Groupon Inc Plunges On Guidance, Revenue Misses

Groupon Inc Plunges On Guidance, Revenue Misses

Groupon Inc (NASDAQ:GRPN) released its latest earnings report after closing bell, posting earnings of 1 cent per share on $751.6 million in revenue, a 23% year over year increase. Analysts had been expecting earnings of 1 cent per share on $762.07 million for the second quarter.

GAAP losses per share were 3 cents.

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Breaking down Groupon’s earnings

The daily deals giant reported $1.82 billion in gross billings, which was a 29% increase year over year. In North America, Groupon’s billings rose 12%, while in Europe, the Middle East and Africa, the company’s billings remained flat. The rest of the world saw a 145% increase in billings due to the acquisition of Ticket Monster, which closed during the first quarter.

Groupon reported a 12% increase in revenue from North America and a 42% increase in revenue from Europe, the Middle East and Africa. The company also reported a 40% increase in revenue from the rest of the world.

Gross profits rose slightly from $384.7 million last year to $389.9 million in the second quarter of this year. Adjusted EBITDA was $59.1 million, a significant decline from $80.5 million in the same quarter a year ago. Groupon said the difference was expenses related to the acquisitions of Ticket Monster and ideeli. The company also spent more on marketing in the quarter.

Groupon sees growth

Groupon reported a 79% year over year increase in global units, including an 8% increase in North America, a 10% increase in Europe, the Middle East, and Africa, and a 342% increase in the rest of the world. At the end of the quarter, the company had 240,000 global deals, compared to over 200,000 at the end of the previous quarter. North American active deals made up a little less than half.

The number of active customers rose 25%, while customer spending per average active customer rose from $132 in the previous quarter to $137 in the June quarter. Mobile mix was still more than half of Groupons business, hitting a new high.

Groupon misses on guidance

For the current quarter, Groupon expects revenue to be between $720 million and $770 million. The company is projecting adjusted EBITDA of between $50 million and $70 million and non-GAAP earnings of between 0 and 2 cents a share. That guidance was lower than analyst estimates at 3 cents per share  and revenue of $760 million for the third quarter.

Groupon also revised its full-year guidance, now projecting more than $270 million in adjusted EBITDA.

In addition, the company announced that it has secured a three-year $250 million revolving credit facility. It stated that it currently has no plans to draw on that facility but that it will add flexibility to its balance sheet.

During the second quarter, Groupon also bought back more than 17.2 million Class A shares for an average of $6.15 per share, spending $106 million on share repurchases.

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