Groupon, Inc. · NASDAQ:GRPN
Groupon — Q1 2022 Earnings Presentation
34 slides from Groupon's earnings presentation, May 9, 2022
Slide 1: GRPN Investor Presentation 1Q22
GRPN Investor Presentation 1Q22 May 9, 2022
Slide 2: Forward-looking statements and other information
Forward-looking statements and other information 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 Sectio
Slide 3: Trusted Local Marketplace
Trusted Local Marketplace. Where customers go to buy services and experiences that make life less boring and deliver boundless value. 3
Slide 4: Global, scaled, two-sided marketplace with undervalued assets and big potential
Scaled local marketplace with room to grow ● Leading player in the large and growing addressable market for local services and experiences ● Two-sided marketplace with massive global scale ● Delivered $1.6B+ in Local Billings in 2021 ● Beloved brand: ~1.5B Groupons sold to date1 Valuable, underutili
Slide 5: A scaled local marketplace with room to grow
1 Million+ Merchant partners worked with to date ● Large and growing addressable market in local A scaled local 1.5 Billion+ ● Groupon’s two-sided Groupons sold to date marketplace with marketplace has massive global scale room to grow ● ~70% of our customer base Connecting millions of $35 Billion+
Slide 6: Valuable, Underutilized Assets
Valuable, Global Scaled Customers Information Underutilized Platform Untapped data assets and Assets Tremendous global scale Horizontal marketplace feedback network in our across 13 countries current experience Allow us to uniquely meet the needs of high-intent local customers We can roll out new gr
Slide 7: Our Plan to Unlock Growth
Our Plan to Unlock Growth
Slide 8: Candid assessment of our businesses
Candid assessment of our businesses While our recent performance has been disappointing, the drivers behind our performance can be fixed Spent last five months building a deep understanding of our business: ● Identified untapped assets that make the Groupon opportunity so attractive - a global, scaled
Slide 9: All of our focus will be applied to improving three key areas
All of our focus Reduce Cost Fix Core Business Differentiate Inventory to Structure Drive Growth will be applied to improving three ● Incorporate operational ● Improve inventory ● Grow top line by expanding our excellence approach and density across markets inventory through differentiation key area
Slide 10: 1. Reduce our Cost Structure
1. Reduce our Cost Structure
Slide 11: Reduce our Cost Structure
Reduce our Cost Structure… Moving quickly to substantially reduce our expense structure to save both time and money Streamline Technology Platform Automate Operating Processes ● Today, our tech platform is too complicated and ● Too many of our current processes require big for our needs and size hum
Slide 12: …to Unlock Sustainable Financial Model
…to Unlock Sustainable Financial Model Expect improved financial results in Full Year 2023 2023 AND BEYOND 15-20% Sustainable Annual Adjusted $100M Minimum Annual EBITDA margins* Free Cash Flow* * We do not provide a reconciliation for non-GAAP estimates on a forward-looking basis where we are unable
Slide 13: 2. Fix our Core Business
2. Fix our Core Business GROUPON
Slide 14: Fixing Our Core Business
Fixing Our Core Business Focused on the three most important areas Improve inventory ● Create the optimal inventory density to satisfy the needs of density high-intent customers ● High intent customers ~3x more valuable than customers who come to browse deals Create a better ● Build the right custom
Slide 15: Improve Inventory Density
Improve Inventory Density Build optimal inventory density that satisfies and inspires our customers based on their intent ● Develop ideal view of inventory required to satisfy intent by experience or service type ● Backfill missing inventory with new, transactable listings to satisfy intent and elimin
Slide 16: Create a Better Customer Experience
Create a Better Customer Experience Build the right customer journey to fulfill customer intent ● Modernize the CX with better search and curation ● Encourage cross-promotion across verticals ● Launch features to make purchase to redemption cycle more seamless 16
Slide 17: Improve Customer Trust
Improve Customer Trust “Contact Us” functionality Create a circle of trust with customers and build relationships that extend Improve user beyond the current transaction Optimize pricing generated content methodology (reviews) Easier credit refunds through self-service 17
Slide 18: 3. Differentiate our Inventory to Drive Growth
3. Differentiate our Inventory to Drive Growth
Slide 19: Differentiate Inventory to Drive Growth
Differentiate Inventory to Drive Growth Creating curated inventory collections that combine Local inventory in new, unique ways to drive consumer demand ● We have a broad spectrum of Deal inventory, but our offering is not always differentiated enough to be compelling to consumers ● We intend to cre
Slide 20: Differentiate Inventory to Drive Growth: Beauty and Wellness
Differentiate Inventory to Drive Growth Launching premium Beauty and Wellness marketplace experience to better serve high-intent customers ● Taking an innovative approach to attract top-tier inventory and better serve high-intent customers ● Plan to launch a new Beauty and Wellness marketplace exper
Slide 21: Long-Term Growth Plan
Long-Term Growth Plan Strategy to unlock value Potential to unlock marketplace flywheel and significant shareholder value Supply Density Location and Merchant Partner Self-Service Tools Personalization ● Fix our Core Business ○ Improve Inventory Density, Customer Experience & Trust ○ Reduce our cost s
Slide 22: First Quarter Results
First Quarter Results
Slide 23: Key first quarter results
Key first quarter results 22M 13M $461M $153M Active Units Billings Revenue Customers1 Sold $134M $(7)M $403M Gross Profit Adjusted Cash EBITDA2 (as of 3/31)3 1. Active Customers are defined as unique user accounts that have made a purchase during the trailing twelve months ("TTM") either through one
Slide 24: Additional insights on first quarter results
Q1 Global Local Billings - NA and International Local Billings at 50% and 48% of 2019 levels, respectively, as Local performance was significantly impacted by the Omicron variant in January and February and did not rebound as expected in March Additional Grew our high value, active Local customer bas
Slide 25: Improving the Composition of our Customer Base
NA Active Local Customers 1 11.3M 11.0M 10.8M 10.4M 9.3M Improving the Composition of our Customer Base Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Focused on growing our high-value Local customer base and unlocking purchase frequency to capture more customer wallet share and drive more demand to Groupo
Slide 26: 2Q22 & FY22 Perspective
2Q22 & FY22 Perspective
Slide 27: 2Q & FY22 perspective
2Q & FY22 perspective Q2 Outlook: Factors to Consider ● Revenue expected to be $155 million to $165 million ● April Global Local Billings in-line to slightly better than Q1 as a % of 2019 ● Adjusted EBITDA* expected to be $0 million to $10 million ● 2H Local recovery rate assumptions (as a % of 2019
Slide 28: Global, scaled, two-sided marketplace with undervalued assets and big potential
Scaled local marketplace with room to grow ● Leading player in the large and growing addressable market for local services and experiences ● Two-sided marketplace with massive global scale ● Delivered $1.6B+ in Local Billings in 2021 ● Beloved brand: ~1.5B Groupons sold to date1 Valuable, underutili
Slide 29: Appendix
Appendix
Slide 30: Goods revenue presentation
Goods revenue presentation 1P vs. 3P example1: $100 customer purchase First Party Goods Third Party Goods Billings $100 $100 Billings don’t change; this is what our customer pays to Groupon In 3P model, Groupon revenue is the commission from the sale Revenue $100 $17 (net of merchant payment) Gross
Slide 31: Minority Investments Overview
● SumUp Holdings S.a.r.l. (“SumUp”) ○ Groupon has been a passive investor in SumUp, a privately-held, global payments service provider, since 2013 and currently holds a 2.4% non-controlling ownership Minority interest Investments ○ There is no public market for SumUp securities at this time. Other M
Slide 32: Non-GAAP Reconciliations: Adjusted EBITDA - Quarterly
Non-GAAP Reconciliations* Adjusted EBITDA - Quarterly (in thousands) *See Q1 2022 earnings press release posted on our Investor Relations website for additional information regarding non-GAAP financial measures 32
Slide 33: Non-GAAP Reconciliations: Expected Adjusted EBITDA Range
Non-GAAP Reconciliations* Expected Adjusted EBITDA Range (in thousands) *See Q1 2022 earnings press release posted on our Investor Relations website for additional information regarding non-GAAP financial measures 33
Slide 34: Non-GAAP Reconciliations: Free Cash Flow
Non-GAAP Reconciliations* Free Cash Flow (in thousands) *See Q1 2022 earnings press release posted on our Investor Relations website for additional information regarding non-GAAP financial measures 34