Groupon Q2 2025 Earnings Report

Groupon EPS Results

• Actual EPS: $0.46
• Consensus EPS: -$0.02
• Beat/Miss: Beat by +$0.48
• One Year Ago EPS: N/A

Groupon Revenue Results

• Actual Revenue: $125.70 million
• Expected Revenue: $122.46 million
• Beat/Miss: Beat by +$3.25 million
• YoY Revenue Growth: N/A

Groupon Announcement Details

• Quarter: Q2 2025
• Date: 8/6/2025
• Time: After Market Closes
• Conference Call Date: Thursday, August 7, 2025
• Conference Call Time: 8:00AM ET

Groupon (NASDAQ:GRPN), together with its subsidiaries, operates a marketplace that connects consumers to merchants. It operates in two segments, North America and International. The company sells goods or services on behalf of third-party merchants. It serves customers through its mobile applications and websites. The company was formerly known as ThePoint.com, Inc. and changed its name to Groupon, Inc. in October 2008. Groupon, Inc. was incorporated in 2008 and is headquartered in Chicago, Illinois.

Groupon Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: The company reported 12% year-over-year global billings growth, with North America local up 20% and international local up 15%, keeping it on track to exceed 20% billings growth by FY27.
• Positive Sentiment: Groupon generated $25 million in positive free cash flow and completed a proactive refinancing to simplify its capital structure and enable more offensive use of capital.
• Positive Sentiment: Traffic from AI-driven search, though still small, is growing at a double-digit rate monthly—management sees it as a meaningful tailwind and is investing in platform and AI partnerships.
• Positive Sentiment: The company raised its full-year billings guidance to 7–9% growth (up from 3–5%), citing strong momentum and multiple levers for long-term value creation.
• Neutral Sentiment: Effective September 1, Yuzhi Ponnarat will become COO and Rana Kashyap will step in as CFO, highlighting management’s focus on internal leadership development.

Presentation

[Dusan Senkypl, CEO & Director at Groupon]

Hello, and thanks for joining us for our second quarter two thousand twenty five earnings call. It's a pleasure to be with all of you. Yesterday, after the market closed, we released our earnings and posted our earnings commentary on our investor relationships website. Today, my plan is to make brief opening remarks and then open up the call for questions, both live from our analysts and several that were presubmitted in advance. For more details on our quarterly performance, I encourage you to read our earnings commentary.

[Dusan Senkypl, CEO & Director at Groupon]

In addition, I encourage you to review our press release and 10 Q, which contain more detail on our fourth quarter and full year results. I'm pleased to report another strong quarter of accelerating growth. Global billings grew 12% year over year, marking continued acceleration in our growth trajectory. This was driven by strong performance in our core local category with North America local billings up 20 year over year and international local billings, excluding Italy and GiftCloud, up 15% year over year. Combined, our core local category excluding Italy and Gift Cloud grew 19% and now represents nearly 90% of our billings.

[Dusan Senkypl, CEO & Director at Groupon]

This validates the scalability of our marketplace transformation playbook and keeps us on track toward our target of accelerating global billings growth to over 20% by 02/1927. We generated strong positive free cash flow of 25,000,000, demonstrating our ability to drive profitable growth while investing in our platform and team. We also announced a proactive refinancing that meaningfully simplifies our capital structure and eliminates constraints, putting Groupon in a position to play offense. Our hyperlocal strategy continues to deliver strong results. Our North America enterprise brands had an exceptionally strong quarter with 26 brands generating over 1,000,000 in quarterly billings, representing 53 year over year growth.

[Dusan Senkypl, CEO & Director at Groupon]

North America things to do delivered strong double digit growth for the sixth consecutive quarter, demonstrating market leadership during the crucial summer season with particular strength in amusement parks, parks, water parks, and multi attraction tour passes. On the leadership front, I'm excited to announce that effective September 1, Yuzhi Ponnarat will assume the role of chief operating officer, and Rana Kashyap will become our next chief financial officer. Both have been instrumental in our transformation since joining in early two thousand twenty three, and these changes reflect our commitment to developing leaders from within as we build toward our next chapter of growth. Looking ahead, we are raising our full year billings guidance from three to 5% to seven to nine growth, reflecting the strong momentum we are seeing across our business. We see multiple levers driving accelerating growth and remain confident we are building the foundation for sustained long term value creation.

[Dusan Senkypl, CEO & Director at Groupon]

We are still in the early innings of a large opportunity to build a hyper local experience marketplace that combines trust, curation, quality, and unbeatable value with the network effects and unit economics of modern marketplaces. I would like to thank our team for their dedication and hard work that have made this progress possible. This journey has not been easy, and their continued commitment to our mission and to our transformation has been really great. With that, let's open the call for questions.

[Operator]

Thanks, Dushan. Our first question is from Sean McGowan from Roth Capital Partners. Sean, you can now unmute your line.

[Sean McGowan, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Hi. Can you hear me okay?

[Operator]

Yes. We can.

[Sean McGowan, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Great. Thank you. You mentioned in the commentary that you issued yesterday that you're seeing, you know, AI generated traffic or searches. Can you just elaborate a little bit more on that? Is that incremental you think you're getting, like, incremental traffic and business from that?

[Sean McGowan, MD & Senior Research Analyst at Roth Capital Partners, LLC]

And, you know, what is it that makes that more valuable?

[Dusan Senkypl, CEO & Director at Groupon]

Mhmm. Thank you, Sean, for for the question. Based on how we currently review, we believe that the traffic coming from AI is more as an incremental. And I really see AI traffic as a as a tailwind to to us. We are spending a lot of resources on building the platform in a way that we are a great partner for AI driven companies.

[Dusan Senkypl, CEO & Director at Groupon]

I'm a big believer that the traffic is moving and people are changing behavior and will they will be using AI more and more. And I actually see Groupon positioned very well in this because we have a very, very unique offer, and we can be a gateway for for many merchants to be part of this AI economy as as to call it. And, yes, we are we are growing with pretty much zero base last year because this is extremely developing. But overall, we see it as a as a positive trend with really very, very strong double digit growth every month. At the at the same time, this is a new field, which is not always easy to measure, and there are no, like, standards in general.

[Dusan Senkypl, CEO & Director at Groupon]

So we see on the market various numbers from different types of companies. So I would like to emphasize that still it's it's small part of our traffic, but it's it's it's the type of traffic which we believe will will grow significantly and will grow also in terms of impact on overall Groupon performance.

[Sean McGowan, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Thank you. Do do I have a chance to ask another question at this point? I don't what to do with this. Yeah. Yeah.

[Sean McGowan, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Okay. If you can talk a little more generally about the efforts that you've been making over the last couple of years to get merchants more engaged and, you know, to see more repeat business. You know? Can you talk a little bit about progress there?

[Dusan Senkypl, CEO & Director at Groupon]

Yeah. So, you know, we are talking about the merchant relationship and the way how we are doing the sales pretty much since since I joined joined the Groupon, and we are we have different views and different angles how how we are looking at it. But in general, I I consider Groupon, like, an amazing platform for for merchants in general because we are performance based platform. So which means that we are getting paid only when when merchants are getting paid, and this is very important when you are advertising on our platforms. Typically, you have to pay for traffic, and then you hope that you will be able to optimize.

[Dusan Senkypl, CEO & Director at Groupon]

So in general, our long term positioning is is very strong with with merchants. We are still in the process of transformation of our Salesforce to to be partners to to merchants. We are now looking on Groupon not as a one marketplace when one size fits all, but internally, are talking about, like, triple digit number of micro categories on on Groupon. We want to understand, one by one, understand how the economy for merchants works, and then the web partners and helping them to create campaigns, which will make sense both for merchants, but also also for for marketplace. And this this applies actually across the board.

[Dusan Senkypl, CEO & Director at Groupon]

I we were in our commentary talking about very strong performance in the national enterprise segment. And what I was describing works both with small businesses, but at the same time, it it works with large national enterprise partners where sometimes the discussion is even easier and faster because they they really understand performance. They understand how much they are paying with with other marketplaces or advertising platforms which which they are using. And when we understand their needs, then we can be great partner for them. Also, I would say that in last twelve months, we made huge progress on understanding what's going on on the platform.

[Dusan Senkypl, CEO & Director at Groupon]

So right now and we are starting with these, like, large partners. We can come to them and explain and show them what what the data are showing about the incrementality of the business, like, whether customers coming from Groupon would come to where either websites or properties without Groupon or not show them the behavior, how they were making the decision process. And these data are actually very positive for in in in the way how we are presenting and showing Groupon value, and then it helps us grow the business with merchants more.

[Sean McGowan, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Thank you. I'll jump back in the queue.

[Dusan Senkypl, CEO & Director at Groupon]

Thank you.

[Operator]

Our next question comes from Bobby Brooks from Northland Capital. Bobby, you can now unmute your line.

[Bobby Brooks, VP & Senior Equity Research Analyst at Northland Capital Markets]

Hey, good morning, team. And first, just want to congratulate Ron on moving to the CFO role and Yuri taking over the COO role. So kind of piggybacking on the AI questions, it was really interesting to hear that the AI powered search has shown strong strong signs of growth, albeit off a small base. But two part question. First, of that notable growth that you've seen so far, is that mostly just these AI search engines sort of organically picking up your deals, or have you made intentional enhancements to your listings to try to pick up this traffic?

[Bobby Brooks, VP & Senior Equity Research Analyst at Northland Capital Markets]

And then second, just wanted to hear how you plan internally to further accelerate that traffic coming from this channel.

[Dusan Senkypl, CEO & Director at Groupon]

Yeah. So, internally, we are looking on AI together with SEO because as as as you know, Google is significantly changing the the behavior of the search result pages, how we are looking, and put in more and more content and keeping the people much more on their website versus sending them to us. So what we see in SEO that is that we have pretty much a a steady steady performance, which actually is a great win because there are plenty of companies which are really facing headwinds right now because the traffic goes down. What we see is that we have a a declining traffic. However, people are making and spending a little bit more time in decision making on Google, for example, and then coming to to Groupon, and they have simply higher conversion.

[Dusan Senkypl, CEO & Director at Groupon]

So in in SEO part, which also partially includes AI through these AI snippets, we are holding holding study, which which I consider great results. And then we see the part where people are starting their search in AI engines, being it Perplexity, OpenAI, and others. And we are investing into our platform so that Groupon is providing proper results so that they can directly link us as a source through the recommendation, and you would be discussing what I can do with my kids over the weekend that Groupon Groupon is included. And this part is growing, and I see this trend of moving people towards AI search as as very strong, and it it just accelerates. And how we look at it from the midterm and long term perspective, yes, we are investing into our platform so that our platform is a good citizen and partner in this AI world.

[Dusan Senkypl, CEO & Director at Groupon]

We plan to be part of the pilot program, for example, with OpenAI so that in as they will be developing their product, it will be even possible to book Groupon experiences and deals directly through AI agent. And this is the, in my opinion, the direction where AI is heading. It will take some time, but I expect that it will be really, like, an executive assistant for people where they will be using voice, talking, discussing with AI what to do. And ecommerce players who want to be really playing important part in this ecosystem need to support it so that it's easy for AI platform to do the booking, do the orders, and find all the relevant information. And this is one of the internal focuses of of Groupon to to play really well.

[Dusan Senkypl, CEO & Director at Groupon]

And maybe last remark on this. I believe that we are positioned very well also from the perspective that we have unique inventory. There are many companies which pretty much have commodity inventory which you can buy on other places, but Groupon has unique deals which are not available anywhere else, typically, on the Internet. And in this point, it's it's a major, major advantage for us to be even, I would say, preferred partner for AI companies in certain segments.

[Bobby Brooks, VP & Senior Equity Research Analyst at Northland Capital Markets]

Awesome. Appreciate that detail. And and just to confirm, so it seems like the uptick in traffic that you've seen so far is sort of a mix of just organic and and enhancements that you've made to the platform?

[Dusan Senkypl, CEO & Director at Groupon]

I I would say that in SEO, we have, we can, let's say, maintain, our numbers because of new platform which we have, which is able to provide better and better results from Google. And then there is the part focusing on what you can get internally in CheckGPT and others, which is, I would say, additional technological development, which our platform is capable of providing right now. And that part is is the growth which we were talking about in our commentary. This part, although starting with very low and small base, it's it's growing 50% month over month.

[Bobby Brooks, VP & Senior Equity Research Analyst at Northland Capital Markets]

Got it. And then the next one for me is you you guys talked about how you mentioned, yeah, over 200 microcategories within the North American local segment where you feel you can execute your go to market strategy. Could you just provide some context on that? Like, maybe what would be helpful is how many microcategories did you feel you successfully pursued within second quarter that were resulted in that were reflected in second quarter results?

[Dusan Senkypl, CEO & Director at Groupon]

So we are we are trying to improve across across the bar. However, it will be a long term process, and we were mentioning that we are really in the beginning in in many areas that we see that if we do a deep dive, we have a category manager in in some segment, and we really understand merchants. We understand their economy. We understand really in-depth what customers are asking for, then it allows us to accelerate. So so we have several categories, and I believe we were mentioning, for example, the airport parking.

[Dusan Senkypl, CEO & Director at Groupon]

We we were mentioning categories which maybe you would not expect on Groupon, like, exchange, for example, where we work very closely to to have proper supply on one side. But at the same time, we are into product. And, again, thanks to the better platform, which we have now available, we can start customizing the user interface so that it includes features which are important for decision making process. To give you a very simple example, there are categories where image is not important at all. When you are, for example, deciding on the oil exchange, the picture is very small part of the decision making process while there are categories where simply you need to know how the place where you will go looks like, how it will be, the feelings, emotions.

[Dusan Senkypl, CEO & Director at Groupon]

So we are able to go on that level both with merchants, but right now also with the consumer to customize the user experience. And it will be this will be pretty much never ending process. Like, there are many marketplaces which really focus on one category, and it's it's much easier for them. We have, as I said, right now internally, our structure shows 200 categories. This is by far not the final number.

[Dusan Senkypl, CEO & Director at Groupon]

We may end up with less less or or more, but it will take time really to go deeper and deeper. We have several categories which we preselected and focus on them to prove the concept, which where we we have very good results. But then we will probably improve pretty much each of them to certain level and do iterations.

[Bobby Brooks, VP & Senior Equity Research Analyst at Northland Capital Markets]

Awesome. That's super helpful. And then just one last one for me. With the refinancing that you guys did intra quarter, that obviously allows you to step back into your buyback. Just curious to hear any thoughts on when that might make sense for you guys to do it or just maybe triggers that you would be looking for to then step into, start to repurchase shares.

[Dusan Senkypl, CEO & Director at Groupon]

So, like, the maybe I can I can take this one, Angie, is that I look at this through the lenses of value value creation? So we are here, and our main responsibility is to to grow value for for our our shareholders. I believe that we are in very good position, and we want to maintain going forward optimal and resilient balance balance sheet. And right now, I see two areas which we are looking into it. First, as you mentioned, is share repurchases.

[Dusan Senkypl, CEO & Director at Groupon]

Right now, we have an existing share buyback authorization in place, which has 245,000,000 available for repurchases. And while buy buybacks will always remain an important consideration, we will deploy capital here only when it represents really highly attractive use of funds. The second part to to the story are m and a opportunities. During my career, I I led, like, dozens of acquisition, and I understand both the opportunity and the risk associated with inorganic strategies. And while we will remain open to strategically aligned acquisitions that enhance our market position and capabilities, we will do it only with discipline to make sure that it brings brings value.

[Dusan Senkypl, CEO & Director at Groupon]

So these are both share repurchases and m and a opportunities are is something which we are looking into very, very deeply, and we want to make right decisions here.

[Bobby Brooks, VP & Senior Equity Research Analyst at Northland Capital Markets]

Appreciate the call. I'll return to the queue. Congrats on the

[Operator]

Thank you, Bobby. Looks like we have a follow-up question from Sean. Go ahead and unmute your line.

[Sean McGowan, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Yeah. Thank you. I appreciate that. Any update on on the progress you've made in kind of reengaging the cohort that you felt like you lost, you know, late last year in the in the tech conversion?

[Dusan Senkypl, CEO & Director at Groupon]

We we my answer would be very similar to what we were answering last last earnings. We we don't publish any specific numbers, but based on the overall results of the company, you can see that we were able to achieve some meaningful meaningful improve improvements here. Overall, we are very happy both with the acquisition of new customers and growth of new customers, but also the the cohort of existing customers is is performing well.

[Sean McGowan, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Okay. Thank you. If I can ask a a a couple of questions about Italy, does this settlement with Italy put, you know, in your opinion, a final end to that whole thing? I know there are are there any other, you know, countries kinda looming in the wings there that might have something to say? And would you rule out restarting the business, the local business in Italy now that this tax thing is settled?

[Jiri Ponrt, COO at Groupon]

Thank you, Sean. I will answer that. So first of all, the settlement is or agreement is now, on a verbal agreement. It's not binding. It has to go through, various approvals, through various statutory bodies in Italy.

[Jiri Ponrt, COO at Groupon]

But if it's approved, then yes. It is it means that our troubles in Italy about these two cases, text cases from 2012 and 2007 seventeens are over. And then to your second questions, if we will be thinking about reopening Italy, Generally, what we see, we see that we are doing very well in international business, which was not the case in a couple of quarters ago. And so, certainly, we will sync all options including, reopening it up.

[Sean McGowan, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Okay. Thank you.

[Operator]

Thank you, Dushan. We will now move to written questions. A question for Dushan. You may have answered a bit of this already. Which initiatives are spurring most growth?

[Dusan Senkypl, CEO & Director at Groupon]

I don't see it as one, single initiative. Like, I know that, there are many people who, love love this question, and I'm, like, answering it in the same time in the same way for for last two years. This is plenty of smaller initiatives which simply add up together, and this is done by the complexity of Groupon and number of verticals, which I was talking about today in this in questions regarding the my microcategories where simply we need to take it one by one. And I I think in the past, when the group company tried to have, like, one size fits all approach, I don't think it was the right strategy. But I can I can simplify it into the three parts of of which are pretty much most important on for each marketplace?

[Dusan Senkypl, CEO & Director at Groupon]

On on demand side, we have a new platform, mobile next powering plenty of our traffic. We were able to improve the platform so that it's running and supporting our marketing activities. So new platform and marketing engine behind it is is big enabler of what we are doing and the results which which we are achieving right now. And that marketing engine, it's not just the performance marketing, but pretty much all all channels. We were discussing today SEO and AI, which are a tailwind for us versus headwind for many other companies.

[Dusan Senkypl, CEO & Director at Groupon]

But at the same time, we are able to do huge progress in marketing in display display marketing. We are growing and doing plenty of not only experiments because we we have very significant traffic already coming from the associates with influencer marketing. So we are moving here thanks to the platform and the marketing engine up in the in the funnel, and that's why we were talking about the plan to q four and q one next year, the small small brand campaign. Then on the supply side, there were several questions to this. I see the the way that every quarter, we we are getting better and better in in smaller steps in managing supply side, and I'm answering it in very wide open way by by talking about managing supply side means understanding who are the merchants which we need to get on the platform, how the deals which we need on the platform should look like?

[Dusan Senkypl, CEO & Director at Groupon]

What is the value which we should be providing as a Groupon? And there are multiple strategies. It's like micro category approach to to understand risk businesses and profitability. However, also, last several earnings calls, I was talking about this hyper localization strategy where the teams are focused on smaller areas. They understand it.

[Dusan Senkypl, CEO & Director at Groupon]

So it's this is a mix on the supply side of both these approaches. And then for last year, we were fighting with multiple headwinds from our platform migrations, and it was a huge lesson for for me, for the whole company, I believe. And this year, we do much better, and we focus on mitigating impact and making sure that whatever we do, it takes longer than what I would love to see. But at the same time, the platform is not causing causing headwinds, which we were fighting last last year.

[Operator]

Thank you, Deshaun. Looks like we have a follow-up question from Bobby Brooks from Northland. Bobby, please unmute your line.

[Bobby Brooks, VP & Senior Equity Research Analyst at Northland Capital Markets]

Hey. Thanks for letting me jump back on. Just a quick one. And I just I just feel like it might be helpful to remind the investment community of the dynamic between billings growth and revenue growth and and how you see those two starting to converge here over the next few quarters. Could you could you just remind us on that dynamic?

[Jiri Ponrt, COO at Groupon]

Yes, Bobby. So you what you see is that we are growing, especially in local business, billings much faster, versus revenue. This gap, it's very similar to what we described in the previous quarters. Roughly half of that is related to our, take rate and, oh, sorry, to our redemption, which input influence take rate, which is our people are really enjoying, our deals, and we are proposing and, and pushing them to do it because we believe that the and we see it on our data. If the customer is using, and redeeming our voucher, it's, it's increasing, their lifetime value because they are coming back to our platform, buying new deals, and they are becoming our loyal customers.

[Jiri Ponrt, COO at Groupon]

So, this is one part. Second part is a mix of take rates, due to our increased enterprise, deals. And, also, you know, that we had very good things to do season, which is generally, the line of business which doesn't have such high take rates as, for example, house and beauty or other other categories. So on those two factors, higher redemption and mix of categories and mix of enterprise versus core local is what's contributing to the difference between our billings and revenues.

[Bobby Brooks, VP & Senior Equity Research Analyst at Northland Capital Markets]

Got it. That thanks. That's helpful.

[Operator]

If 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.

Participants

Executives

• Dusan Senkypl, CEO & Director
• Jiri Ponrt, COO

Analysts

• Sean McGowan, MD & Senior Research Analyst at Roth Capital Partners, LLC
• Bobby Brooks, VP & Senior Equity Research Analyst at Northland Capital Markets