Groupon, Inc. · NASDAQ:GRPN
Groupon — Q3 2021 Earnings Presentation
41 slides from Groupon's earnings presentation, Nov 5, 2021
Slide 1: GRPN Investor Presentation 3Q21
GRPN Investor Presentation 3Q21 November 5, 2021
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: The destination for experiences
The destination for experiences. Where customers discover fun things to do & local businesses thrive 3
Slide 4: Leading local marketplace with proven profitability and long-term growth opportunity
Beloved global brand that connects millions of customers with merchants, known for providing unbeatable value A leader in the fragmented $1T Local Market, leveraging our scale and focusing on where we are most differentiated ● Strong competitive position with Local merchants and a low/no-risk, trans
Slide 5: Making big changes to become the destination for local
Merchant Value Pre-2021 Now Proposition High Effort to Launch and Easy to Launch and Manage Making big Ease Manage Deals Listings with Self-Service changes to Merchant Control with Sponsored become the Reach No Merchant Control Listings destination for Multiple Products at Multiple Price Local Monet
Slide 6: Our Large Addressable Market Opportunity
Our Large Addressable Market Opportunity
Slide 7: A leading local marketplace with room to grow
1 Million+ Merchants worked with to date ● Large and growing addressable market in local ● Groupon’s two-sided marketplace has 1.5 Billion+ massive global scale A leading local Groupons sold to date marketplace with ● Nearly 60% of our customer base has been shopping Groupon for 3+ years2 room to gr
Slide 8: Positioned to grow wallet share with global consumers
Our customers... Positioned to ● We believe there are 80+ Grouponable moments in a single grow wallet have an average household year... income of $75K1 share with ● ...and Groupon is only capturing 4% of global those experiences consumers live in a city ● Executing on our strategic priorities create
Slide 9: Our Strategy for Growth
Our Strategy for Growth
Slide 10: The destination for experiences
The destination for experiences. ● By putting our new customer and merchant value propositions front and center we believe we can build a new destination marketplace experience to complement our inspiration marketplace ● Strategy is laser-focused on addressing disconnect between our large market opp
Slide 11: Groupon can unlock a powerful marketplace flywheel
Right Inventory in the Right Markets Merchant Self-Service Location and Tools Personalization Groupon can unlock a powerful marketplace flywheel Amazing Merchant Exp Amazing Mobile Growth CX Customer and Traffic New Search, Relevance & Scale Navigation Features Frictionless Exp; Bookable Inventory 11
Slide 12: Expand Inventory
Expand Inventory
Slide 13: Expanding inventory is critical to our growth
Expanding inventory is critical to our growth 3 key inventory products: Deals, Offers, and Market Rate Our goal is to provide value to merchants at any stage of their growth cycle and encourage them to list more inventory with Groupon ● Deals: remove restrictions on deeply-discounted inventory to dr
Slide 14: Portfolio of complementary inventory listing options
Portfolio of complementary inventory listing options gives merchants more ways to monetize their relationship with Groupon Deals Deals now have fewer restrictions, broadening their consumer appeal ● Our customers want fewer repeat restrictions so they can try a Deal more than once ● By relaxing Deal
Slide 15: Expanding Inventory: scaling in North America
Expanding Inventory: scaling in North Remove repeat purchase restrictions on Deals in all America verticals 2021 goal: increase the percent of Deal inventory now ● available for repeat purchase to 80% Expected to increase amount ● Progress to-date: ~75% of Deal inventory is now of purchasable invent
Slide 16: Improve the Merchant & Customer Experiences
Improve the Merchant & Customer Experiences
Slide 17: Prioritize our merchants' success
Prioritize our merchants’ success Partner with our merchants to help them grow their businesses Roadmap focused on merchant tools that allow them to build, grow and scale their businesses on the Groupon marketplace Shift Groupon from high-touch model to one where merchants use proven self-service to
Slide 18: Then vs Now
Then vs Now THEN Providing merchants with a full-service platform ● Phone interaction required to join the marketplace that they can leverage to build and grow their ● Launching a Deal? Another labor intensive interaction required businesses ● Just want to change content? Another labor intensive int
Slide 19: Merchant Case Study: Large Theme Park
Merchant YTD Gross Bookings +20% Merchant YTD Growth vs. 2019 driven by: Merchant Case ● Additional days live Study: Large ● Integrated their revenue management systems with the Groupon platform Theme Park ○ Enabled merchant to dynamically price their Groupon campaigns Leveraging the Groupon ● Lever
Slide 20: Merchant Case Study: Chain of Family Entertainment Centers
Merchant YTD Gross Bookings +140% Merchant YTD Growth vs. 2019 driven by: Merchant Case ● Increased the number of their locations working with Groupon by nearly 30% vs Study: Chain of 2019 Leveraging Groupon as an always-on sales Family ● channel, moving from an average listing time Entertainment of
Slide 21: Launching new partnerships to help merchants expand reach
Launching new ● Launched new partnership with Square in ● Announced U.S. distribution partnership with partnerships to October that allows local merchants to: Google ○ Easily create Groupon campaigns directly from ○ Google Pay mobile app users will have direct help merchants the Square App marketpla
Slide 22: Deliver an amazing customer experience
Product roadmap focuses on increasing customer purchase frequency Leverage machine learning to produce rapid insights that power curation, search relevance and other UX improvements Deliver an Position Groupon as a destination where consumers go to discover fun and memorable experiences through a am
Slide 23: Reimagining the customer experience
Personalized customer Reimagining the customer journey experience Better search, browse and discover New customer experience intended to drive sell-through of our expanding inventory base, grow purchase frequency over time, and begin to bend the consumer perception of Groupon from inspiration-only t
Slide 24: Launched and scaled a new customer experience in NA
Discovery Buy it again Search & Ranking App + mweb launched in April Launched in April Launched in April Desktop launched in July Launched and scaled a new customer experience in NA Fundamentally changed the user experience; from concept to delivery in just six months 24
Slide 25: Product roadmap
Steady cadence of new features will improve the customer and Product roadmap merchant experiences Q1, Q2 & Q3 2021 (launched) Q4 2021 / Early 2022 ✔ Groupon Connect for Beauty & Wellness • Square integration ✔ Self-service: • Merchant acquisition funnel optimization Merchant ● Int’l expansion • Scal
Slide 26: Marketing
Marketing
Slide 27: Strategically leveraging marketing
Strategically leveraging marketing Recently launched brand repositioning campaign, ‘Grab Life by the Groupon’, influencer campaigns and a new blog, The Gist, that brings our inventory and marketplace modernization work to life to help to shift our brand perception to the destination for Local 27
Slide 28: Resetting Our Cost Structure
Resetting Our Cost Structure
Slide 29: Resetting our cost structure
Multi-phase restructuring plan is now largely Resetting our complete cost structure On track to realize ~$225M of run-rate cost savings from restructuring actions Committed to operational rigor: lower costs, improve Reduced cost structure expected to drive speed and leverage greater flow-through to A
Slide 30: Third Quarter Results
Third Quarter Results
Slide 31: Key third quarter results
Key third quarter results Active Customers 24M Units 16M Billings $553M Revenue $214M Gross Profit $181M Adjusted EBITDA1 $35M Cash (as of 9/30)2 $477M 1. Adjusted EBITDA (AEBITDA) is a non-GAAP financial measure. See the appendix for a reconciliation to the most comparable U.S. GAAP financial measure,
Slide 32: Additional insights on third quarter results
Increased marketing investment Sold 16 million units in the third in the quarter as we aimed to quarter, demonstrating our scale further accelerate recovery and reshape our brand perception as the destination for Local Additional insights on third quarter results 7% lift in units per customer in NA
Slide 33: Improving the Composition of our Customer Base
NA Active Local Customers 1 +4% +10% Improving the Composition of our Customer Base Focused on growing our high-value Local customer base and unlocking purchase frequency to capture more customer wallet share and drive more demand to Groupon merchants Q1 2021 Q2 2021 Q3 2021 1. NA Active Local Custo
Slide 34: 4Q21 & FY21 Perspective
4Q21 & FY21 Perspective
Slide 35: FY21 outlook & 4Q21 perspective
Outlook ● Revenue expected to be $950 million to $975 million ● Adjusted EBITDA expected to be $130 million to $135 million Factors to Consider ● Expect global billings to moderately increase in Q4 vs Q3; and we may be impacted by macro-environment (e.g., level of FY21 outlook & seasonal Local deman
Slide 36: Unlocking the power of our financial model
Unlocking the power of our financial model ● Durable business model and solid balance sheet provide a foundation for growth ● Improving customer and merchant value propositions to capitalize on our large addressable market opportunity ● Executing on our priorities to Expand Inventory and Modernize t
Slide 37: Appendix
Appendix
Slide 38: 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 39: Non-GAAP Reconciliations: Adjusted EBITDA - Quarterly
Non-GAAP Reconciliations* Adjusted EBITDA - Quarterly (in thousands) *See Q3 2021 earnings release press release posted on our Investor Relations website for additional information regarding non-GAAP financial measures 39
Slide 40: Non-GAAP Reconciliations: Expected Adjusted EBITDA Range
Non-GAAP Reconciliations* Expected Adjusted EBITDA Range (in thousands) *See Q3 2021 earnings release press release posted on our Investor Relations website for additional information regarding non-GAAP financial measures 40
Slide 41: Non-GAAP Reconciliations: Free Cash Flow
Non-GAAP Reconciliations* Free Cash Flow (in thousands) *See Q3 2021 earnings release press release posted on our Investor Relations website for additional information regarding non-GAAP financial measures 41