Groupon, Inc. · NASDAQ:GRPN
Groupon — Q1 2020 Earnings Presentation
27 slides from Groupon's earnings presentation, Jun 16, 2020
Slide 1: 1Q20 Earnings
1Q20 Earnings June 16, 2020 1
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: The Destination for Local Experiences
GROUPON THE DESTINATION FOR LOCAL EXPERIENCES. 3
Slide 4: Our Large Addressable Market Opportunity
Our Large Addressable Market Opportunity 4
Slide 5: Groupon is a leader in local e-commerce
Groupon is a leader in local e-commerce Connecting ~42M1 customers to hundreds of thousands of merchants Top 5 E-commerce brand 2 ● Beloved brand known for deals; opportunity to leverage Local offering and grow brand equity 1 in 5 ● Two-sided marketplace with massive global scale U.S. internet users
Slide 6: In 2019 our best NA customers were ~8M strong
In 2019 our best NA customers were ~8M strong Our best customer... ● Our best NA customers purchased ~58% of total units sold in 2019 and spent ~$2.1B1 has household income of $75K to $100K ● They purchased from us ~7x in 2019 on average ● 1 more purchase from these best customers per year is ~$300M
Slide 7: We are a leader in a $1T+ market…
We are a leader in a $1T+ market… …yet we are capturing only a fraction of the market opportunity Groupon 2019 Billings $1T+ TAM $3.4B in Local for local experiences where we have a right to win Experiences1 $1T+ addressable market Top player... Things to Do Beauty & Wellness Dining $1B+ $900M+ $350
Slide 8: Driving purchase frequency among our best customers…
Driving purchase frequency among our best customers… ...can unlock a powerful flywheel Quality, Bookable Inventory Merchant Self Location and Service Tools Personalization Quality Amazing Merchants Growth Mobile CX Customer and Traffic New App Scale Frictionless Booking 8
Slide 9: Our COVID-19 Response
Our COVID-19 Response 9
Slide 10: Immediately created a COVID-19 response plan
Immediately created a COVID-19 response plan Priorities focused on helping us navigate the changing business landscape and stabilizing the company With a change in leadership, a global pandemic, and underlying business challenges, our plan had to be highly targeted and able to deliver results quickl
Slide 11: Pre COVID-19 results
Pre COVID-19 results We saw a Local unit benefit from shifting impressions to Local from Goods NA Local units: up 9% and 5% y/y in January and February 2020 vs. 11% y/y decline in 4Q 2019 Int’l. Local units: up 4% and 10% y/y in January and February 2020 vs. 4% y/y growth in 4Q 2019 Consolidated Loca
Slide 12: In March, COVID-19 began to impact our marketplace
In March, COVID-19 began to impact our marketplace Performance deteriorated throughout March and into April NA Local units declined 49% y/y in March 2020 Int’l. Local units declined 52% y/y in March 2020 Consolidated Local units declined 79% in the last 10 days of March Performance was exacerbated b
Slide 13: Shifted our focus to stabilize the company
Shifted our focus to stabilize the company Targeted plan to deliver near-term results 3 Near-Term Priorities ● Preserve cash and reduce our cost structure ● Support our merchants with a refreshed approach to merchandising ● Leverage our Goods inventory to respond to consumer demand 13
Slide 14: We moved quickly to preserve cash & reduce costs
We moved quickly to preserve cash & reduce costs Tough decisions have enabled us to preserve cash and support initiatives focused on future growth ● Executed phase one of our restructuring plan ● Reduced payroll costs further through furloughs and other measures ● Furloughed or initiated exits with
Slide 15: We moved quickly to support our merchants
We moved quickly to support our merchants Addressing changes in consumer demand and working with merchants to help adapt their businesses... ● New merchandising strategy to reflect consumer tastes during lockdown ● New merchandising: “Buy Now, Do Now”, “Buy Now, Do Later” ● New merchandising initiati
Slide 16: We moved quickly to leverage Goods
We moved quickly to leverage Goods Goods has been a key contributor to cash flow in April and May ● Continued to sell Goods to adapt to changing consumer demand ● Sourced relevant supply such as face masks, gloves, and hand sanitizer ● Shifting sales of Goods to a third-party marketplace model over t
Slide 17: April & May: sequential improvements
April & May: sequential improvements Trends indicate our business is recovering more quickly than we expected Unit performance has improved from late March trough levels NA Local units were down 77% y/y in last 10 days of March, but improved to down 68% y/y in April Globally, Local unit performance
Slide 18: Unit trends
Unit trends We leveraged Goods throughout COVID to drive cash flow and customer engagement Impact of shifting impressions from Goods to Local Shifting impressions to Goods allowed us to drive unit velocity & generate cash Local units recovering more Consolidated Local unit quickly than expected perfo
Slide 19: A Different Approach to Execution
A Different Approach to Execution 19
Slide 20: A different approach to execution
A different approach to execution Powering our teams for success Empowering our teams ● Focused on the most important business opportunities ● Iterating faster to launch innovative products ● New approach expected to lead to better business decisions and outcomes Moving faster ● Restructuring to bec
Slide 21: Q1 Results
Q1 Results 21
Slide 22: Key First Quarter Results
Key First Quarter Results Units 30M Billings $806M Revenue $374M Gross Profit $201M Adjusted EBITDA Loss $(22M) Cash (as of 3/31) $667M 22
Slide 23: Second Quarter 2020 Outlook
Second Quarter 2020 Outlook 23
Slide 24: Second Quarter Outlook
Second Quarter Outlook AEBITDA loss between $(45)M and $(20)M Second Quarter Assumptions For 2020 Modeling Purposes ● Decline in gross billings and gross profit vs. 1Q 2020 due ● Won’t see the full financial benefit of our phase one to full quarter of lower demand and elevated refunds restructuring act
Slide 25: Appendix
Appendix 25
Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted EBITDA - Quarterly 26
Slide 27: Non-GAAP Reconciliations
Non-GAAP Reconciliations Free Cash Flow 27