Groupon, Inc. · NASDAQ:GRPN
Groupon — Q3 2018 Earnings Presentation
21 slides from Groupon's earnings presentation, November 2018
Slide 1: 3Q18 Earnings
3Q18 EARNINGS November 2018 NASDAQ: GRPN / ir@groupon.com
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 2018
Focusing on Our Key Priorities for 2018 Enhance the customer experience Establish Groupon as a with a mobile-first strategy, through true platform by aggregating third- innovative, frictionless products, party and Groupon-sourced supply differentiated local supply, coupled and increasing distributio
Slide 5: Enhancing our Financial Profile
Enhancing our Financial Profile Focus on driving long-term gross profit dollar growth • Continued focus on core North America Local business; emerging products such as Groupon+™, Gross Profit bookability, and marketplace • Unlock International potential by executing on North America playbook Plan to
Slide 6: 2018 Adjusted EBITDA Guidance Targeting Double-Digit Growth
2018 Adjusted EBITDA Guidance Targeting Double- Digit Growth 2018 Guidance Adjusted EBITDA1 (USD millions) 2017 2018 Actual Guidance $250 $280-290 (12-16% y/y growth) (1) Adjusted EBITDA (AEBITDA) is a non-GAAP financial measure. See the appendix for a reconciliation to the most comparable U.S. GAAP
Slide 7: Financial Information and Operating Metrics
FINANCIAL INFORMATION AND OPERATING METRICS 7
Slide 8: Large Customer Base with Solid Gross Profit per Customer
Large Customer Base with Solid Gross Profit per Customer Global Active Customers1 (millions) Global TTM Gross Profit / Active Customer1, 2 +4% y/y 49.5 49.6 $26.93 $27.16 $27.27 $27.51 49.1 49.3 48.8 $26.43 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 Gross profit per customer up 4% year-over-y
Slide 9: Gross Profit - Focus On Dollar Growth
Gross Profit - Focus On Dollar Growth (USD millions) North America International Global $265 $122 Flat $387 -1% y/y y/y -2% y/y $102 $105 $104 $102 $325 $324 $220 $309 $306 $219 $208 $204 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 ex-f/x 2% (1%) 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 $55 -2% $265 y/y -2% $197 y/y Flat y/y $220 $219 $208 $204 $163 $167 $165 $159 $37 $38 $31 $31 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 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 +6% Profit y/y $76 $70 $72 Flat $68 $67 $122 y/y -12% $105 $104 $102 $35 y/y $102 $28 $25 $24 $22 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18
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% Marketing Spend -3% y/y $161 $152 Time to $144 $140 $140 Payback 12 to 18 months $49 $43 $53 $46 $47 • ROI tracking across marketing channels, platforms, a
Slide 13: SG&A – Benefiting From Operational Efficiency
SG&A – Benefiting From Operational Efficiency (USD millions) SG&A1 SBC2 and D&A Excludes IBM $225 $222 $219 $215 $201 $56 $53 $34 $49 $35 $45 $44 $30 $29 $29 $22 $18 $19 $16 $15 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 SBC D&A Excluding the charge related to the IBM matter, Global SG&A decl
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 $258 $261 $250 $145 $225 $212 $175 $106 $160 $97 $149 $131 $84 $71
Slide 15: Appendix
APPENDIX GROUPON |
Slide 16: Non-GAAP Reconciliations
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) 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Income (loss) from continuing operations
Slide 17: Non-GAAP Reconciliations Cont'd
Non-GAAP Reconciliations Cont’d EXPECTED ADJUSTED EBITDA RANGE THE FOLLOWING IS A RECONCILIATION OF THE COMPANY’S ANNUAL OUTLOOK FOR ADJUSTED EBITDA TO THE COMPANY’S OUTLOOK FOR THE MOST COMPARABLE U.S. GAAP PERFORMANCE MEASURE, “INCOME (LOSS) FROM CONTINUING OPERATIONS”: Year Ending (in thousands)
Slide 18: Non-GAAP Reconciliations Cont'd
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 Cont'd
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) 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Net cash pro
Slide 20: Non-GAAP Reconciliations Cont'd
Non-GAAP Reconciliations Cont’d Q3 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 TTM Operating cash flow $ 133,288 Operating cash outflow
Slide 21: Groupon
GROUPON GROUPON |