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Market ClerkRecap
Sun Nov 1 · markets closed1 signal on Oct 31129 insider buys this week · $10BCIRO short report next: Nov 15The week ahead

GRPN

Groupon, Inc.
NASDAQ · COMMUNICATION SERVICES · SERVICES-ADVERTISING AGENCIES
15.75
−0.51 −3.14%
USD · close Oct 30
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MKT CAP $640.5MP/E —DIV YIELD —FCF YIELD 4.68%REV TTM $497.4M +2.0%NET INCOME −$125.7MNET DEBT $81.1M52W 9.64 – 28.58SEC XBRL · TTM TO Invalid Date

How GRPN rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
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New in FY2025

  • Risk Factors, and elsewhere in this Annual Report.
  • See Part I, Forward-Looking Statements , for additional information.
  • For further discussion regarding operating and financial data for the year ended December 31, 2024 as compared to the year ended December 31, 2023, refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
  • Overview Groupon is a global scaled two-sided marketplace that connects consumers to merchants.
  • Consumers access our marketplace through our mobile applications and our websites.
  • We operate in two segments, North America and International, and in three categories, Local, Goods and Travel.
  • See Item 8, Note 19, Segment and Geographical Information, for additional information.
  • We generate service revenue from Local, Goods and Travel categories.
  • Revenue primarily represents the net commissions earned from selling goods or services on behalf of third-party merchants.
  • Revenue is reported on a net basis as the purchase price collected from the customer less the portion of the purchase price that is payable to the third-party merchant.
  • We also earn commissions when customers make purchases with retailers using digital coupons accessed through our websites and mobile applications.
  • How We Measure Our Business We use several operating and financial metrics to assess the progress of our business and make strategic decisions.
  • Certain of the financial metrics are reported in accordance with GAAP and certain of those metrics are considered non-GAAP financial measures.
  • As our business evolves, we may make changes to the key financial and operating metrics that we use to measure our business.
  • For further information and reconciliations to the most applicable financial measures under GAAP, refer to our discussion under Non-GAAP Financial Measures in the Results of Operations section.
  • Operating Metrics • Gross billings is the total dollar value of customer purchases of goods and services.
  • Gross billings is presented net of customer refunds, order discounts and sales and related taxes.
  • The substantial majority of our revenue transactions are comprised of sales of vouchers and similar transactions in which we collect the transaction price from the customer and remit a portion of the transaction price to the third-party merchant who will provide the related goods or services.
  • For these transactions, gross billings differs from Revenue reported in our Consolidated Statements of Operations, which is presented net of the merchant's share of the transaction price.
  • Gross billings is an indicator of our growth and business performance as it measures the dollar volume of transactions generated through our marketplaces.
  • Tracking gross billings also allows us to monitor the percentage of gross billings that we are able to retain after payments to merchants. • Units are the number of purchases during the reporting period, before refunds and cancellations, made either through one of our online marketplaces, a third-party marketplace, or directly with a merchant for which we earn a commission.
  • We do not include purchases with retailers using digital coupons accessed through our websites or mobile applications in our units metric.
  • We consider units to be an important indicator of the total volume of business conducted through our marketplaces. • Active customers are unique user accounts, identified by a distinct email address, that have made a purchase during the TTM either through one of our online marketplaces or directly with a merchant for which we earned a commission.
  • We consider this metric to be an important indicator of our business performance as it helps us to understand how the number of customers actively purchasing our offerings is trending.
  • Some customers could establish and make purchases from more than one account, so it is possible that our active customer metric may count certain customers more than once in a given period.
  • We do not include consumers who solely make purchases with retailers using digital coupons accessed through our websites or mobile applications in our active customer metric, nor do we include consumers who solely make purchases of our inventory through third-party marketplaces with which we partner.
  • Our gross billings, units and TTM active customers for the years ended December 31, 2025 and 2024 were as follows (in thousands): Year Ended December 31, 2025 2024 Gross billings $ 1,665,755 $ 1,558,203 Units 36,826 36,640 TTM Active customers 16,229 15,432 Financial Metrics • Revenue is earned through transactions for which we generate commissions by selling goods or services on behalf of third-party merchants.
  • Revenue from those transactions is reported on a net basis as the purchase price collected from the customer for the offering less an agreed upon portion of the purchase price paid to the third-party merchant.
  • Revenue also includes commissions we earn when customers make purchases with retailers using digital coupons accessed through our digital properties. • Cost of revenue consists of direct and certain indirect costs incurred to generate revenue.
  • Costs incurred to generate revenue, which include credit card processing fees, editorial costs, compensation expense for technology support personnel who are responsible for maintaining the infrastructure of our websites, amortization of internal-use software relating to customer-facing applications, web hosting and other processing fees are attributed to the cost of service. • Gross profit reflects the net margin we earn after deducting our Cost of revenue from our Revenue. • Contribution Profit measures the amount of marketing investment needed to generate revenue and is defined as net revenues less cost of sales and marketing expense.
  • See Item 8, Note 19, Segment and Geographical Information , for additional information. • Adjusted EBITDA is a non-GAAP financial measure that we define as Net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, and other special charges and credits, including items that are unusual in nature or infrequently occurring.
  • For further information and a reconciliation to Net income (loss) from continuing operations, refer to our discussion under Non-GAAP Financial Measures in the Results of Operations section. • Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software.
  • For further information and a reconciliation to Net cash provided by (used in) operating activities from continuing operations, refer to our discussion in the Liquidity and Capital Resources section.
  • The following table presents the above financial metrics for the years ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 Revenue $ 498,422 $ 492,557 Gross profit 452,539 444,306 Contribution profit 286,684 300,099 Adjusted EBITDA 69,332 69,308 Free cash flow 49,874 40,561 Operating Expenses • Marketing expense consists primarily of online marketing costs, such as search engine marketing, advertising on social networking sites and affiliate programs, and offline marketing costs, such as television.
  • Additionally, compensation expense for marketing employees is classified within Marketing expense.
  • We record these costs within Marketing on the Consolidated Statements of Operations when incurred.
  • From time to time, we have offerings from well-known national merchants for customer acquisition and activation purposes, for which the amount we owe the merchant for each voucher sold exceeds the transaction price paid by the customer.
  • Our gross billings from those transactions generate no revenue and our net cost (i.e., the excess of the amount owed to the merchant over the amount paid by the customer) is classified as marketing expense.
  • We evaluate marketing expense as a percentage of gross profit because it gives us an indication of how well our marketing spend is driving gross profit performance. • SG & A expenses include selling expenses such as sales commissions and other compensation expenses for sales representatives, as well as costs associated with supporting the sales function such as technology, telecommunications and travel.
  • General and administrative expenses include compensation expense for employees involved in customer service, operations, technology and product development, as well as general corporate functions, such as finance, legal and human resources.

and 914 more.

Gone since FY2024

  • RISK FACTORS Our business, prospects, financial condition, operating results and the trading price of our Common Stock could be materially adversely affected by the risks described below.
  • In assessing those risks, you should also refer to the other information contained in this Annual Report on Form 10-K, including Part II, Item 7.
  • Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) and the Consolidated Financial Statements and the related notes in Part II, Item 8.
  • Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
  • Summary Risk Factors The following is a summary of some of the risks and uncertainties that could materially adversely affect our business, prospects, financial condition, operating results and the trading price of our Common Stock.
  • You should read this summary together with the more detailed description of each risk factor contained below.
  • Risks Related to Our Business, Operations and Strategy Our strategy may be unsuccessful and may expose us to additional risks.
  • If our strategy does not achieve its expected benefits, there could be negative impacts to our business, financial condition and results of operations. • Current or future restructuring plans could be disruptive to our operations and adversely affect our results of operations and financial condition, and we may not realize some or all of the anticipated benefits of the plans in the time frame anticipated or at all. • Our operating results may vary significantly from quarter to quarter. • Our U.S. and international operations are subject to varied and evolving sociopolitical conditions as well as commercial, employment and regulatory challenges, and our inability to adapt to the diverse and changing landscapes of our U.S. and international markets may adversely affect our business. • Our success is dependent upon our ability to provide a superior mobile experience for our customers and our customers' continued ability to access our offerings through mobile devices. • An increase in our refund rates or estimated liabilities with respect to unredeemed vouchers could adversely affect our financial results. • The loss of key executives, members of our management team and employees across our organization, or our failure to attract and retain other highly qualified personnel in the future could harm our business. • Our material weakness in internal control over financial reporting could impair our ability to report accurate and timely financial information and have a material and adverse effect on our financial condition and results of operations.
  • Risks Related to Technology and Cybersecurity • We may be subject to breaches of our information technology systems, which could harm our relationships with our customers, merchants, employees and third-party business partners, subject us to negative publicity and litigation, and cause substantial harm to our business or brand. • Our business depends on our ability to maintain and improve the technology infrastructure necessary to send our emails and operate our websites, mobile applications and transaction processing systems, and any significant disruption in service on our email network infrastructure, websites, mobile applications or transaction processing systems could result in a loss of customers or merchants. • As we have increased our reliance on cloud-based applications and platforms to operate and deliver our products and services, any disruption or interference with these platforms could adversely affect our financial condition and results of operations.
  • Risks Related to Transactions and Investments • Acquisitions, dispositions, joint ventures and strategic investments could result in operating difficulties, dilution and other consequences. • We do not have the ability to exert control over our minority investments, and therefore we are dependent on others in order to realize their potential benefits.
  • Risks Related to Our Brand and Intellectual Property • We allow third parties to sell products via our site, which increases our risk of litigation and other losses. • We may be subject to substantial liability claims and damage to our brand and reputation if people or property are harmed by the products or services offered through our marketplace. • We may not be able to adequately protect our intellectual property rights or may be accused of infringing intellectual property rights of third parties.
  • Risks Related to Legal, Regulatory, Privacy and Tax Matters • We are involved in pending litigation and other claims and an adverse resolution of such matters may adversely affect our business, financial condition, results of operations and cash flows. • The application of certain laws and regulations, including, among other laws, the CARD Act and similar state and foreign laws, may harm our business and results of operations. • Federal laws and regulations, such as the Bank Secrecy Act and the USA PATRIOT Act and similar foreign laws, could be expanded to include Groupon vouchers or other offerings. • State and foreign laws regulating money transmission could be expanded to include Groupon vouchers or other Groupon products or services. • Failure to comply with existing, expanding or newly enacted U.S. federal, state and international privacy laws and regulations, could adversely affect our business. • Misclassification or reclassification of our independent contractors, agency workers or employees could increase our costs and adversely impact our business. • We may have exposure to greater than anticipated tax liabilities, including the Italy tax Assessment. • The adoption of tax reform policies, including the enactment of legislation or regulations implementing changes in the tax treatment of companies engaged in Internet commerce and U.S. taxation could materially affect our financial position and results of operations. • We may be adversely affected by global climate change or by legal, regulatory, or market responses to such change.
  • Risks Related to Our Capital Structure • Our access to capital may be limited and our ability to successfully manage and raise capital in the future may fail, which could prevent us from growing and adversely impact our liquidity. • We may not have the ability to raise the funds necessary to settle conversions of the 2026 Notes and 2027 Notes in cash, to repurchase the 2026 Notes and 2027 Notes upon a fundamental change or to repay the 2026 Notes and 2027 Notes in cash at their maturity (if not earlier converted, redeemed or repurchased), and our current outstanding and future debt may contain limitations on our ability to pay cash upon conversions of the 2026 Notes and 2027 Notes or at their maturity or to repurchase the 2026 Notes and 2027 Notes. • The terms of the 2026 Notes and 2027 Notes could delay or prevent an attempt to take over our Company. • The conditional conversion feature of the 2026 Notes and 2027 Notes, if triggered, may adversely affect our financial condition and operating results.
  • Risks Related to Ownership of Our Common Stock • The trading price of our Common Stock is highly volatile. • The capped call transactions may affect the value of our 2026 Notes Common Stock. • We are subject to counterparty risk with respect to the capped call transactions.
  • If our strategy does not achieve its expected benefits, there could be negative impacts to our business, financial condition and results of operations.
  • We are implementing a strategy to become the trusted marketplace where customers go to buy local services and experiences and return the Company to growth.
  • We intend to execute our strategy by building long-term relationships with local merchants to improve our inventory selection and improving the customer experience through inventory curation and improved convenience in order to drive customer demand and purchase frequency.
  • There are no assurances that our actions will be successful in executing our strategy and returning the Company to growth.
  • Our efforts may prove more difficult than we currently anticipate.
  • Further, we may not succeed in realizing the benefits of these efforts on our anticipated timeline or at all.
  • In addition, as we implement our strategy, the macroeconomic environment, including but not limited to, inflationary pressures, higher labor costs, tariff policy, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior may make it more difficult to effectively execute our strategy, including to quickly test, learn and scale initiatives relating to improving inventory selection or improving customer experience.
  • Even if fully implemented, our strategy may not result in a return to growth or the other anticipated benefits to our business, financial condition and results of operations.
  • If we are unable to effectively execute our strategy and realize its anticipated benefits, it could negatively impact our business, financial condition and results of operations.
  • Current or future restructuring plans could be disruptive to our operations and adversely affect our results of operations and financial condition, and we may not realize some or all of the anticipated benefits of the plans in the time frame anticipated or at all.
  • In August 2022, we initiated a multi-phase cost savings plan designed to reduce our expense structure and align with our go-forward business and financial objectives.
  • The cost savings plan included a restructuring plan and each phase of the restructuring plan was approved by our Board as follows: the first phase was approved in August 2022, the second phase was approved in January 2023 and the third phase was approved in July 2023.
  • The implementation of the restructuring plan, including the impact of workforce reductions and other non-payroll cost savings measures could be disruptive to our operations, make it difficult to attract or retain employees, result in higher than anticipated charges, and otherwise adversely affect our results of operations and financial condition.
  • In addition, our ability to complete the restructuring plan and achieve the anticipated benefits from the plan within the expected time frame, or at all, is subject to estimates and assumptions and may vary materially from our expectations, including as a result of factors that are beyond our control.
  • Furthermore, following completion of the restructuring plan, our business may not be more efficient or effective than prior to implementation of the restructuring plan.
  • Our operating results may vary significantly from quarter to quarter.
  • Our operating results may vary significantly from quarter to quarter due to the rapidly evolving nature of our business and other reasons.
  • We believe that our ability to achieve and maintain revenue growth and profitability will depend, among other factors, on our ability to: • respond to macroeconomic challenges, including but not limited to, inflationary pressures, higher labor costs, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior and the ability to optimize our supply to take into account consumer preferences at a particular point in time; • acquire new customers, retain existing customers, and increase customer purchase frequency; • attract and retain high-quality merchants; • maintain our current relationships with or attract new vendors, suppliers and service providers on agreeable terms; • maintain contracts that are critical to our operations; • attract and retain key employees, including attracting and retaining talent with an appropriate level of skill and experience, including product and technology expertise, cybersecurity expertise, GAAP knowledge and experience to create the proper control environment for effective internal control over financial reporting; • effectively address and respond to challenges in international markets; • increase the variety, quality, density and relevance of supply, including through third party business partners and technology integrations; • deliver a marketplace experience on our website and mobile applications that meets the needs of our customers and merchants; • increase booking capabilities; • increase the awareness of, and evolve, our brand to a local experiences marketplace; • continue to reduce costs and maintain cost discipline to benefit from our reduced cost structure; • maintain the performance of our Goods category following transition to a third party marketplace model; • successfully achieve the anticipated benefits of business combinations or acquisitions, strategic investments and divestitures; • complete the multi-phased cost savings plan and achieve the anticipated benefits from the plan; • provide a superior customer service experience for our customers; • avoid interruptions to our services, including as a result of attempted or successful cybersecurity attacks or breaches; • respond to continuous changes in consumer and merchant use of technology; • optimize and diversify our traffic channels; • react to challenges from existing and new competitors; • respond to periodic changes in supply and demand; and • address challenges from existing and new laws and regulations.
  • I n addition, our margins and profitability may depend on our inventory mix, geographic revenue mix, discount rates mix and merchant and third-party business partner pricing terms.
  • Accordingly, our operating results and profitability may vary significantly from quarter to quarter.
  • Our U.S. and international operations are subject to varied and evolving sociopolitical conditions as well as commercial, employment and regulatory challenges, and our inability to adapt to the diverse and changing landscapes of our U.S. and international markets may adversely affect our business.
  • Our operations require management attention and resources and also require us to localize our services to conform to a wide variety of local cultures, business practices, laws and policies.
  • Our operations are subject to numerous risks, including the following: • our ability to maintain merchant and customer satisfaction such that our marketplace will continue to attract high quality merchants; • our ability to successfully respond to macroeconomic challenges, including but not limited to, inflationary pressures, higher labor costs, tariff policy, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior and the ability to optimize our supply to take into account consumer preferences at a particular point in time; • political, economic and civil instability and uncertainty (including macroeconomic conditions impacting us, our customers, merchants, or our vendors, acts of terrorism, civil unrest, labor unrest, violence and outbreaks of war and pandemics or other disease outbreaks); • disruptions and instability in the international markets in which we operate, including Poland, as a result of the ongoing conflict in Ukraine and the Middle East; • Challenges in navigating legal and judicial systems in international jurisdictions, which may vary significantly in complexity, efficiency, and enforceability, and where we do not employ legal staff locally, further increasing the difficulty of addressing and resolving disputes; • currency exchange rate fluctuations; • strong local competitors who may better understand the local market and/or have greater resources in the local market; • different regulatory or other legal requirements (including potential fines and penalties that may be imposed for failure to comply with those requirements), such as regulation of gift cards and coupon terms, Internet services, professional selling, distance selling, bulk emailing, privacy and data protection (including GDPR), cybersecurity, business licenses and certifications, taxation (including the European Union's voucher directive, digital service tax and similar regulations and any audits), consumer protection laws including those restricting the types of services we may offer (e.g., medical-related services), banking and money transmitting, that may limit or prevent the offering of our services in some jurisdictions, cause unanticipated compliance expenses or limit our ability to enforce contractual obligations; • our ability to use a common technology platform in our North America and International segments to operate our business without significant business interruptions or delays; • difficulties in integrating with local payment providers, including banks, credit and debit card networks and electronic funds transfer systems; • the ability to quickly and effectively consult with, negotiate and seek the consent or opinion of, various employee groups, our international workers' councils and trade unions that represent our international employees on various matters including restructuring actions, strategic decisions, any changes to our activities or employee benefits and other business critical matters, which could result in the delay of executing key actions or product delivery and increase costs; • the local legal restrictions relating to employment and staffing; • difficulty in staffing, including attracting and retaining talent with an appropriate level of skill and experience, including knowledge and experience in developing and managing foreign operations, including through centralized shared service centers, as a result of distance, language barriers and cultural differences; • periodic reductions in business activity; • expenses associated with localizing our products; and • differing intellectual property laws.
  • We are subject to complex laws and regulations that apply to our international operations, such as data privacy and protection requirements, including GDPR, the FCPA, the UK Anti-Bribery Act and similar local laws prohibiting certain payments to government officials, banking and payment processing regulations and anti-competition regulations, among others.
  • The cost of complying with these various, and sometimes conflicting, laws and regulations is substantial.
  • We have implemented and continue to implement policies and procedures to ensure compliance with these laws and regulations, however, we cannot ensure that our employees, contractors, or agents will not violate our policies.

and 425 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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