Groupon, Inc. Q1 FY2025 earnings call

• Strong Q1 results with billings and adjusted EBITDA exceeding guidance, slight beat on revenue. - North America Local's hyper-local strategy driving growth, top 10 cities in NA with double-digit billings growth. - Enterprise clients flourishing. - Transformation strategy working across marketplace health, platform modernization, and financial strength. - Shift from chasing volume to building quality, migrating to modern platform, moving to positive financial performance. - Take rates in North America Local compressed, but deliberate for long-term growth. - Strengthened leadership team with key appointments. - Business exited Q1 with strong momentum, expects Q2 growth in billings and revenue.

Global billings grew 1.4% year-over-year. North America Local saw 11% year-over-year growth in billings, the first double-digit growth since 2017 (excluding pandemic recovery). International local business (excluding Italy) had approximately 5% year-over-year billings growth. North America Local's Things to Do segment had double-digit billings growth for the 5th straight quarter.

• Raised billings growth rate guidance from 2%-4% to 3%-5%. - Kept revenue and adjusted EBITDA guidance unchanged despite completing sale of Giftcloud, which removed ~$6M in revenue and $4M in adjusted EBITDA, demonstrating confidence in core business.

• Actual results may differ materially from forward-looking statements. - Macro environment volatility could impact business. - Fluidity in marketplace and macro conditions need close monitoring.

Q: Bobby Brooks asked about merchants with >$1M in billings, definition and driver.

A: Dusan Senkypl said it's based on trailing 12-month basis, result of hyper-geo approach, focusing on quality of merchants/deals/service.

Q: Bobby Brooks asked about checkout process improvement.

A: Dusan Senkypl said new platform allows faster iteration, checkout improved, progress made.

Q: Eric Sheridan asked about macro tailwind and supply side pipeline.

A: Dusan Senkypl said macro environment is tailwind, deepening cooperation with existing clients, faster inflow of new brands.

Q: Eric Sheridan asked about marketing ROI.

A: Dusan Senkypl said marketing performance improving, converting at same ROI, exploring new channels like social media influencers.

Q: Sean McGowan asked about international market updates.

A: Dusan Senkypl said international markets improving, Spain leading, similar strategy to US, progress on mobile app update.

Q: Sean McGowan asked about Giftcloud sale.

A: Dusan Senkypl and Jiri Ponrt discussed sale price in line with expectations, proceeds can be used up to $20M for non-core asset sales, transaction reported in Q2.

Q: Question about AI leverage.

A: Dusan Senkypl said AI used in sales, deal analysis, compatibility with AI platforms, expected efficiency and transaction improvement.

Q: Question about shift to lifetime value.

A: Dusan Senkypl said focus on retention, WowDeal pilot showing encouraging results, expanding pilot to build customer habit.