Groupon Announces Fourth Quarter 2011 Results

  • Revenue of $506.5 million, up 194% year-over-year
  • Free Cash Flow of $155.1 million, up 258% year-over-year
  • Operating Income of $15.0 million, up from $336.1 million loss
  • Non-GAAP EPS of negative $0.02, including $0.07 of tax from international operations, up from negative $0.53
  • Active customers increase to over 33 million, up over 275% year-over-year

CHICAGO--()--Groupon, Inc. (NASDAQ: GRPN) today announced financial results for its fourth quarter ended December 31, 2011.

Revenue increased 194% to $506.5 million in the fourth quarter 2011, compared to $172.2 million in the fourth quarter 2010. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter was $3.5 million. Gross billings, which reflects the gross amounts collected from customers for Groupons sold, excluding any applicable taxes and net of estimated refunds, increased 201% to $1.25 billion in the fourth quarter 2011, compared with $415.3 million in the fourth quarter 2010.

“Groupon had a strong fourth quarter and we finished 2011 having helped 250,000 local merchants across 47 countries grow their businesses while saving Groupon customers billions of dollars,” said Andrew Mason, CEO and Co-Founder of Groupon. “We will continue to invest in new services and tools that help our merchant partners be more successful and drive local commerce around the world.”

Operating income was $15.0 million in the fourth quarter 2011, compared with a loss from operations of $336.1 million in the fourth quarter 2010. This marks the company’s first quarter of operating profitability since Groupon began its international operations in the second quarter of 2010. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter was $11.6 million. Consolidated segment operating income (CSOI), which is a non-GAAP financial measure that excludes the impact of stock-based compensation and acquisition-related charges, improved to a gain of $48.0 million in the fourth quarter, compared with a loss of $143.4 million in the fourth quarter 2010. Fourth quarter 2011 operating results included losses of over $40 million principally from less mature markets within the international segment.

Operating cash flow increased 226% to $169.1 million for fourth quarter 2011, compared with $51.9 million for fourth quarter 2010. Free cash flow, which is a non-GAAP financial measure that reflects cash flow from operations less purchases of property and equipment, increased 258% to $155.1 million for the three months ended December 31, 2011, compared with $43.3 million for the three months ended December 31, 2010. At the end of the quarter, Groupon had $1.1 billion in cash and cash equivalents and no long-term debt.

Fourth quarter 2011 net loss attributable to common stockholders decreased by 89% to $42.7 million, or a loss of $0.08 per share, from a net loss attributable to stockholders of $378.6 million, or a loss of $1.08 per share, in fourth quarter 2010. Pro-forma net income attributable to common stockholders for the fourth quarter improved to a loss of $9.8 million, or a pro-forma loss of $0.02 per share, from a prior year pro-forma net loss attributable to common stockholders of $185.8 million, or a pro-forma loss per share of $0.53. Pro-forma net income is a non-GAAP financial measure that excludes the impact of stock-based compensation and acquisition-related charges. The pro-forma loss of $0.02 per share includes $34.8 million of tax expense, an effective tax rate of approximately 1,600%, related to profitability in certain international countries as well as additional income tax provisions related to the establishment of the company’s international headquarters in Switzerland. This resulted in an unusually high effective tax rate as compared to the company’s current average statutory rate of approximately 33%.

Full-Year 2011

Revenue increased 419% to $1.6 billion in 2011, compared with $312.9 million in revenue in 2010. The favorable impact on revenue from year-over-year changes in foreign exchange rates throughout the year was $43.4 million.

Gross billings increased 437% to $4.0 billion in 2011, compared with $745.3 million in gross billings in 2010.

Full year 2011 loss from operations was $203.4 million, compared with the loss from operations of $420.3 million in 2010. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the year was $9.8 million. Consolidated segment operating losses improved to a loss of $114.3 million in 2011 from a loss of $181.0 million in 2010.

Operating cash flow increased 234% to $290.5 million in 2011, compared with $86.9 million in 2010. Free cash flow increased 242% to $246.6 million for the twelve months ended December 31, 2011, compared with $72.2 million for the twelve months ended December 31, 2010.

Net loss attributable to common stockholders decreased to $350.8 million in 2011, or a loss of $0.97 per share, from a net loss attributable to common stockholders of $456.3 million, or a loss of $1.33 per share, in 2010. Pro-forma net loss attributable to common stockholders for the full year resulted in a loss of $261.8 million, or a pro-forma loss of $0.72 per share, from a prior year pro-forma net loss attributable to common stockholders of $217.0 million, or a pro-forma loss per share $0.63. The pro-forma loss per share of $0.72 includes $44.3 million of tax expense related to profitability in certain international countries as well as additional income tax provisions related to the establishment of the company’s international headquarters in Switzerland.

Groupon, Inc.

Summary Consolidated and Segment Results

 
  Three Months Ended   Twelve Months Ended
December 31, Y/Y % December 31, Y/Y %
  2010       2011   Growth   2010       2011   Growth
(dollars in thousands, except per share data)
(unaudited) (unaudited) (unaudited)

Revenue (gross billings of

$415,269, $1,247,873, $34,082, $745,348

and $4,002,506)

North America $ 88,363 $ 188,476 113.3 % $ 200,412 $ 643,818 221.2 %
International   83,861     317,999   279.2 %   112,529     980,923   771.7 %
Consolidated revenue $ 172,224   $ 506,475   194.1 % $ 312,941   $ 1,624,741   419.2 %
 
Operating (loss) income (336,129 ) 15,034 104.5 % (420,344 ) (203,380 ) 51.6 %
Consolidated segment operating (loss) income
North America $ (21,905 ) $ 35,786 263.4 % $ (10,437 ) $ 22,343 314.1 %
International   (121,456 )   12,172   110.0 %   (170,556 )   (136,670 ) 19.9 %
CSOI(1) $ (143,361 ) $ 47,958   133.5 % $ (180,993 ) $ (114,327 ) 36.8 %
 
Net loss attributable to common stockholders $ (378,610 ) $ (42,730 ) 88.7 % $ (456,320 ) $ (350,845 ) 23.1 %
Pro-forma net loss attributable to common stockholders(2) $ (185,842 ) $ (9,806 ) 94.7 % $ (216,969 ) $ (261,792 ) 20.7 %
 
Net loss per share attributable to common stockholders $ (1.08 ) $ (0.08 ) $ (1.33 ) $ (0.97 )
Pro-forma loss per share(3) $ (0.53 ) $ (0.02 ) $ (0.63 ) $ (0.72 )
 
Weighted average basic shares 351,494,664 528,421,712 342,698,772 362,261,324
Weighted average diluted shares 351,494,664 528,421,712 342,698,772 362,261,324

(1) Consolidated segment operating (loss) income, or CSOI, is a non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of this measure to the most applicable financial measure under U.S. GAAP. The company does not allocate stock-based compensation and acquisition-related expense to the segments.

(2) Pro-forma net income attributable to common stockholders is a non-GAAP financial measure. This measure excludes stock-based compensation and acquisition-related costs. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of this measure to the most applicable financial measure under U.S. GAAP.

(3) Pro-forma loss per share attributable to common stockholders is a non-GAAP financial measure. It calculates loss per share based on pro-forma net income attributable to common stockholders, which is described above. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of this measure to the most applicable financial measure under U.S. GAAP.

Fourth Quarter and Full-Year 2011 Highlights

  • As of December 31, 2011, Groupon’s worldwide active customer base grew to over 33 million, an increase of over 275% year-over-year and more than 20% quarter-over-quarter. Active customers are defined as customers who have purchased a Groupon in the trailing twelve months and may include individual customers with multiple registrations.
  • Trailing twelve month gross billings per average active customer, which is a proxy for the total annualized spend per average customer, increased to $188 in fourth quarter 2011 from $160 in fourth quarter 2010.
  • Fourth quarter 2011 North America segment results were aided by the company’s second annual Grouponicus seasonal promotion, which served 40 North American markets with local deals, travel deals and goods chosen specifically for their ‘giftability.’
  • Worldwide, more than 26 million people have downloaded the Groupon mobile app on their smartphones.
  • In just over six months from launching Groupon Now!, Groupon has expanded this offering to 31 markets and served deals from nearly 20,000 merchant partners in North America.
  • Groupon continued to invest in creating additional value for its merchant partners, with fourth quarter 2011 releases of merchant tools including Groupon Merchant Center, Groupon Scheduler and Groupon Rewards.
  • Groupon increased its long-term technology investments, expanding into new facilities in Palo Alto to accommodate the more than four times growth in its engineering and product development staff in 2011.

First Quarter 2012 Guidance

  • Revenue is expected to be between $510 million and $550 million, an increase of between 73% and 86% compared with first quarter 2011.
  • Income from operations is expected to be between $15 million and $35 million, compared with a loss from operations of $117.1 million in first quarter 2011.
  • This guidance includes approximately $35 million for stock-based compensation and acquisition-related expense, and it assumes, among other things, no additional business acquisitions or investments and no further revisions to stock-based compensation estimates.

A conference call will be webcast live today at 3:30 p.m. CT/4:30 p.m. ET, and will be available on Groupon’s investor relations website at http://investor.groupon.com. This call will contain forward-looking statements and other material information regarding the company’s financial and operating results.

Non-GAAP Financial Measures

This release includes the following financial measures defined as “non-GAAP financial measures” by the SEC: Free cash flow, CSOI and pro-forma net income. Groupon believes free cash flow is an important indicator for its business because it measures the amount of cash the company generates after spending on marketing, wages and benefits, capital expenditures and other items. Free cash flow also reflects changes in working capital. Groupon believes CSOI is an important measure for management to evaluate the performance of its business as it represents the operating results of its segments as reported under U.S. GAAP and does not include certain non-cash expenses. Groupon believes pro-forma net income is an important measure for management to evaluate the performance of its business, as it represents the net income of its segments as reported under U.S. GAAP and also does not include certain non-cash expenses. Free cash flow, CSOI and pro-forma net income may be different from similar measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For a reconciliation of these non-GAAP financial measures to the nearest comparable U.S. GAAP measures, see “Reconciliation of Non-GAAP Financial Measures” included in this release.

Note on Forward Looking Statements

The statements in this release that refer to plans and expectations for the next quarter or the future are forward-looking statements that involve a number of risks and uncertainties, and actual results could differ materially from those discussed. Factors that could cause or contribute to such differences include, but are not limited to, the factors included under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s registration statement on Form S-1, as amended, filed with the Securities and Exchange Commission on November 3, 2011, copies of which may be obtained by visiting the company’s Investor Relations web site at http://investor.groupon.com or the SEC’s web site at www.sec.gov. Groupon’s actual results could differ materially from those predicted or implied and reported results should not be considered an indication of future performance.

You should not rely upon forward-looking statements as predictions of future events. Although Groupon believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither the company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. The forward-looking statements reflect Groupon’s expectations as of February 8, 2012. Groupon undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this earnings release to conform these statements to actual results or to changes in its expectations.

Groupon encourages investors to use its investor relations website as a way of easily finding information about the company. Groupon promptly makes available on this website, free of charge, the reports that the company files or furnishes with the SEC, corporate governance information (including Groupon’s Code of Business Conduct and Ethics), and select press releases and social media postings.

Groupon, Inc.

Consolidated Statement of Cash Flows
Year Ended December 31,
  2009       2010       2011  
(in thousands)
(unaudited)
Net cash provided by operating activities $ 7,510 $ 86,885 $ 290,447
Net cash used in investing activities (1,961 ) (11,879 ) (147,433 )
Net cash provided by financing activities 3,798 30,445 867,205
Effect of exchange rate changes on cash and cash equivalents   -     1,069     (6,117 )
Net increase in cash and cash equivalents 9,347 106,520 1,004,102
Cash and cash equivalents, beginning of year   2,966     12,313     118,833  
Cash and cash equivalents, end of year $ 12,313   $ 118,833   $ 1,122,935  
Groupon, Inc.
Consolidated Statements of Operations
 
Three Months Ended

December 31,

Year Ended December 31,
  2010     2011     2009       2010       2011  
(dollars in thousands, except per share data)
(unaudited) (unaudited) (unaudited)
Revenue (gross billings of $415,269, $1,247,873, $34,082, $745,348 and $4,002,506) $ 172,224 $ 506,475 $ 14,540 $ 312,941 $ 1,624,741
Costs and expenses:
Cost of revenue 25,191 87,293 4,716 42,896 249,907
Marketing 200,927 156,461 5,053 290,569 769,634
Selling, general and administrative 116,896 247,431 5,848 196,637 813,117
Acquisition-related   165,339     256     -     203,183     (4,537 )
Total operating expenses   508,353     491,441     15,617     733,285     1,828,121  
(Loss) income from operations (336,129 ) 15,034 (1,077 ) (420,344 ) (203,380 )
Interest and other income (expense), net (1,646 ) (10,586 ) (16 ) 284 (778 )
Equity-method investment activity, net of tax   -     (6,678 )   -     -     (26,652 )
Loss before provision for income taxes (337,775 ) (2,230 ) (1,093 ) (420,060 ) (230,810 )
(Benefit) provision for income taxes   (2,172 )   34,800     248     (6,674 )   44,303  
Net loss (335,603 ) (37,030 ) (1,341 ) (413,386 ) (275,113 )
Less: Net loss (income) attributable to noncontrolling interests   22,373     (5,267 )   -     23,746     18,335  
Net loss attributable to Groupon, Inc. (313,230 ) (42,297 ) (1,341 ) (389,640 ) (256,778 )
Dividends on preferred stock (62 ) - (5,575 ) (1,362 ) -
Redemption of preferred stock in excess of carrying value (52,893 ) (433 ) - (52,893 ) (34,327 )
Adjustment of redeemable noncontrolling interests to redemption value   (12,425 )   -     -     (12,425 )   (59,740 )
Net loss attributable to common stockholders $ (378,610 ) $ (42,730 ) $ (6,916 ) $ (456,320 ) $ (350,845 )
 
Net loss per share attributable to common stockholders
Basic $ (1.08 ) $ (0.08 ) $ (0.02 ) $ (1.33 ) $ (0.97 )
Diluted $ (1.08 ) $ (0.08 ) $ (0.02 ) $ (1.33 ) $ (0.97 )
 
Weighted average number of shares outstanding
Basic 351,494,664 528,421,712 337,208,284 342,698,772 362,261,324
Diluted 351,494,664 528,421,712 337,208,284 342,698,772 362,261,324
Groupon, Inc.
Consolidated Balance Sheets
December 31,
  2010     2011
(in thousands)
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 118,833 $ 1,122,935
Accounts receivable, net 42,407 106,407
Prepaid expenses and other current assets   12,615   96,167
Total current assets 173,855 1,325,509
Property and equipment, net 16,490 51,800
Goodwill 132,038 167,303
Intangible assets, net 40,775 45,667
Other non-current assets   18,412   179,620
Total Assets $ 381,570 $ 1,769,899
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued merchant payable $ 219,952 $ 557,282
Other current liabilities   150,467   412,357
Total current liabilities 370,419 969,639
Deferred income taxes, non-current 604 8,016
Other non-current liabilities   1,017   70,348
Total Liabilities 372,040 1,048,003
Redeemable noncontrolling interest 2,983 2,275
Total Equity   6,547   719,621
Total Liabilities and Equity $ 381,570 $ 1,769,899
Groupon, Inc.
Segment Information
 
  Three Months Ended Twelve Months Ended
December 31, December 31,
2010 2011 2010 2011
(in thousands)
(unaudited) (unaudited) (unaudited)
North America
Revenue $ 88,363 $ 188,476 $ 200,412 $ 643,818
Segment operating expenses(1) 110,268 152,690 210,849 621,475
Segment operating (loss) income (21,905) 35,786 (10,437) 22,343
International
Revenue $ 83,861 $ 317,999 $ 112,529 $ 980,923
Segment operating expenses(1) 205,317 305,827 283,085 1,117,593
Segment operating (loss) income (121,456) 12,172 (170,556) (136,670)
Consolidated
Revenue $ 172,224 $ 506,475 $ 312,941 $ 1,624,741
Segment operating expenses(1) 315,585 458,517 493,934 1,739,068
Segment operating (loss) income (143,361) 47,958 (180,993) (114,327)
Stock-based compensation 27,429 32,668 36,168 93,590
Acquisition-related 165,339 256 203,183 (4,537)
Interest and other expense (income), net 1,646 10,586 (284) 778
Equity-method investment activity, net - 6,678 - 26,652
Loss before income taxes (337,775) (2,230) (420,060) (230,810)
Provision (benefit) for income taxes (2,172) 34,800 (6,674) 44,303
Net loss $(335,603) $ (37,030) $ (413,386) $ (275,113)
(1) Represents operating expenses, excluding stock-based compensation and acquisition-related expense, which are not allocated to segments.
Segment highlights
Y/Y revenue growth:
North America 855 % 113 % 1,278 % 221 %
International 100 % 279 % 100 % 772 %
Consolidated 1,761 % 194 % 2,052 % 419 %
Y/Y segment operating income growth:
North America 1,302 % 263 % 985 % 314 %
International (100) % 110 % (100) % 20 %
Consolidated 9,078 % 133 % 18,174 % 37 %
Revenue mix
North America 51 % 37 % 64 % 40 %
International 49 % 63 % 36 % 60 %
100 % 100 % 100 % 100 %
Groupon, Inc.
Supplemental Financial Information
Historical Consolidated Statements of Cash Flows
 
  Twelve Months Ended Three Months Ended Twelve Months Ended
Dec. 31, Mar. 31, June 30, Sept. 30, Dec. 31, Dec. 31,
  2010     2011     2011     2011     2011     2011  
(in thousands)
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Net cash provided by operating activities $ 86,885 $ 17,940 $ 39,019 $ 64,411 $ 169,077 $ 290,447
Net cash used in investing activities (11,879 ) (44,294 ) (25,184 ) (43,048 ) (34,907 ) (147,433 )
Net cash provided by (used in) financing activities 30,445 112,106 (422 ) 8,608 746,913 867,205
Effect of exchange rate changes on cash and cash equivalents   1,069     4,103     2,992     (11,129 )   (2,083 )   (6,117 )
Net increase in cash and cash equivalents 106,520 89,855 16,405 18,842 879,000 1,004,102
Cash and cash equivalents, beginning of period   12,313     118,833     208,688     225,093     243,935     118,833  
Cash and cash equivalents, end of period $ 118,833   $ 208,688   $ 225,093   $ 243,935   $ 1,122,935   $ 1,122,935  
Groupon, Inc.
Supplemental Financial Information
Historical Consolidated Statements of Operations
 
  Twelve Months Ended Three Months Ended Twelve Months Ended
Dec. 31, Mar. 31, June 30, Sept. 30, Dec. 31, Dec. 31,
  2010     2011     2011     2011     2011     2011  
(dollars in thousands, except per share data)
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Revenue $ 312,941 $ 295,523 $ 392,582 $ 430,161 $ 506,475 $ 1,624,741
Costs and expenses:
Cost of revenue 42,896 39,765 54,803 68,046 87,293 249,907
Marketing 290,569 230,085 212,739 170,349 156,461 769,634
Selling, general and administrative 196,637 142,821 226,067 196,798 247,431 813,117
Acquisition-related   203,183     -     -     (4,793 )   256     (4,537 )
Total operating expenses   733,285     412,671     493,609     430,400     491,441     1,828,121  
(Loss) income from operations (420,344 ) (117,148 ) (101,027 ) (239 ) 15,034 (203,380 )
Interest and other income (expense), net 284 1,060 479 8,269 (10,586 ) (778 )
Equity-method investment activity, net of tax   -     (882 )   (7,881 )   (11,211 )   (6,678 )   (26,652 )
Loss before provision for income taxes (420,060 ) (116,970 ) (108,429 ) (3,181 ) (2,230 ) (230,810 )
(Benefit) provision for income taxes   (6,674 )   (3,079 )   1,347     11,235     34,800     44,303  
Net loss (413,386 ) (113,891 ) (109,776 ) (14,416 ) (37,030 ) (275,113 )
Less: Net loss (income) attributable to noncontrolling interests   23,746     11,223     8,536     3,843     (5,267 )   18,335  
Net loss attributable to Groupon, Inc. $ (389,640 ) $ (102,668 ) $ (101,240 ) $ (10,573 ) $ (42,297 ) $ (256,778 )
 
Net loss per share attributable to common stockholders
Basic $ (1.33 ) $ (0.48 ) $ (0.35 ) $ (0.18 ) $ (0.08 ) $ (0.97 )
Diluted $ (1.33 ) $ (0.48 ) $ (0.35 ) $ (0.18 ) $ (0.08 ) $ (0.97 )
 
Weighted average number of shares outstanding
Basic 342,698,772 307,849,412 303,414,676 307,605,060 528,421,712 362,261,324
Diluted 342,698,772 307,849,412 303,414,676 307,605,060 528,421,712 362,261,324
Groupon, Inc.
Supplemental Financial Information
Historical Consolidated Balance Sheets
   
Dec. 31, Mar. 31, June 30, Sept. 30, Dec. 31,
2010 2011 2011 2011 2011
(in thousands)
(unaudited) (unaudited) (unaudited) (unaudited)
Assets
Current assets:
Cash and cash equivalents $ 118,833 $ 208,688 $ 225,093 $ 243,935 $ 1,122,935
Accounts receivable, net 42,407 60,717 99,674 109,852 106,407
Prepaid expenses and other current assets 12,615 21,324 50,947 111,856 96,167
Total current assets 173,855 290,729 375,714 465,643 1,325,509
Property and equipment, net 16,490 26,928 36,532 41,374 51,800
Goodwill 132,038 154,438 162,796 169,152 167,303
Intangible assets, net 40,775 43,052 39,516 50,141 45,667
Other non-current assets 18,412 26,263 23,154 69,257 179,620
Total Assets $ 381,570 $ 541,410 $ 637,712 $ 795,567 $ 1,769,899
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued merchant payable $ 219,952 $ 328,587 $ 440,927 $ 505,931 $ 557,282
Other current liabilities 150,467 190,890 239,691 260,762 412,357
Total current liabilities 370,419 519,477 680,618 766,693 969,639
Deferred income taxes, non-current 604 1,437 2,180 4,788 8,016
Other non-current liabilities 1,017 13,353 23,533 39,719 70,348
Total Liabilities 372,040 534,267 706,331 811,200 1,048,003
Redeemable noncontrolling interest 2,983 2,744 681 2,198 2,275
Total Equity 6,547 4,399 (69,300) (17,831) 719,621
Total Liabilities and Equity $ 381,570 $ 541,410 $ 637,712 $ 795,567 $ 1,769,899

Reconciliation of Non-GAAP Financial Measures

Free Cash Flow

The following is a reconciliation of free cash flow to the most comparable U.S. GAAP measure, “Net cash provided by operating activities,” for the years ended December 31, 2011, 2010, and 2009, and the three months ended December 31, 2011 and 2010:

  Three Months Ended      
December 31, Year Ended December 31,
2010   2011 2009 2010 2011
(in thousands)
(unaudited)
Net cash provided by operating activities $51,919 $ 169,077 $ 7,510 $86,885 $ 290,447
Purchases of property and equipment (8,589) (13,986) (290) (14,681) (43,811)
Free cash flow $43,330 $ 155,091 $ 7,220 $72,204 $ 246,636

Consolidated Segment Operating Income (CSOI)

The following is a reconciliation of CSOI to the most comparable U.S. GAAP measure, “(Loss) income from operations,” for the years ended December 31, 2011 and 2010 and the three months ended December 31, 2011 and 2010:

    Three Months Ended   Twelve Months Ended
December 31, December 31,
  2010       2011   2010       2011  
(in thousands)
(unaudited)
(Loss) income from operations $ (336,129 ) $ 15,034 $ (420,344 ) $ (203,380 )
Stock-based compensation(1) 27,429 32,668 36,168 93,590
Acquisition-related(2)   165,339     256   203,183     (4,537 )
CSOI $ (143,361 ) $ 47,958 $ (180,993 ) $ (114,327 )
(1)   Represents non-cash stock-based compensation expense recorded within selling, general and administrative expenses, marketing expenses and cost of revenue on the income statement.
(2) Primarily represents non-cash charges for remeasurement of the fair value of contingent consideration related to acquisitions made by us in 2010 and 2011.

Pro-forma net loss attributable to common stockholders

The following is a reconciliation of pro-forma net loss attributable to common stockholders to the most comparable U.S. GAAP measure, “Net loss attributable to common stockholders,” for the years ended December 31, 2011 and 2010 and the three months ended December 31, 2011 and 2010:

  Three Months Ended    
December 31, Year Ended December 31,
  2010       2011     2010     2011  
(in thousands)
(unaudited)
Net loss attributable to common stockholders $ (378,610 ) $ (42,730 ) $ (456,320 ) $ (350,845 )
Stock-based compensation(1) 27,429 32,668 36,168 93,590
Acquisition-related(2)   165,339     256     203,183     (4,537 )
Pro-forma net loss attributable to common stockholders $ (185,842 ) $ (9,806 ) $ (216,969 ) $ (261,792 )
 
Weighted average basic shares 351,494,664 528,421,712 342,698,772 362,261,324
Pro-forma loss per share $ (0.53 ) $ (0.02 ) $ (0.63 ) $ (0.72 )
(1)   Represents non-cash stock-based compensation expense recorded within selling, general and administrative expenses, marketing expenses and cost of revenue on the income statement.
(2) Primarily represents non-cash charges for remeasurement of the fair value of contingent consideration related to acquisitions made by us in 2010 and 2011.

Foreign exchange rate neutral operating results

The effect on the company’s consolidated statements of operations from changes in exchange rates versus the U.S. Dollar is as follows:

    Three Months Ended     Year Ended
December 31, 2011     December 31, 2011
At Avg. Exchange Rate   At Avg. 2010 Exchange Rate  

Q4 2010

As Reported As Reported
Rates (1)

Effect (2)

Rates (1) Effect (2)

(in thousands)

(unaudited)
 
Revenue 509,958 (3,483) 506,475 1,581,323 43,418 1,624,741
Income (loss) from operations $ 3,428 $ 11,606 $ 15,034 $ (193,566) $ (9,814) $ (203,380)
(1)   Represents the outcome that would have resulted had exchange rates in the reported period been the same as those in effect in the comparable prior year period for operating results.
(2) Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable prior year period for operating results.

Contacts

Groupon
Investor Relations
Kartik Ramachandran, 312-999-3098
ir@groupon.com
Public Relations
Julie Mossler, 312-242-2033

Sharing

Contacts

Groupon
Investor Relations
Kartik Ramachandran, 312-999-3098
ir@groupon.com
Public Relations
Julie Mossler, 312-242-2033