lot of like the growth initiatives seem to be like low capital requirements. So just curious to hear maybe how you're thinking about how you might use that cash windfall, if it were to occur. Rana Kashyap: Do you want me to take that, Dusan? Dusan Senkypl: Yes. You can take it. Rana Kashyap: Yes. So thanks, Bobby, for the question. We continue to be -- believe that SumUp is an incredibly valuable asset. And as you've noted, we continue to own a small minority stake in it. They are developing well. Their performance is strong. And as you've noted, there's some public commentary that they're getting ready to be a public company. Our view on this is they are -- they have the scale, they have the business model, they have the management team, and they have really, I think, the story to be a successful public company. But the timing on that and when that will happen is quite uncertain. So we continue to be a passive shareholder there, and we continue to be supportive of the actions and the direction they're headed. In terms of -- this is a non-core investment for us, and we don't plan to hold this for the long term. So if there is opportunities for us to monetize that investment, we will look at it opportunistically. And in terms of that -- if that capital does -- if that asset does turn to cash, we will look to allocate this with -- consistent with how we think about our capital allocation policy right now, where we are looking opportunistically at share buybacks. We are looking at what we see in terms of our investment needs, which you've noted, how our business is performing, market conditions and where our stock is trading. So we will be opportunistic, and we will see where things go. The only other thing I will tell you, Bobby, is we've been following SumUp since we've been here for 3 years. And so they have definitely improved a lot, but I've never gotten the timing right on that one, and I don't think it will be smart for us to try to pick timing now. So what is most important to me is that, that business is doing well and has a great position in their market, and we are rooting for them to continue on that path. Robert Brooks: Yes, absolutely. I appreciate that color, Rana. And yes, definitely not looking for -- looking for the crystal ball prediction. It's obviously a passive asset for you, but great to hear that additional color on how you would maybe think about using that cash. And then maybe one last one for me is just on the different marketing channels. I know that was -- some details were discussed there. But some of the other digital marketplaces I cover, one particular was talking about really good strength and leaning into advertising on Meta and [ Pin ] and more so leaning away from Google. Just curious if you could provide any color on -- a little bit more color on what marketing funnels, channels are working best for you and which ones maybe you're starting to lean away from? Dusan Senkypl: I can take this question. I don't think there are marketing channels where we are starting to lean from. I believe that Groupon should be maintaining the position and try to spend as much as possible with very disciplined ROI on every channel. But you are completely right with Meta, where I see disproportionately bigger opportunity versus Google, where I believe we penetrated most of the surfaces, which are suitable for Groupon, and we can get much better there. But in Meta, especially with video content, we have much more opportunities. Meta also released in the last -- I think it's 2 weeks or so, much better connectivity for AI. So our team is already working with AI, generating the advertisements and completely AI managing the campaigns. And at the same time, we are experimenting heavily with AI-driven way how to generate quantity of videos based on our local content because currently, AI allows you, if you take just a few pictures, just from those photos, let's say, you can create really beautiful, compelling videos, which will be opening us opportunity to advertise mainly on Meta, but then also on TikTok more. Robert Brooks: Very interesting. And then maybe just one follow-up on that AI content. How does it work, the relationship like with the merchant, essentially, if they're signing up to use you as a service or use your platform, do they inherently then give you the ability to kind of create content for them through AI? Like just because I would guess some business owners probably want to be a little bit more protective around that. Just curious to hear how that dynamic works. Dusan Senkypl: We are significantly improving quality of content with AI. So actually, until now, I didn't hear about any single complaint. In several cases, I heard wow, this is unbelievable, when we took, I would say, mediocre pictures from merchant website, for example, and then reprocessed it and improved it with AI. So I actually see it as a positive thing for merchants because it is in their best interest to be represented in the best possible way and the quality of media, which thanks to AI, we can now provide also to small businesses is comparable with the professional outputs, which bigger companies are using. Operator: There are no other questions. So this concludes our call for today. Thank you, everyone, for joining. For additional information, please go to investor.groupon.com. 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Image source: The Motley Fool. March 11, 2026, 8 a.m. ET Chief Executive Officer — Dusan Senkypl Chief Financial Officer — Rana Kashyap Dusan Senkypl: Hello, and thanks for joining us for our fourth quarter and full year 2025 earnings call. It's great to be with all of you today. Yesterday, after the market closed, we released our earnings and posted our earnings commentary on our Investor Relations website. Today I will make opening remarks and then open up the call for your questions. For more details on our quarterly and full year performance, I encourage you to read our full earnings commentary, press release and 10-K. I want to start with what matters most. 2025 was a milestone year for Groupon. For the first time in a decade, we returned to both billings and revenue growth. Full year global billings grew 7% to approximately $1.67 billion. We delivered a second consecutive year of positive free cash flow, and exited the year with approximately $296 million in cash. These are not incremental improvements. This is a fundamentally different company than the one that existed 3 years ago. Our core local marketplace, which represents approximately 90% of billings, grew double digits for the full year in both North America and international, excluding Giftcloud. Global active customers reached 16.2 million, up more than 5% year-over-year, with North America local active customers growing 12%. Now let me be direct about Q4. We did not finish the year the way we planned. Global billings grew 4% year-over-year, but came in below our guidance range, as did revenue and adjusted EBITDA. The shortfall was not broadly distributed. It was concentrated in 2 specific areas: enterprise channel deceleration in North America and underperformance in our organic and owned marketing channels. Both are well understood, both have clear root causes, and both have direct action plans underway which we go into more detail in our earnings commentary that we released last night. On the product side, our product and engineering organization is shipping more, faster and with better quality than at any point in recent memory. Our platform migration reached a significant milestone with 50% of all iOS North America users now on the new mobile app, and we expect all iOS North America app users to be migrated by the end of Q1. Along with our new website, this is a complete rebuild of our core consumer platform, a multiyear undertaking. And completing this ramp-up is meaningful not just as a technical milestone but as the foundation for our next phase of growth. Early results show that the new users on the updated platform are generating stronger monetization per user than on the legacy app. With the new platform in place, we now have the development velocity to move quickly on the opportunities ahead. In 2026, our product agenda shifts from conversion first to grow first, with a new search and relevance engine, a customer data platform now live in North America to drive personalized customer journeys, and the infrastructure to make our inventory discoverable and transactable by AI agents and platforms. That last point is central to where we are taking this business. Our number one strategic priority for 2026 is to shift the business towards an AI-native operating model. We believe the next generation of local experience, discovery and transaction will be driven by autonomous agentic systems that can evaluate options and execute transactions on behalf of customers. The platforms that position early for this shift will capture disproportionate value, and we intend to be one of them. We are building our proprietary AI personalization layer, making our inventory discoverable and transactable by AI agents and targeting technical readiness for AI agents initiating transactions by mid-2026. To underscore our commitment, today we announced the formation of a dedicated Artificial Intelligence Committee of the Board of Directors, making Groupon one of the first publicly-traded consumer marketplaces to establish a Board-level AI committee. We appointed Amit Shah as a new Independent Director to chair the committee. Shah is the founder and CEO of InstaLILY AI and previously served as the President of 1-800-FLOWERS.COM. His experience and the intersection of commerce platforms and emergent technologies is directly relevant to the work ahead. On 2026 guidance, our full year results delivered our first consecutive year of improving revenue growth, and we expect that trend to continue. That said, the pace of growth improvement will be more moderate than the trajectory we were building towards. The headwinds in organic, owned and enterprise channels are addressable and we have clear plans against each, but the fixes will take time to compound. Our guidance reflects that reality. We are guiding to 3% to 5% billings growth, 3% to 5% revenue growth, $70 million to $75 million in adjusted EBITDA and at least $60 million in free cash flow. We also plan to host an investor event in the second half of 2026 to provide deeper insight into our strategy and our path forward. Taking a step back, the long-term opportunity here remains enormous. The market for online experiences has significant under-penetration compared to categories like hotels and airfare. We believe AI-driven discovery and agentic transactions will accelerate online penetration and local experiences, and Groupon is well positioned to capture that growth. We remain confident in our long-term targets to accelerate global billings growth to over 20%. As we move into our growth phase, we are anchoring the company around a clear mission. We get people off-line through quality local experiences at great value. In a market where every platform competes for more screen time, Groupon exists to drive real-world commerce, connecting consumers to local businesses, and generating measurable foot traffic and spend. As AI shifts from assistive tool to autonomous agents that can discover, evaluate and transact, Groupon's position at the intersection of consumer intent and local supply makes us natural bridge between the AI economy and the millions of businesses that power local communities. We are still in the early innings of a massive opportunity to become the trusted destination for discovering high-quality local services and experiences at unbeatable value. We have the cash, the technology and the strategy to win. Our work is far from finished, but the foundation we have built gives me real confidence in what comes next. I want to thank our team. This transformation is not easy. And their dedication, intensity and execution excellence have made this progress possible. With that, let's open the call for questions. Operator: Thank you, Dusan. Our first question comes from Bobby Brooks from Northland Capital Markets. Robert Brooks: So it was excellent to hear how -- the commentary of how conversion rates across every portal and geo improved in the fourth quarter. I just wanted to hear more on what you believe drove that. And do you feel like there's more room to go on improving this further? Or maybe is that a level you'd like to maintain? Just curious to hear more there. Dusan Senkypl: I believe that the conversion results which we have are a result of several different aspects. The first I would like to mention is the platform development, because when you compare what we are running and operating in Groupon versus what we had 2 years ago, the consumer interface is much more consumer-friendly, we are improving the search and relevance experience, just trying to present our customers the products which are relevant. The second dimension of that is also related to our offer, because we are not just trying to get as many merchants on the platform as possible, but we are really discussing the quality of merchants, quality of offerings. And this has also translated to conversion. And at the same time, in our marketing channels, we are trying to buy as relevant traffic as possible. Not just widely get users who may not be really interested in our deals on the platform, but we are trying to improve the marketing. So we are buying in the paid channels the traffic which has the highest possible conversion. This comes also with the fact that we are buying slightly less eyeballs in general, but improving the conversion significantly. I expect that this trend will continue because also part of the like decision-making funnel is moving towards like AI surfaces and interfaces which are informing customers on what's possible. But we will continue with our conversion improvements through the better inventory and better products. So I expect that this trend will continue. Robert Brooks: Got it. And then shifting gears, you mentioned how a weak pipeline of new brand adds and some one-off issues with existing enterprise merchants kind of drove that weakness in that segment. But I wanted to get a little bit more in-depth there. Why do you think the pipeline is weak just generally? And it felt like -- because it felt like we turned a corner on winning new merchants as you could kind of go to them with a lot more data supporting, hey, why doing vouchers on Groupon is beneficial. Did something change there? Maybe that was more specific to SMBs? Just wanted to hear more on how that pipeline for enterprise weakened. Dusan Senkypl: So last year, we made a bet on a partner to be our channel to acquire new customer acquisition, and simply that deal is going below our expectations. So we were expecting to get more traction and more new partners on our platform through that partnership, which actually we announced last year publicly. At the same time, we see that the market is slightly changing with our -- we need to work on our products to have better product market fit. Because traditionally, we have the coupons or the deal type of product. What we see is that the market is moving towards a closed-loop transaction. When the product price, for example, is not visible directly on the website, you need to register or the offer is app-only. Because it's so easy now to find out what's the pricing and the big brands don't want to see different pricing on Groupon publicly versus what's, for example, on their website. So in this area, we are iterating our product with improvements on this closed-loop proposition so that we can serve more brands in this direction. And then maybe I would mention the reason why we are talking about the fact that it will take some time to compound the results. Enterprise is a long cycle. So when we start talking to the potential partner, the deal is not closed in a few weeks. You should think about it more as a negotiation process which takes several months to close, sometimes even quarters because sometimes they need to include it in their annual planning. Robert Brooks: Got it. That's helpful. And just that was something I wanted to double-click on too, is the closed-loop part. So if I'm understanding it correctly, it's essentially kind of not having the -- like the price of the deal listed just blankly, but you would have to like kind of create a Groupon account to then see the deal? Just want to make sure I'm... Dusan Senkypl: Yes. Robert Brooks: Okay. So that's -- all right. Dusan Senkypl: Yes. This is it. There will be several levels of the closed-loop because there are different requirements of brands on the market. We already have some experiments up and running in travel and in some other categories. There will be cases where the offer will be visible on the website, but you have to first register, which is pretty much one click right now using the single sign-on technologies. In some cases, we will get an information on the website, that in order to access the price for this deal, you need to install the application and you can get the deal in the application. Robert Brooks: Got it. And then just last one for me before going back to the queue, sticking with this enterprise stuff. You mentioned how you kind of reorganized that enterprise channel to align with vertical-focused category structure. Just wanted to get some color on how was the team structured previously. And is this new vertical-focused category structure, is that the same structure that has led to strong success in key cities like Chicago? Dusan Senkypl: It's similar structure. I would not say that it's same structure. But what we see across the board in Groupon, when we look on the -- any segment or category as one product, one Groupon product, it typically doesn't work because there is a lot of color for each category. The go-to-market in Things To Do in local experience is different than go-to-market, for example, in health and beauty categories. So we are doing exactly same stuff. We have the category GMs who have the industry knowledge. They typically also know the people within the industry. And then they are guiding the sales team how we should be approaching the product for a very specific category. In the local segment, we were incorporating this geography-specific know-how, which is not necessarily in enterprise, but the core idea behind it is exactly the same. We simply need to have very targeted, focused go-to-market for each category where we operate. The people who will be talking to our enterprise partners are people who understand the value proposition of Groupon in this specific category, not just some generic one. Operator: Our next question comes from Sean McGowan from ROTH Capital Partners. Sean McGowan: Maybe this is related to what you were talking about, but I'm interested in some color on what happened in travel. That seemed to be -- I mean, I know it's not a big category, but it seemed to be developing some positive momentum that was negative in the fourth quarter. Is that related to these enterprise comments you've been making? Dusan Senkypl: I would say that in travel, we have partnerships with very few brands which are making a big share of the travel revenue, which we generate. And travel for us right now is not the top priority and focus. So we still believe that Groupon has a position and play in this category, yet right now it's kind of not a central focus for new product features, new product developments. So this is related. Sean McGowan: Okay. Can you comment on what you're seeing in those European markets that you've referenced in previous calls that were kind of early in the adoption of some of the acceleration initiatives you've adopted, that you were seeing very good success in those markets? Can you comment on how those markets did in the fourth quarter? Dusan Senkypl: So we have very good performance across the board in international. On our international markets, we were implementing all the changes, and sometimes we were even frontiers in this, how to run the sales organization, how to be very diligent and the quality of the deal, going to the city level to find out what should be the next deal we sign in any given metro. In terms of technology, actually the U.K. was the first country where we implemented our CDP as a pilot project. And in Q1, we were able to migrate to new web interface, the new mobile next platform, which we are operating in United States, in most countries either fully or with like a high percentage of traffic. So from the perspective of sales organization, the international is running on the same level, in some areas and countries even better than North America. In terms of technology, we don't have the application in international yet. This will be Q2 and Q3 of this year. But we already migrated most countries to the new web interface. Sean McGowan: Okay. Last question is, for me for now, is on modeling. Is there anything in the SG&A figure in the fourth quarter that was kind of unusually low? Or is this a level we should expect? I thought it might be higher, which is good, but should we expect it to be at about this level? Rana Kashyap: Yes, Sean, I'll take this. This is Rana. Yes, SG&A did come in lower than we were expecting in Q4, and I do think there were some onetime benefits in SG&A there. And so I do not expect that would be, let's say, the new level. How we're thinking about SG&A right now, if you take a step back and look at where it was excluding D&A and excluding stock-based compensation, we're really looking for SG&A to be flattish year-over-year. And so we would encourage you to take more of the full year view as you think about SG&A for 2026. Operator: Our next question comes from Eric Sheridan from Goldman Sachs. Eric Sheridan: Great. Maybe 2, if I can. The first, a big picture one. With this new committee of the Board that's aimed broadly at AI as a theme, could you talk a little bit about how the management team, this committee and the broader Board will sort of work together in terms of formulating strategy, and then more importantly, implementing and investing against AI strategy looking out over the next couple of years? That would be the big picture one. And then the more model oriented one would be, you talked about some of the headwinds you saw in Q4 persisting into the front half of the year. Is there any way you can give us a sense of a bit of the pace and cadence of the headwinds dissipating as we get deeper into the year and how to think about some of the sequential dynamics as we progress through 2026? Dusan Senkypl: On the AI piece or AI Committee question, AI is right now number one topic for me personally as a CEO in Groupon. I see it as a huge opportunity for us on all possible surfaces and areas. We need to start internally with the team and then translate this also to our product and how we operate on the market. So I am personally very heavily invested in AI. I am meeting multiple people. And we formed a partnership with Amit, which is very close, in terms -- let's say, in the depth how we are cooperating. So Amit will be participating on discussions with management, sharing his vision, but also providing feedback on what we are creating. He will be providing feedback also on the level of management team AI fluency. And he will be participating on building the future AI-driven products and revenue streams for Groupon. So this is not just like a formal AI Committee which is a meeting once a quarter, but this is like a heavy focus, deep integration with Groupon management team. On the second question, the timing of those headwinds. We were talking on this call about the enterprise segment where the sales cycle is long. So it may take up to several quarters to get us to the same speed as we were in the past. At the same time, I would like to mention that when we are looking on the comps, it's mainly Q1 and Q2 where we have very challenging comps in enterprise segment. And then we don't have such tough comps in the second half of the year. In other areas of the headwind which we have which are owned channels, SEO and the managed channels, we implemented already the new CDP, which will help us fundamentally change the way how we are talking to our customers. And I expect that the benefits will start coming very soon. In SEO, it's a question on the timing because Google is under a lot of pressure from AI-generated content. So we are doing plenty of changes. I believe that long-term Groupon is positioned very well because we are one of very few players who own user-generated content because we have so many customers who are coming back to Groupon providing feedback about local merchants, about their experiences. So the content which we are collecting, but not yet fully using it, is very valuable. It will be very variable content for AI future because all this is extremely relevant for AI-generated answers on AI agents. But the timing is very hard to comment. Operator: We have a follow-up question from Bobby Brooks. Robert Brooks: So you guys have done a really good job of winning new customers, and that's been a trend over the last 4 quarters or so. And I understand that these new customers initially won't have -- don't have the same purchase frequency as legacy ones. But what I was curious to hear on is those cohorts of new customers that you won, say, in the first half '25, have you seen those purchase frequencies start to tick up? Or you've kind of found a way through kind of managed marketing to spur those purchase frequencies higher? Just curious to hear more on there. Dusan Senkypl: Yes. So my goal during this year is to improve the way how we are talking and communicating about the customers, cohorts and purchase frequency to our shareholders. We were mentioning in the script that we will have investors conference. And I believe that at that moment, we will be able to present much more simple and easier to understand the model for Groupon marketplace, including the consumer segments. But going back to your question, the purchase frequency is not related only to new and active customers and the structure of our portfolio, but it's also related to the category where the customer is buying. So for example, historically, the goods were quite a big and important channel for Groupon and the purchase frequency in this category is much higher versus purchase frequency in other categories. And as the goods, for example, is still declining, it's in a negative way, let's say, impacting our purchase frequency. We internally see some cohorts of customers, of loyal customers, who -- where we see the improved performance. We see in some segments improved conversion from first to second purchase. And this is internally one of the top priority areas for us. And with new CDP, we are finally having the tools to really target small individual segments and deliver them the deals and offers which are highly relevant for them. But like more consistent and more detailed communication on numbers and structure, my goal is to bring it to you in -- during this year. Robert Brooks: Got it. And then kind of piggybacking on that, the CDP and the retargeting managements that you're taking, could you maybe give -- provide a couple of examples of what that might look like? And secondly, I think some might hear the commentary on this and think it's something that has kind of occurred as the headwinds popped up in the fourth quarter. But this is something that you've just kind of been under -- that you guys have been working on for a couple of quarters, right? Like it's not just a response to the drop-off in organic traffic in the fourth quarter, right? Dusan Senkypl: No. The CDP is one of the foundational projects which we have in Groupon. And we were not really talking about it a lot. However, I see it one of the -- as one of the most important projects because it allows us completely a different level of flexibility. Groupon originally had the platform, which was in-house developed, it was 10-plus years old. And if our team decided we want to test some campaign, like for example, if you buy, I don't know, spa in your area, that we will send you a push notification 2 weeks, 3 weeks after, offering you something relevant as an upsell, let's say. It took weeks to implement it to our engineering team, and everything was done really very manually. With the new platform, it's all user interface. We can -- it's a drag-and-drop, we can decide what to do. And we could be running like 10-plus different campaigns every week or new campaigns and new experiments. And we can go much more granular in really user stories, what's relevant at which situation, meaning based on how you behaved on the website. If you visited the deal several times and didn't decide to buy it, then we can provide some specific better offer for the customer in terms of cases. It will also help us improve our paid marketing channels, because with new CDP, we know whether the consumer, for example, is reading our messaging. At that moment, we don't have a reason to spend money on Google, Meta and other paid channels to get that customer back and we can really target our retargeting campaigns only to customers where we see the customer is not communicating through our channel. So it really opens a lot of opportunities for us. And definitely, this is not a project which is just a reflection of what's happening in Q4. On SEO, it's similar story. That area is highly dynamic because with such a high availability of AI-generated content, there are many, many, many websites and projects which are just generating content and then trying to be presented on Google and visible on Google. Google obviously doesn't want it. So we are changing the rules. And all other websites which have highly relevant content, including Groupon, we just need to react to new rules and change the behavior. And what's very important for me, that underlying trend that Google is putting more and more focus on the user-generated content, on the original content. That's why the Reddit is, for example, ranking very well in SEO. And that's why we are doubling down on our reviews, which were kind of hidden in the past on Groupon, but now we are producing user-generated content for AI reviews, meaning like the AI summaries for reviews. We are generating FAQs and additional information, which is based on what our real customers told us about the merchants, which means this is the content which no one else has. Robert Brooks: That's super helpful color, Dusan. And maybe just the last one for me is on the kind of headwinds in the managed and organic channels. It seems like it's more kind of macro driven, like stuff, it's not like you were trying things and they didn't work. It's the SEO algorithms changing, and then when you go to Google, instead of seeing 2 ads, you're seeing 8, right? Am I thinking about that more or are there some -- was there something internally that you felt you could have done better with that piece? Dusan Senkypl: Yes. So I think we always can do our work better, and you can ask me about any area and I will have exactly the same answer everywhere. However, this is driven originally by the macro situation and the change in this landscape, which is happening for everyone. And I just consider Groupon to be lucky that we have an answer which fits into AI world with this user-generated content. Robert Brooks: Congrats on the Entrepreneur of the Year from EY. That's awesome. Dusan Senkypl: Appreciate it. Thank you. Operator: We'll now pose written questions to management that came in through the company's Investor Relations press line. Analysts who are live on the call, we will continue to move back to you. Our first written question, you talked about setting a new baseline for agentic AI first leadership across the company. Can you talk about what that means concretely for how your teams are working today? And what kind of productivity gains are you seeing, specifically in engineering? Dusan Senkypl: Okay. So I'm very closely following and having meetings with people who I consider AI frontiers in terms of what AI enables across the board. And I see major shift happening last few months where originally most of us, including me, were using AI as a chatting tool, let's say, and I was discussing all my projects, I was asking for feedback. However, I see that this is changing fundamentally. And we right now are seeing much more use cases in the agentic-based approach, which is driven by Claude Code and similar solutions. And I am personally very heavy involved in this. I have my own agentic setup, which is reading all my data, which is doing all the preparations for the meeting. When I'm -- new topic, it's like really deeply analyzing the market opportunities, coming with solutions. And all that using all the data which we have available. So I think it's a complete mindset shift. And this is what we are trying to -- or not trying, this is what we are doing right now and implementing in Groupon. I want to have all the teams here to be AI-first. In engineering, for example, my goal is that we have 100% of the code written by AI by the end of the year. I want to make Groupon a company where all our employees are managers because we will be managing AI agents or orchestrating them, deciding how and where we will improve. So it's a big change. I see that it can bring, obviously, higher efficiency, but it will allow us to do much more in the product, in engineering; in sales, provide completely new tools and interfaces to merchants. So I'm extremely excited about this. This is really the project number one for me right now in Groupon. And what we see when I take the best AI frontiers who are working in Groupon and look on workflows, it's really completely a different world. I think the world where people were specialists in some area is really over -- or maybe not over realistically because it's still the case. But people who are frontiers don't operate at this mode. We are more like generalists, and they start with understanding the customer, then definition of the product, building the demo version of the product so that other people can look at it, but they continue also with engineering. So in the future, I don't expect that we will have a product team. And then the engineering team, I expect that we will have like builders. And all people in this structure will be able to start from design and with delivery of the product, which would allow us to really 10x and maybe even more delivery of product features, improvements to our customers. And I see that with individuals. This is what right now we are implementing in whole management team. We have a very high expectation here because it's such a great pleasure to work with people who switched into this AI-first mode in terms of productivity, how great ideas they have, and that they don't have to do the, let's say, the boring part of the work. Operator: We'll go back to Sean McGowan from ROTH Capital. Sean McGowan: A couple of follow-ups. Could you comment on what you're seeing -- what trends you're seeing in the redemption rates? You made that effort last year to kind of remind people when they had Groupons expiring, and that had an effect on the redemption rate. What are you seeing currently year-over-year and what do you expect? Dusan Senkypl: So I don't right now have the exact specific numbers in mind, but the overall trend in redemption was continuing in the same pace. So this is one of the numbers where the product teams are making sure that the deals have good redemption rate, that customers really get the experience. We are trying not only to send these reminders, which we were talking about, but now we are much more actively also asking for feedback, so where we can improve the deals or even provide the feedback to merchants. So it's part of the core marketplace proposition. We don't see any like significant changes there. It's just going in the right direction. Rana Kashyap: And Sean, this is Rana. Just to echo what Dusan said, we see trends very stable-ish. And so like in terms of how it was impacting take rates in 2025, we expect the impact to take rates from higher redemption rates to be very modest. It's mostly through our numbers now. Sean McGowan: Okay. That's what I thought. And then on marketing plans, I think you had talked last year about leaning in a bit more to marketing Groupon as a brand. So can you talk about your expectations for marketing spending as a percentage of revenue or as a percentage of whatever metric you want? Rana Kashyap: Dusan, do you want to talk about the brand and I can talk about the number? Dusan Senkypl: You can start with numbers and then I can follow up with brand. Rana Kashyap: Yes. So in terms of numbers, Sean, we have -- we are -- our expectation is that marketing will grow year-over-year, call it, in the high single-digit range. So we are expecting marketing to -- we do want to support the business with marketing spend, and we are expecting that marketing spend growth will be a little faster than revenue growth. However, this -- the relationship between our marketing spend growth and our revenue growth, that relationship will improve versus what we had in '25. Our focus here over time is to grow contribution profit dollars. And this year, we expect to make progress against that. So in terms of your model, I would expect that marketing will grow high single digits year-over-year. Dusan Senkypl: And I would follow up in terms of our brand campaign, which we started in the second half of Q4 last year. The main motto is Turn Your Life On, which is like highly relevant to the mission which we have as Groupon to get as much people off-line. And we see some really interesting results, which are different based on the location when we were running the campaign, because we were making sure that we will be able to collect the data on the geo levels. So we still run the campaign in -- not in huge numbers, but we are still running the brand campaign in Q1, and I expect that we will continue. But we are processing and improving our density commercial model to understand the behavior of customers in individual locations. Because in some cities, we saw some incredible response on the brand campaign versus in some cities we got pretty much what is the baseline on the baseline expectation of the marketing campaign on the market. So we want to double down and understand better where and how to spend the brand marketing dollars or where and what is the driver of that behavior, so that we can replicate the offers and inventory which we have in cities where the response to the Groupon brand campaign looks like super positive. Operator: Another written question that came in. Can you talk about the new mobile app migration? You're now at 50% of iOS in North America for users on the new platform with stronger monetization. What should we expect as you complete that rollout? Dusan Senkypl: So right now, the migration on a new platform takes a lot of resources within the product and engineering team. And as we are very close to finalizing this migration, all that capacity will be focused on improved user experience, focused on improving purchase frequency for our customers. And this will be delivered through new functionality. We were, however, talking here on this call that we have the bets around search and relevance, about personalization. The team is really digging deep into behavior of customers, splitting the customers into multiple groups based on how they behave in the app and on the website. And we will be building the features which will be specifically targeting these customer groups, so where we provide better offers, better, easier interface. So I'm really looking forward to this space. Some demos and prototypes which I saw are really incredible and I believe that it will improve significantly customer experience, and this will be one of the drivers for improved purchase frequency for us. Operator: Another written question that came in. You've made a number of leadership additions recently, including a new Chief People Officer and an SVP of Operations and Consumer AI. Any commentary on the additions? And how are you thinking about the team and talent you need for the next phase of growth? Dusan Senkypl: So when I joined Groupon, one of our main problems and issues which we had, excluding the internal financial situation, was that we were not able to attract new talent. And I'm very happy right now to state that I see that we are able to hire, that we are able to attract really talented people from great companies. I see that we are really raising the bar not only within the management team, but overall within the Groupon organization, on what's expected. And I was talking about the AI expectations a few minutes ago, but this is across the board. And this is thanks to the new joiners who are really challenging us, like asking us to try different ways, move faster, move with higher quality at the same time. So overall, I see great progress and I really see Groupon in a very different situation versus just a few years ago -- even just 12 months ago. Operator: Thank you, Dusan. There are no other questions. This concludes our call for today. Thank you, everyone, for joining. For additional information, please go to investor.groupon.com. Before you buy stock in Groupon, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Groupon wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Groupon (GRPN) Q4 2025 Earnings Transcript was originally published by The Motley Fool