Groupon : Q1 2024 Earnings Slides

Groupon 1st Quarter Earnings

May 9th, 2024

Agenda

Dusan Senkypl

CEO

Jiri Ponrt

CFO

Rana Kashyap

SVP, Corp Dev & IR

• CEO Commentary
• Financial Overview
• Guidance
• Q&A

2

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 ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), including statements regarding the Company's future results of operations and financial position, business strategy and plans and the Company's objectives for future operations and future liquidity. The words "may," "will," "should," "could," "expect," "anticipate," "believe," "estimate," "intend," "continue" and other similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on current expectations and projections about future events and financial trends that we believe may affect the Company's financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements involve risks and uncertainties that could cause the Company actual results to differ materially from those expressed or implied in the Company's forward-looking statements. Such risks and uncertainties include, but are not limited to, the Company's ability to execute and achieve the expected benefits of the Company's go-forward strategy; execution of the Company's business and marketing strategies; volatility in the Company's operating results; challenges arising from the Company's international operations, including fluctuations in currency exchange rates, legal and regulatory developments in the jurisdictions in which the Company operates and geopolitical instability resulting from the conflicts in Ukraine and the Middle East; global economic uncertainty, including as a result of inflationary pressures; retaining and adding high quality merchants and third-party business partners; retaining existing customers and adding new customers; competing successfully in the Company's industry; providing a strong mobile experience for the Company's customers; managing refund risks; retaining and attracting members of the Company's executive and management teams and other qualified employees and personnel; customer and merchant fraud; payment-related risks; the Company's reliance on email, Internet search engines and mobile application marketplaces to drive traffic to the Company's marketplace; cybersecurity breaches; maintaining and improving the Company's information technology infrastructure; reliance on cloud-based computing platforms; completing and realizing the anticipated benefits from acquisitions, dispositions, joint ventures and strategic investments; lack of control over minority investments; managing inventory and order fulfillment risks; claims related to product and service offerings; protecting the Company's intellectual property; maintaining a strong brand; the impact of future and pending litigation; compliance with domestic and foreign laws and regulations, including the CARD Act, GDPR, CPRA and other privacy-related laws and regulations of the Internet and e-commerce; classification of the Company's independent contractors, agency workers, or employees; the Company's ability to remediate the Company's material weakness over internal control over financial reporting; risks relating to information or content published or made available on the Company's websites or service offerings we make available; exposure to greater than anticipated tax liabilities; adoption of tax laws; the Company's ability to use the Company's tax attributes; impacts if we become subject to the Bank Secrecy Act or other anti-money laundering or money transmission laws or regulations; the Company's ability to raise capital if necessary; risks related to the Company's access to capital and outstanding indebtedness, including the Company's 1.125% Convertible Senior Notes due 2026 (the "2026 Notes"); the Company's Common Stock, including volatility in the Company's stock price; the Company's ability to realize the anticipated benefits from the capped call transactions relating to the Company's 2026 Convertible Notes; and those risks and other factors discussed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year-ended December 31, 2023, as well as in our condensed consolidated financial statements, related notes, and the other financial information appearing elsewhere in this report and our other filings with the Securities and Exchange Commission (the "SEC"). Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Neither the Company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements for any reason after the date of this report to conform these statements to actual results or to future events or circumstances. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

As used herein, "Groupon," "the Company," "we," "our," "us" and similar terms include Groupon, Inc. and its subsidiaries, unless the context indicates otherwise.

3

CEO Commentary

First Quarter Key Takeaways

1Q24 Financial Metrics

• Revenue +1% vs last year
• • 2016 is the last time revenue grew on a consolidated basis
• Ex Goods, North America +8% vs last year
• • Sequential growth in North America Local & Travel active customers1
• 4th consecutive quarter of positive Adjusted EBITDA
• • Last twelve months Adjusted EBITDA = $80 million
• Free Cash Flow = -$14 million
• • +$72 million improvement vs last year

1Q24 Financial Snapshot

Total Revenue (YoY % Change)

Revenue by Geography (YoY % Change)

Adjusted EBITDA2 ($M)

Free Cash Flow2 ($M)

1)	Reflects the total number of unique user accounts that have made a purchase during the trailing twelve months ("TTM") either through one of our online marketplaces or directly with a merchant for which we earned a commission.	5
2)	Adjusted EBITDA (AEBITDA) and Free Cash Flow are non-GAAP financial measures. See the appendix for a reconciliation to the most comparable U.S. GAAP financial measure, "Net income (loss)" and "Net cash provided by (used in) operating activities"

Marketplace management

Demand side

Q1 traffic trends

• Continued positive growth in paid traffic
• Improving trajectory of direct traffic and managed channels

Paid Marketing

• Delivered desired ROI targets
• Continued growth in SEM & Display

Supply side

Strong performers

• Things to do
• Enterprise
• North America Travel

Launching Regionalisation

• Assortment Strategy
• Driving Deal Quality
• City dedicated sales reps

6

Product Update - Performance drop investigation

• Performance issue starting mid-March: impressions ok, conversion drop
• Multiple issues detected and in process of being fixed
• • Fraud platform migration
  • Legacy search & relevance algorithm
• Priority #1 project for entire product & engineering team
• New front-endramp-up pulled back to 3% of North America web traffic and expect to ramp up later this quarter
• As of today, we have recovered majority of performance drop but it will impact Q2 results

7

Strategy

- Short Term

Focus & Outlook:

Merchant Flywheel

Deal Quality:

Deal Curationthrough automation Promoting merchant's USPs

Outlook:

AI deal generation

Performance Dashboard

• Insights in Merchant Centre

Outlook: Deal lifecycle management (~Merchant Potential)

Marketing and pricing experts:

Promotions Explained

Promotions Management

Outlook:

Dynamic pricing based on merchant performance and merchant goals

Snap promo campaigns

Gifting:

Promoting Premium Services Creating new seasons for Merchants

Outlook:

Selling gift cards through Groupon

Transparency on Promotions

Merchant Uniqueness: Videos / Reels

Outlook: Promoting USPs through videos Targeting local community

Bookability 2.0:

Plug & Play Connectivity Integration with booking engines and channel managers

Buy now & Book Later

Outlook:

Yield Management Full Price List Booking Solution for small merchants

8

Strategy

- Short Term

Focus & Outlook:

Customer Flywheel

Redemption specifics

Original Prices Accuracy

Bookability 2.0: Seamless booking flow incl. voucher

auto redemption Increased share of bookable deals

Outlook:

What & When Intent Supply Expansion

through booking engines

connectivityDeal Quality and Uniqueness: Deal Curation

Low-Quality Merchants Removal

Gifting

- Key Seasons

- Customer Education

Outlook:

Multiple gifting occasions all year round

Gift Advisor

Improved Personalisation Gift Packaging

SEO Enhancements

Freshness

and Engagement:

Videos / Reels

Outlook: Consuming deals through videos

9

Financial Overview