Groupon, Inc. · NASDAQ:GRPN
Groupon — Q4 2018 Earnings Presentation
21 slides from Groupon's earnings presentation, Feb 13, 2019
Slide 1: 4Q18 Earnings
4Q18 EARNINGS February 2019 NASDAQ: GRPN / [email protected]
Slide 2: Forward-Looking Statements
Forward-Looking Statements The statements contained in this release 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 Securities Exc
Slide 3: Groupon Is a Clear Leader in Local E-commerce
Groupon Is a Clear Leader in Local E-commerce SUBSTANTIAL SCALE IN UNDER-PENETRATED LOCAL MARKET • Strong brand awareness supported by offline advertising campaigns • Mobile-first platform well-positioned Top 5 >70 % for continued offline-to-online shift • Advanced analytics allow us to E-commerce O
Slide 4: Focusing on Our Key Priorities for 2019
Focusing on Our Key Priorities for 2019 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-linking and booking, and p
Slide 5: Enhancing our Financial Profile
Enhancing our Financial Profile Focus on driving long-term Gross Profit maximization • Expect increases in Gross Profit per customer to offset a meaningful portion of an anticipated Gross Profit decline in global customers in 2019 • Focus on driving conversion in core North America Local business th
Slide 6: 2019 Adjusted EBITDA Guidance
2019 Adjusted EBITDA Guidance 2019 Guidance • Support key initiatives to drive Adjusted EBITDA1 conversion and Gross Profit per (USD millions) customer growth • Expect traffic headwinds to persist in 2018 2019 2019 Actual Guidance • Maintain culture of operational efficiency $270 $270 • Pave the pat
Slide 7: Financial Information and Operating Metrics
FINANCIAL INFORMATION AND OPERATING METRICS 7
Slide 8: Large Customer Base & Solid Gross Profit / Customer
Large Customer Base & Solid Gross Profit / Customer Global Active Customers1 (millions) Global TTM Gross Profit / Active Customer1, 2 +2% y/y 49.5 49.6 $26.93 $27.16 $27.27 $27.51 $27.42 49.3 48.8 48.2 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 Gross Profit per customer up 2% year-over-year i
Slide 9: Gross Profit - Focus On Dollar Growth
Gross Profit - Focus On Dollar Growth (USD millions) North America International Global -5% -7% -3% y/y y/y y/y $265 $122 $387 $248 $118 $366 $105 $104 $102 $325 $324 $220 $219 $306 $204 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 ex-f/x +1% -4% Global Gross Profit of
Slide 10: North America Gross Profit
North America Gross Profit (USD millions) NA Local Gross Profit NA Goods Gross Profit NA Gross Profit +2% -7% y/y y/y -9 % $265 y/y $248 $197 $55 $56 $180 $220 $219 $167 $165 $204 $159 $37 $38 $31 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 North America Gross Profit o
Slide 11: International Gross Profit
International Gross Profit (USD millions) International Local Gross International Goods Gross International Gross Profit Profit Profit +6% -3% y/y y/y $122 $80 $118 $76 -18% $70 $72 $35 y/y $105 $104 $102 $67 $28 $28 $24 $22 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18
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% -2 y/y Marketing Spend $161 $159 $152 Time to $140 $140 Payback 12 to 18 months $49 $49 $53 $46 $47 • Continuing to refine customer analytics to enhance
Slide 13: SG&A – Benefiting From Operational Efficiency
SG&A – Benefiting From Operational Efficiency SG&A1 SBC2 and D&A (USD millions) Excludes IBM -13% y/y $56 $225 $222 $219 $34 $49 $201 $195 $45 $44 $30 $43 $29 $29 $29 $22 $19 $16 $15 $14 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 SBC D&A Global SG&A declined by $30 million or 13% year-over-ye
Slide 14: Focus On Improving Conversion From Adjusted EBITDA To Free Cash Flow
Focus On Improving Conversion From Adjusted EBITDA To Free Cash Flow (TTM, USD millions) Adjusted EBITDA1, Operating Cash Flow Free Cash Flow excluding IBM settlement2, 3, 4 excluding IBM settlement3,4, and Capital Expenditures $270 $270 $163 $258 $261 $250 $233 $145 $212 $175 $106 $149 $131 $84 $71
Slide 15: Appendix
APPENDIX GROUPON |
Slide 16: Non-GAAP Reconciliations: Adjusted EBITDA - Quarterly
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) 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Income (loss) from continuing operations
Slide 17: Non-GAAP Reconciliations: Expected Adjusted EBITDA
Non-GAAP Reconciliations Cont’d EXPECTED ADJUSTED EBITDA THE FOLLOWING IS A RECONCILIATION OF OUR ANNUAL OUTLOOK FOR ADJUSTED EBITDA TO OUR OUTLOOK FOR THE MOST COMPARABLE U.S. GAAP PERFORMANCE MEASURE, “INCOME (LOSS) FROM CONTINUING OPERATIONS”: Year Ending (in thousands) December 31, 2019 Expected
Slide 18: Non-GAAP Reconciliations: Non-GAAP Earnings Per Share
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: Free Cash Flow
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) 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Net cash pro
Slide 20: Q4 2018 Operating Cash Flow excluding IBM Settlement
Non-GAAP Reconciliations Cont’d Q4 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 4Q18 TTM Operating cash flow $ 133,288 $ 190,855 TTM Oper
Slide 21: Groupon
GROUPON GROUPON |