CHICAGO--(BUSINESS WIRE)--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.
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Groupon, Inc. |
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Summary Consolidated and Segment Results |
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| 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) | |||||||||||||||||||
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Revenue (gross billings of $415,269, $1,247,873, $34,082, $745,348 and $4,002,506) |
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| 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.
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Groupon, Inc. |
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| 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 | ||||||||||||||||||||
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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. |