Groupon, Inc. · NASDAQ:GRPN
Groupon — Q3 2019 Earnings Presentation
21 slides from Groupon's earnings presentation, Nov 5, 2019
Slide 1: 3Q19 Earnings
3Q19 EARNINGS November 5, 2019 NASDAQ: GRPN / [email protected]
Slide 2: Forward-Looking Statements
Forward-Looking Statements The statements contained in this presentation 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, and Section 21E of the Securitie
Slide 3: Groupon Is a Clear Leader in Local E-commerce
Groupon Is a Clear Leader in Local E-commerce CONNECTING 45M CUSTOMERS TO HUNDREDS OF THOUSANDS OF MERCHANTS • Two-sided marketplace with massive scale and a household name Top 5 >75% synonymous with value & discovery • More than 1.5B Groupons sold across E-commerce Of Transactions 1M+ merchants to
Slide 4: Executing on Our Key Priorities
Executing on Our Key Priorities PAVING THE WAY FOR THE NEW GROUPON Customer Experience Open Platform Enhance the customer experience Extend Groupon's open platform by and increase conversion by expanding supplementing Groupon-sourced frictionless technologies, such as inventory with third-party card
Slide 5: Unlocking the Potential of our Financial Model
Unlocking the Potential of our Financial Model PAVING THE WAY FOR LONG-TERM, PROFITABLE GROWTH Focus on driving long-term Gross Profit growth • Expect increases in Gross Profit per customer to offset a meaningful portion of an anticipated Gross Profit decline in global customers in 2019 • Drive incr
Slide 6: 2019 Adjusted EBITDA Guidance
2019 Adjusted EBITDA Guidance 2019 Guidance • Expect traffic headwinds to persist in Adjusted EBITDA1 2019 (USD millions) • Key initiatives focused on conversion, purchase frequency, and Gross Profit 2018 2019 per customer growth Actual Guidance • Continue to deliver operational efficiency $270 $270
Slide 7: Financial Information and Operating Metrics
FINANCIAL INFORMATION AND OPERATING METRICS 7
Slide 8: Large Customer Base with Solid Gross Profit / Customer
Large Customer Base with Solid Gross Profit / Customer Global Active Customers1 (millions) Global TTM Gross Profit / Active Customer1 $27.51 $27.42 $27.59 $27.51 $27.45 48.8 48.2 47.2 46.2 45.3 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 Gross profit per customer flat year-over-year in Q3 2019
Slide 9: Consolidated Gross Profit
Consolidated Gross Profit (USD millions) North America International Global (16)% $248 $118 y/y (9)% $366 y/y (6)% y/y $102 $96 $94 $306 $306 $292 $210 $86 $278 $204 $199 $192 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 ex-f/x (12)% (8)% Global gross profit of $278 mil
Slide 10: North America Gross Profit
North America Gross Profit (USD millions) NA Local Gross Profit NA Goods Gross Profit NA Gross Profit $56 (6)% (3)% $248 y/y y/y $180 $210 (15)% $204 $199 $159 $161 $158 $192 $155 y/y $33 $31 $28 $26 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 North America gross profi
Slide 11: International Gross Profit
International Gross Profit (USD millions) International Local Gross International Goods Gross International Gross Profit Profit Profit $80 (15)% y/y $72 $69 (16)% $66 $118 y/y $61 $102 $96 $94 $86 $28 (20)% y/y $22 $19 $20 $17 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q1
Slide 12: Marketing - Invest At 12-18 Month Payback
Marketing - Invest At 12-18 Month Payback Marketing + Order Discounts (USD millions) Incremental Marketing ROI = Gross Profit Incremental = 100% Marketing Spend (3)% y/y $159 Time to $140 $145 $146 $136 1 Payback 12 to 18 months $49 $47 $52 $57 $61 • ROI tracking across marketing channels, platforms
Slide 13: SG&A – Benefiting From Operational Efficiency
SG&A – Benefiting From Operational Efficiency (USD millions) SG&A SBC2 and D&A (1)% y/y $54 1 $27 $210 $210 $46 $201 $195 $198 $44 $44 $43 $26 $29 $29 $28 $27 $20 $15 $16 $14 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 SBC D&A Global SG&A declined by $3 million or 1% year-over-year in Q3 (1) E
Slide 14: Attractive Adjusted EBITDA and Free Cash Flow Generation
Attractive Adjusted EBITDA and Free Cash Flow Generation (TTM, USD millions) Adjusted EBITDA1, Operating Cash Flow excluding Free Cash Flow excluding IBM settlement2, 3 IBM settlement3, and Capital Expenditures $270 $270 $264 $163 $254 $248 $233 $138 $205 $126 $194 $175 $106 $160 $93 $69 $70 $67 $66
Slide 15: Appendix
APPENDIX GROUPON |
Slide 16: Non-GAAP Reconciliations
Non-GAAP Reconciliations1 ADJUSTED EBITDA - QUARTERLY THE FOLLOWING IS A RECONCILIATION OF ADJUSTED EBITDA TO THE MOST COMPARABLE U.S. GAAP PERFORMANCE MEASURE, “INCOME (LOSS) FROM CONTINUING OPERATIONS”: (in thousands) 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Income (loss) from continuing operations
Slide 17: Non-GAAP Reconciliations Cont'd
Non-GAAP Reconciliations Cont’d EXPECTED ADJUSTED EBITDA RANGE THE FOLLOWING IS A RECONCILIATION OF THE COMPANY’S ANNUAL OUTLOOK FOR ADJUSTED EBITDA TO THE COMPANY’S OUTLOOK FOR THE MOST COMPARABLE U.S. GAAP PERFORMANCE MEASURE, “INCOME (LOSS) FROM CONTINUING OPERATIONS”: Year Ending (in thousands)
Slide 18: Non-GAAP Reconciliations Cont'd
Non-GAAP Reconciliations Cont’d NON-GAAP EARNINGS PER SHARE AND NON-GAAP EARNINGS THE FOLLOWING IS A RECONCILIATION OF NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS TO NON-GAAP NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS AND A RECONCILIATION OF DILUTED NET INCOME (LOSS) PER SHARE T
Slide 19: Non-GAAP Reconciliations Cont'd
Non-GAAP Reconciliations Cont’d FREE CASH FLOW THE FOLLOWING IS A RECONCILIATION OF FREE CASH FLOW TO THE MOST COMPARABLE U.S. GAAP FINANCIAL MEASURE, “NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM CONTINUING OPERATIONS”: (in thousands) 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Net cash pro
Slide 20: Non-GAAP Reconciliations Cont'd
Non-GAAP Reconciliations Cont’d Q3 2018 Operating Cash Flow excluding IBM Settlement THE FOLLOWING IS A RECONCILIATION OF TTM OPERATING CASH FLOW EXCLUDING IBM SETTLEMENT TO THE MOST COMPARABLE U.S. GAAP FINANCIAL MEASURE: (in thousands) 3Q18 TTM Operating cash flow $ 133,288 Operating cash outflow
Slide 21: Groupon
GROUPON GROUPON |