Category: Uncategorised

Groupon Announces Fourth Quarter and Fiscal Year 2016 Results

2017-02-15 08:31 ET - News Release
 
Added 5.2 million net new customers and achieved double digit Gross Profit growth in North America for 2016
 
Fourth quarter revenue of $934.9 million, $3.1 billion for the full year
Fourth quarter gross billings of $1.7 billion, $6.1 billion for the full year
Fourth quarter net loss of $50.2 million, $183.3 million for the full year
Fourth quarter Adjusted EBITDA of $80.6 million, $178.1 million for the full year
Fourth quarter loss per share of $0.09; non-GAAP earnings per share of $0.07
Operating cash flow of $117.1 million for the full year; free cash flow of $48.2 million for the full year
Added 5.2 million net new customers in North America, bringing North America active customers to 31.1 million; global active customers reached 52.7 million
2017 gross profit guidance of $1.30 billion to $1.35 billion, an increase of $40 to $90 million compared to 2016 results for the countries in our go-forward footprint on an FX-neutral basis
2017 Adjusted EBITDA guidance of $200 million to $240 million, an increase of $16 to $56 million compared to 2016 results for our go-forward footprint on an FX-neutral basis
 
Groupon, Inc. (NASDAQ: GRPN) today announced financial results for the quarter and fiscal year ended December 31, 2016.
 
"In 2016, our concentrated focus on key strategic initiatives provided a strong foundation for Groupon going forward and resulted in a streamlined global operation, a healthier Goods business, improved customer service and strong customer acquisitions after a successful online and offline marketing strategy," said CEO Rich Williams. "We look forward to continuing to invest in the Groupon brand and unlocking the true potential of our business as we make Groupon the daily habit in local commerce."
 
Groupon’s fourth quarter and full year 2016 consolidated financial results include the results of LivingSocial’s operations for the partial period from the acquisition date of October 31, 2016 to December 31, 2016.
 
Fourth Quarter 2016 Summary
 
Gross Billings were $1.70 billion in the fourth quarter 2016, down slightly from $1.71 billion in the fourth quarter 2015. Gross billings were impacted by dispositions and country exits in connection with Groupon’s restructuring efforts, partially offset by the addition of LivingSocial. On a same-country, FX-neutral basis, gross billings grew 2% year-over-year. North America gross billings increased 6%, reflecting growth of new customers as well as the acquisition of LivingSocial, while EMEA declined by 9% (5% FX-neutral) and Rest of World declined by 15% (15% FX-neutral). Gross billings reflect the total dollar value of customer purchases of goods and services.
Revenue was $934.9 million in the fourth quarter 2016, compared with $917.2 million in the fourth quarter 2015. Revenue increased 2% globally, or 4% on a same-country, FX-neutral basis. North America revenue increased 5%, EMEA declined 2% (increased 1% FX-neutral) and Rest of World declined 12% (8% FX-neutral).
Gross profit was $369.9 million in the fourth quarter 2016, compared with $371.7 million in the fourth quarter 2015. North America gross profit increased 14%, EMEA declined 25% and Rest of World declined 10%.
Net loss from continuing operations was $50.2 million in the fourth quarter 2016, compared with $32.6 million in the fourth quarter 2015. Net loss attributable to common stockholders was $52.6 million, or $0.09 per share. Net loss was negatively impacted by non-operating losses of $40.8 million in the fourth quarter 2016 from declines in the fair value of investments, primarily attributable to Ticket Monster.
Non-GAAP net income attributable to common stockholders was $42.5 million, or $0.07 per share.
Adjusted EBITDA, a non-GAAP performance measure, was $80.6 million in the fourth quarter 2016, compared with $67.0 million in the fourth quarter 2015, reflecting execution of our streamlining initiatives.
Global units sold declined 0.4% year-over-year to 62.0 million, primarily driven by country exits and our restructuring efforts in international segments. Units in North America increased 3%, EMEA grew 6%, and Rest of World declined 29%. Units are defined as purchases made through our online marketplaces, before refunds and cancellations.
Operating cash flow was $288.7 million in the fourth quarter 2016. Free cash flow, a non-GAAP financial measure, was $269.0 million in the fourth quarter 2016.
Cash and cash equivalents as of December 31, 2016 were $891.8 million, and we had no outstanding borrowings under our $250.0 million revolving credit facility.
Full Year 2016 Summary
 
Gross Billings were $6.1 billion in 2016, compared with $6.3 billion in 2015. On a same-country, FX-neutral basis, gross billings grew 2% year-over-year. North America gross billings increased 6%, reflecting the contribution of new active customer cohorts, while EMEA declined by 11% (9% FX-neutral) and Rest of World declined by 24% (19% FX-neutral).
Revenue was $3.14 billion in 2016, compared with $3.12 billion in 2015. Revenue grew 1% globally, or 4% on a same-country, FX-neutral basis. North America revenue increased 5%, EMEA declined 5% (3% FX-neutral) and Rest of World declined 19% (11% FX-neutral).
Gross profit was $1.36 billion in 2016, compared with $1.39 billion in 2015. North America gross profit increased 10%, EMEA declined 19% and Rest of World declined 21%.
Net loss from continuing operations was $183.3 million in 2016, compared with $89.2 million in 2015. Net loss attributable to common stockholders was $194.6 million, or $0.34 per share. Net loss was negatively impacted by non-operating losses of $48.1 million in the full year from declines in the fair value of investments, primarily attributable to Ticket Monster.
Non-GAAP net income attributable to common stockholders was $23.0 million, or $0.04 per share.
Adjusted EBITDA was $178.1 million in 2016, compared with $256.8 million in 2015 and ahead of our guidance range of $150 million to $165 million, reflecting our increased marketing investments in customer acquisition.
Global units sold declined 3% year-over-year to 214.3 million in 2016. Units in North America increased 5%, EMEA declined 4%, and Rest of World declined 29%.
Operating cash flow for 2016 was $117.1 million. Free cash flow, a non-GAAP financial measure, was $48.2 million in 2016, which reflects the adverse cash flow impact of restructuring charges, country exits, and the funding of our securities litigation settlement.
Definitions and reconciliations of all non-GAAP financial measures are included below in the section titled “Non-GAAP Financial Measures” and in the accompanying tables.
 
Fourth Quarter and Full Year 2016 Highlights
 
North America Local Billings grew 11% year-over-year in the fourth quarter 2016. North America Local Billings growth accelerated throughout 2016 reaching 11% year-over-year growth in the fourth quarter 2016. LivingSocial contributed 4 percentage points to fourth quarter 2016 year-over-year growth.
North America customer additions accelerated to 2.0 million in the fourth quarter 2016. North America active customers reached 31.1 million as of December 31, 2016, adding 5.2 million for 2016, which marks the highest acquisition in four years. Fourth quarter net additions were 2.0 million, with 1.0 million unique customers added from LivingSocial. Active customers represent unique user accounts that have made a purchase through one of our online marketplaces during the trailing twelve months.
North America gross profit increased $31.5 million year-over-year in the fourth quarter 2016. North America gross profit growth accelerated to 14% year-over-year in the fourth quarter 2016 driven by 16% growth in Local and 14% growth in Shopping. For 2016, North America gross profit increased $84.0 million to $885.5 million.
SG&A declined $33.5 million year-over-year in the fourth quarter 2016, on solid execution of operational streamlining initiatives. SG&A in all markets declined year-over-year in the fourth quarter 2016 as we continue to drive operational efficiency through regional shared service centers and automated processes, which we expect to not only improve our customer service but also create greater operating leverage over time. SG&A declined $126.6 million year-over-year in 2016, or $89.1 million excluding the impact of a litigation reserve recorded in 2015.
Share Repurchase
 
During the fourth quarter 2016, Groupon repurchased 12,397,795 shares of its common stock for an aggregate purchase price of $49.9 million. During the full year 2016, Groupon repurchased 43,227,743 shares of its common stock for an aggregate purchase price of $162.4 million. Up to $195.0 million of common stock was available for repurchase under Groupon’s share repurchase program as of December 31, 2016. The timing and amount of any share repurchases are determined based on market conditions, share price and other factors, and the program may be discontinued or suspended at any time.
 
Outlook
 
Groupon is providing its outlook for 2017, which reflects current foreign exchange rates, as well as expected marketing investments, the acquisition of LivingSocial, potential disruptions related to country exits, and cost benefits associated with our streamlining initiatives. As previously announced, Groupon expects to exit 11 countries as part of its streamline and simplify initiative, and the company expects to report these countries as discontinued operations beginning in first quarter 2017. The basis for our full year 2017 guidance is continuing operations.
 
For the full year 2017, Groupon expects gross profit to be in the range of $1.30 billion and $1.35 billion, an increase of $40 to $90 million compared to full year 2016 results for the 15 countries in our go-forward footprint on an FX-neutral basis.
Groupon also expects Adjusted EBITDA to be in the range of $200 million and $240 million, an increase of $16 to $56 million compared to full year 2016 results for the 15 countries in our go-forward footprint on an FX-neutral basis.
Conference Call
 
A conference call will be webcast live today at 9:00 a.m. CST / 10:00 a.m. EST 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.
 
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 Global Code of Conduct), and select press releases and social media postings. Groupon uses its investor relations site (investor.groupon.com) and its blog (https://www.groupon.com/blog) as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
 
Non-GAAP Financial Measures
 
In addition to financial results reported in accordance with U.S. GAAP, we have provided the following non-GAAP financial measures: Adjusted EBITDA, non-GAAP net income (loss) attributable to common stockholders, non-GAAP earnings (loss) per share, free cash flow and foreign currency exchange rate neutral operating results. These non-GAAP financial measures, which are presented on a continuing operations basis, are intended to aid investors in better understanding our current financial performance and prospects for the future as seen through the eyes of management. We believe that these non-GAAP financial measures facilitate comparisons with our historical results and with the results of peer companies who present similar measures (although other companies may define non-GAAP measures differently than we define them, even when similar terms are used to identify such measures). However, these non-GAAP financial measures are not intended to be a substitute for those reported in accordance with U.S. GAAP. For reconciliations of these measures to the most applicable financial measures under U.S. GAAP, see "Non-GAAP Reconciliation Schedules" and "Supplemental Financial Information and Business Metrics" included in the tables accompanying this release.
 
We exclude the following items from one or more of our non-GAAP financial measures:
 
Stock-based compensation. We exclude stock-based compensation because it is primarily non-cash in nature and we believe that non-GAAP financial measures excluding this item provide meaningful supplemental information about our operating performance and liquidity.
 
Acquisition-related expense (benefit), net. Acquisition-related expense (benefit), net is comprised of the change in the fair value of contingent consideration arrangements and external transaction costs related to business combinations, primarily consisting of legal and advisory fees. The composition of our contingent consideration arrangements and the impact of those arrangements on our operating results vary over time based on a number of factors, including the terms of our business combinations and the timing of those transactions. We exclude acquisition-related expense (benefit), net because we believe that non-GAAP financial measures excluding this item provide meaningful supplemental information about our operating performance and facilitate comparisons to our historical operating results.
 
Depreciation and amortization. We exclude depreciation and amortization expenses because they are non-cash in nature and we believe that non-GAAP financial measures excluding these items provide meaningful supplemental information about our operating performance and liquidity.
 
Interest and Other Non-Operating Items. Interest and other non-operating items include: gains and losses related to minority investments, foreign currency gains and losses, interest income and interest expense, including non-cash interest expense from our convertible senior notes. We exclude interest and other non-operating items from certain of our non-GAAP financial measures because we believe that excluding these items provides meaningful supplemental information about our core operating performance and facilitates comparisons to our historical operating results.
 
Special Charges and Credits. For the years ended December 31, 2016 and 2015, special charges and credits included gains from business dispositions and charges related to our restructuring plan. For the year ended December 31, 2015, special charges and credits also included the write-off of a prepaid asset related to a marketing program that was discontinued because the counterparty ceased operations and the expense related to a significant increase in the contingent liability for our securities litigation matter. We exclude special charges and credits from Adjusted EBITDA because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons with our historical results.
 
Income Tax Effect of Items Excluded from Non-GAAP Financial Measures. Wedetermine the income tax effect of items excluded from our measures of non-GAAP net income (loss) attributable to common stockholders and non-GAAP earnings (loss) per share by performing a tax provision calculation using pre-tax income (loss) amounts that have been adjusted to exclude those items in the respective jurisdictions to which they relate. The difference between the income tax expense (benefit) determined on that basis and our reported income tax expense (benefit) represents the income tax effect of the excluded items.
 
Descriptions of the non-GAAP financial measures included in this release and the accompanying tables are as follows:
 
Foreign exchange rate neutral operating results show our current period operating results as if foreign currency exchange rates had remained the same as those in effect in the prior-year period. We present foreign exchange rate neutral information to facilitate comparisons to our historical operating results.
 
Adjusted EBITDA is a non-GAAP performance measure that we define as net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, acquisition-related expense (benefit), net, and other special charges and credits. Our definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key measure used by our management and Board of Directors to evaluate operating performance, generate future operating plans, and make strategic decisions regarding the allocation of capital. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating performance in the same manner as our management and Board of Directors.
 
Non-GAAP net income (loss) attributable to common stockholders and non-GAAPearnings (loss) per share are non-GAAP performance measures that adjust our net income (loss) attributable to common stockholders and earnings (loss) per share to exclude the impact of:
 
stock-based compensation,
amortization of acquired intangible assets,
acquisition-related expense (benefit), net,
restructuring charges,
gains on business dispositions,
non-cash interest expense on convertible senior notes,
special charges and credits,
non-operating foreign currency gains and losses related to intercompany balances and reclassifications of cumulative translation adjustments to earnings as a result of business dispositions or country exits,
non-operating gains and losses from minority investments that we have elected to record at fair value with changes in fair value reported in earnings,
income (loss) from discontinued operations, and
the income tax effect of those items.
We believe that excluding the above items from our measures of non-GAAP net income (loss) attributable to common stockholders and non-GAAP earnings (loss) per share provides useful supplemental information for evaluating our operating performance and facilitates comparisons to our historical results by eliminating items that are non-cash in nature, relate to discrete events, or are otherwise not indicative of the core operating performance of our ongoing business.
 
Free cash flow is a non-GAAP financial measure that comprises net cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software from continuing operations. We use free cash flow to conduct and evaluate our business because, although it is similar to cash flow from operations, we believe that it typically represents a more useful measure of cash flows because purchases of fixed assets, software developed for internal-use, and website development costs are necessary components of our ongoing operations. Free cash flow is not intended to represent the total increase or decrease in Groupon's cash balance for the applicable period.
 
Same country operating results are non-GAAP performance measures that reflect the results of the countries in which we maintained continuous business operations throughout the comparative periods presented. We use same country operating results, including same country operating results presented on a foreign exchange rate neutral basis, to better understand the performance of our ongoing business operations and to facilitate comparisons to our historical operating results.
 
Note on 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 Exchange Act of 1934, as amended, that involve a number of risks and uncertainties, and actual results could differ materially from those discussed. The words "may," will," should," "could," "expect," anticipate," "believe," "estimate," intend," "continue" and other similar expressions are intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, but are not limited to, volatility in our revenue and operating results; risks related to our business strategy, including our strategy to grow our local marketplaces, marketing strategy and spend and the productivity of those marketing investments; effectively dealing with challenges arising from our international operations, including fluctuations in currency exchange rates and any potential adverse impact from the United Kingdom’s likely exit from the European Union; retaining existing customers and adding new customers; retaining and adding high quality merchants; cyber security breaches; incurring expenses as we expand our business; competing successfully in our industry; maintaining favorable payment terms with our business partners; providing a strong mobile experience for our customers; delivery and routing of our emails; product liability claims; managing inventory and order fulfillment risks; integrating our technology platforms; litigation; managing refund risks; retaining, attracting and integrating members of our executive team; difficulties, delays or our inability to successfully complete all or part of the announced restructuring actions or to realize the operating efficiencies and other benefits of such restructuring actions; higher than anticipated restructuring charges or changes in the timing of such restructuring charges; completing and realizing the anticipated benefits from acquisitions, dispositions, joint ventures and strategic investments; tax liabilities; tax legislation; compliance with domestic and foreign laws and regulations, including the CARD Act and regulation of the Internet and e-commerce; classification of our independent contractors; maintaining our information technology infrastructure; protecting our intellectual property; maintaining a strong brand; seasonality; customer and merchant fraud; payment-related risks; our ability to raise capital if necessary and our outstanding indebtedness; global economic uncertainty; the impact of our ongoing strategic review and any potential strategic alternatives we may choose to pursue; our senior convertible notes; and our ability to realize the anticipated benefits from the hedge and warrant transactions. For additional information regarding these and other risks and uncertainties, we urge you to refer 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 Annual Report on Form 10-K for the year ended December 31, 2016, and our other filings with the Securities and Exchange Commission, 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 15, 2017. Groupon undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in its expectations.
 
About Groupon
 
Groupon (NASDAQ: GRPN) is building the daily habit in local commerce, offering a vast mobile and online marketplace where people discover and save on amazing things to do, eat, see and buy. By enabling real-time commerce across local businesses, travel destinations, consumer products and live events, shoppers can find the best a city has to offer.
 
Groupon is redefining how small businesses attract and retain customers by providing them with customizable and scalable marketing tools and services to profitably grow their businesses.
 
To download Groupon's top-rated mobile apps, visit www.groupon.com/mobile. To search for great deals or subscribe to Groupon emails, visit www.groupon.com. To learn more about the company’s merchant solutions and how to work with Groupon, visit www.groupon.com/merchant.
 
                                               
Groupon, Inc.
Summary Consolidated and Segment Results
(in thousands, except share and per share amounts)
(unaudited)
                                               
    The financial results of Ticket Monster are presented as discontinued operations in the accompanying condensed consolidated financial statements and tables for the three months and year ended December 31, 2015. All prior period financial information and operational metrics have been retrospectively adjusted to reflect this presentation.
                                               
                                               
        Three Months Ended

December 31,

 

 

 

 

Y/Y % Growth excluding FX(2)

  Year Ended

December 31,

 

 

 

 

Y/Y % Growth excluding

FX (2)

        2016   2015  

Y/Y % Growth

    FX Effect (2)     2016   2015  

Y/Y % Growth

  FX Effect (2)  
    Gross Billings(1):                                          
    North America   $ 1,112,131     $ 1,050,361     5.9 %   $ 25     5.9 %   $ 3,936,421     $ 3,709,797     6.1 %   $ (1,060 )   6.1 %
    EMEA     443,910       487,147     (8.9)       (17,556 )   (5.3 )     1,588,438       1,794,354     (11.5 )     (38,151 )   (9.3 )
    Rest of World     143,416       169,484     (15.4)       (1,083 )   (14.7 )     571,645       751,389     (23.9 )     (36,711 )   (19.0 )
    Consolidated gross billings   $ 1,699,457     $ 1,706,992     (0.4) %   $ (18,614 )   0.6 %   $ 6,096,504     $ 6,255,540     (2.5 )%   $ (75,922 )   (1.3 )%
                                               
    Revenue:                                          
    North America   $ 650,753     $ 622,647     4.5 %   $ 10     4.5 %   $ 2,151,769     $ 2,047,742     5.1 %   $ (250 )   5.1 %
    EMEA     243,348       248,326     (2.0)       (6,742 )   0.7       827,196       867,880     (4.7 )     (14,368 )   (3.0 )
    Rest of World     40,784       46,197     (11.7)       (1,814 )   (7.8 )     164,389       203,894     (19.4 )     (16,389 )   (11.3 )
    Consolidated revenue   $ 934,885     $ 917,170     1.9 %   $ (8,546 )   2.9 %   $ 3,143,354     $ 3,119,516     0.8 %   $ (31,007 )   1.8 %
                -                              
    Income (loss) from operations   $ 7,424     $ (5,423 )   (236.9) %   $ (145 )   (239.6 )%   $ (109,763 )   $ (79,777 )   (37.6 )%   $ (1,150 )   (36.1 )%
                                               
    Income (loss) from continuing operations     (50,204 )     (32,552 )                   (183,323 )     (89,171 )            
                                               
    Income (loss) from discontinued operations, net of tax (3)           (10,613 )                         122,850              
                                               
    Net income (loss) attributable to Groupon, Inc.   $ (52,588 )   $ (46,528 )                 $ (194,587 )   $ 20,668              
                                               
    Basic and diluted net income (loss) per share (4):.                                          
    Continuing operations   $ (0.09 )   $ (0.06 )                 $ (0.34 )   $ (0.16 )            
    Discontinued operations           (0.02 )                         0.19              
    Basic and diluted net income (loss) per share   $ (0.09 )   $ (0.08 )                 $ (0.34 )   $ 0.03              
                                               
    Weighted average number of shares outstanding (4)                                          
    Basic     570,546,159       607,517,010                     576,354,258       650,106,225              
    Diluted     570,546,159       607,517,010                     576,354,258       650,106,225              
                                               
(1)   Represents the total dollar value of customer purchases of goods and services.
(2)   Represents the change in financial measures that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three months and year ended December 31, 2015.
(3)   The $10.6 million loss presented within income (loss) from discontinued operations, net of tax, for the three months ended December 31, 2015 represents additional income tax expense attributed to discontinued operations, which resulted from the valuation allowance that was recognized during the period against the Company's net deferred tax assets in the United States.
(4)   The structure of the Company's common stock changed during the year ended December 31, 2016. For additional information, refer to Note 11, Stockholders' Equity, and Note 17, Income (Loss) per Share, in the Company's Annual Report on Form 10-K for the year ended December 31, 2016.
                     
    Groupon, Inc.
    Condensed Consolidated Statements of Cash Flows
    (in thousands)
    (unaudited)
                     
        Three Months Ended December 31,   Year Ended December 31,
        2016  

2015 (1)

  2016  

2015 (1)

    Operating activities                
    Net income (loss)   $ (50,204 )   $ (43,165 )   $ (183,323 )   $ 33,679  
    Less: Income (loss) from discontinued operations, net of tax           (10,613 )           122,850  
    Income (loss) from continuing operations     (50,204 )     (32,552 )     (183,323 )     (89,171 )
    Adjustments to reconcile net income (loss) to net cash provided by operating activities:                
    Depreciation and amortization of property, equipment and software     30,023       28,807       118,720       113,048  
    Amortization of acquired intangible assets     5,305       4,956       18,948       19,922  
    Stock-based compensation     23,402       32,865       118,152       142,069  
    Restructuring-related long-lived asset impairments     376       6,922       421       7,267  
    Gains on business dispositions     (312 )           (11,711 )     (13,710 )
    Deferred income taxes     (4,185 )     6,267       (10,621 )     (8,985 )
    (Gain) loss from changes in fair value of contingent consideration     (38 )     508       4,092       240  
    (Gain) loss from changes in fair value of investments     40,840       829       48,141       2,943  
    Amortization of debt discount on convertible senior notes     2,522             7,376        
    Change in assets and liabilities, net of acquisitions:                
    Restricted cash     (995 )     75       (1,327 )     4,630  
    Accounts receivable     (10,970 )     6,960       (14,563 )     13,313  
    Prepaid expenses and other current assets     30,070       61,358       40,808       21,545  
    Accounts payable     7,540       9,545       3,214       8,601  
    Accrued merchant and supplier payables     190,261       142,069       18,445       40,217  
    Accrued expenses and other current liabilities     13,407       (1,174 )     (34,512 )     56,040  
    Other, net     11,620       (16,980 )     (5,155 )     (18,222 )
    Net cash provided by (used in) operating activities from continuing operations     288,662       250,455       117,105       299,747  
    Net cash provided by (used in) operating activities from discontinued operations           (670 )           (37,248 )
    Net cash provided by (used in) operating activities     288,662       249,785       117,105       262,499  
                     
    Net cash provided by (used in) investing activities from continuing operations     (5,767 )     (31,238 )     (57,486 )     (177,250 )
    Net cash provided by (used in) investing activities from discontinued operations                       244,470  
    Net cash provided by (used in) investing activities     (5,767 )     (31,238 )     (57,486 )     67,220  
                     
    Net cash provided by (used in) financing activities     (67,533 )     (323,597 )     (14,665 )     (515,785 )
                     
    Effect of exchange rate changes on cash and cash equivalents, including cash classified within current assets held for sale     (13,263 )     (5,147 )     (6,470 )     (32,485 )
    Net increase (decrease) in cash and cash equivalents, including cash classified within current assets held for sale     202,099       (110,197 )     38,484       (218,551 )
    Less: Net increase (decrease) in cash classified within current assets held for sale                       (55,279 )
    Net increase (decrease) in cash and cash equivalents     202,099       (110,197 )     38,484       (163,272 )
    Cash and cash equivalents, beginning of period     689,747       963,559       853,362       1,016,634  
    Cash and cash equivalents, end of period   $ 891,846     $ 853,362     $ 891,846     $ 853,362  
                     

(1)

  The Company adopted the guidance in Accounting Standards Update ("ASU") 2016-09, Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting, on January 1, 2016. ASU 2016-09 requires that all income tax-related cash flows resulting from share-based payments be reported as operating activities in the statement of cash flows. Previously, income tax benefits at settlement of an award were reported as a reduction to operating cash flows and an increase to financing cash flows to the extent that those benefits exceeded the income tax benefits reported in earnings during the award's vesting period. The Company has elected to apply that change in cash flow classification on a retrospective basis, which has resulted in an increase to net cash provided by (used in) operating activities and net cash used in financing activities of $1.4 million for the three months ended December 31, 2015, and increases to net cash provided by (used in) operating activities and net cash used in financing activities of $7.6 million for the year ended December 31, 2015.
Groupon, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)
                     
        Three Months Ended December 31,   Year Ended December 31,
        2016   2015   2016   2015
    Revenue:                
    Third party and other   $ 341,013     $ 345,260     $ 1,303,546     $ 1,372,533  
    Direct     593,872       571,910       1,839,808       1,746,983  
    Total revenue     934,885       917,170       3,143,354       3,119,516  
    Cost of revenue:                
    Third party and other     40,728       43,640       171,728       188,932  
    Direct     524,287       501,790       1,614,723       1,545,519  
    Total cost of revenue     565,015       545,430       1,786,451       1,734,451  
    Gross profit     369,870       371,740       1,356,903       1,385,065  
    Operating expenses:                
    Marketing     93,335       83,208       362,951       254,335  
    Selling, general and administrative     254,458       287,976       1,066,168       1,192,792  
    Restructuring charges     13,620       5,422       43,608       29,568  
    Gains on business dispositions     (312 )           (11,711 )     (13,710 )
    Acquisition-related expense (benefit), net     1,345       557       5,650       1,857  
   

Total operating expenses

    362,446       377,163       1,466,666       1,464,842  
    Income (loss) from operations     7,424       (5,423 )     (109,763 )     (79,777 )
   

Other income (expense), net

    (61,804 )     (3,393 )     (76,107 )     (28,539 )
    Income (loss) from continuing operations before provision (benefit) for income taxes   (54,380 )     (8,816 )     (185,870 )     (108,316 )
    Provision (benefit) for income taxes     (4,176 )     23,736       (2,547 )     (19,145 )
    Income (loss) from continuing operations     (50,204 )     (32,552 )     (183,323 )     (89,171 )
    Income (loss) from discontinued operations, net of tax           (10,613 )           122,850  
    Net income (loss)     (50,204 )     (43,165 )     (183,323 )     33,679  
    Net income (loss) attributable to noncontrolling interests     (2,384 )     (3,363 )     (11,264 )     (13,011 )
    Net income (loss) attributable to Groupon, Inc.   $ (52,588 )   $ (46,528 )   $ (194,587 )   $ 20,668  
                     
    Basic and diluted net income (loss) per share (1):                
    Continuing operations   $ (0.09 )   $ (0.06 )   $ (0.34 )   $ (0.16 )
    Discontinued operations           (0.02 )           0.19  
    Basic and diluted net income (loss) per share   $ (0.09 )   $ (0.08 )   $ (0.34 )   $ 0.03  
                     
    Weighted average number of shares outstanding (1)                
    Basic     570,546,159       607,517,010       576,354,258       650,106,225  
    Diluted     570,546,159       607,517,010       576,354,258       650,106,225  
                     
(1)   The structure of the Company's common stock changed during the year ended December 31, 2016. For additional information, refer to Note 11, Stockholders' Equity, and Note 17, Income (Loss) per Share, in theCompany's Annual Report on Form 10-K for the year ended December 31, 2016.
         
Groupon, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
         
    December 31,   December 31,
    2016   2015
    (unaudited)    
Assets        
Current assets:        
Cash and cash equivalents   $ 891,846   $ 853,362
Accounts receivable, net   86,655   68,175
Prepaid expenses and other current assets   113,435   153,705
Total current assets   1,091,936   1,075,242
Property, equipment and software, net   171,006   198,897
Goodwill   283,962   287,332
Intangible assets, net   42,915   36,483
Investments (including $110,066 and $163,675 at December 31, 2016 and December 31, 2015, respectively, at fair value)   141,882   178,236
Deferred income taxes   5,231   3,454
Other non-current assets   24,445   16,620
Total Assets   $ 1,761,377   $ 1,796,264
Liabilities and Equity        
Current liabilities:        
Accounts payable   $ 29,273   $ 24,590
Accrued merchant and supplier payables   800,697   776,211
Accrued expenses and other current liabilities   383,081   402,724
Total current liabilities   1,213,051   1,203,525
Convertible senior notes, net   178,995  
Deferred income taxes   4,215   8,612
Other non-current liabilities   100,054   113,540
Total Liabilities   1,496,315   1,325,677
Commitments and contingencies        
Stockholders' Equity        
Class A common stock, par value $0.0001 per share, no shares authorized, issued or outstanding at December 31, 2016 and 2,000,000,000 shares authorized, 717,387,446 shares issued and 588,919,281 shares outstanding at December 31, 2015     72
Class B common stock, par value $0.0001 per share, no shares authorized, issued or outstanding at December 31, 2016 and 10,000,000 shares authorized, 2,399,976 shares issued and outstanding at December 31, 2015    
Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized, 736,531,771 shares issued and 564,835,863 shares outstanding at December 31, 2016 and no shares issued or outstanding at December 31, 2015   74  
Additional paid-in capital   2,112,728   1,964,453
Treasury stock, at cost, 171,695,908 shares at December 31, 2016 and 128,468,165 shares at December 31, 2015   (807,424)   (645,041)
Accumulated deficit   (1,099,010)   (901,292)
Accumulated other comprehensive income (loss)   58,052   51,206
Total Groupon, Inc. Stockholders' Equity   264,420   469,398
Noncontrolling interests   642   1,189
Total Equity   265,062   470,587
Total Liabilities and Equity   $ 1,761,377   $ 1,796,264
                       
Groupon, Inc.
Segment Information
(in thousands)
(unaudited)
                       
        Three Months Ended December 31,     Year Ended December 31,
        2016   2015     2016   2015
    North America                  
    Gross billings (1)   $ 1,112,131     $ 1,050,361       $ 3,936,421     $ 3,709,797  
    Revenue   $ 650,753     $ 622,647       $ 2,151,769     $ 2,047,742  
    Segment cost of revenue and operating expenses (2)(3)(4)     616,103       625,171         2,126,834       2,029,643  
    Segment operating income (loss) (2)(3)(4)   $ 34,650     $ (2,524 )     $ 24,935     $ 18,099  
    Segment operating income (loss) as a percent of segment gross billings     3.1 %     (0.2 )%       0.6 %     0.5 %
    Segment operating income (loss) as a percent of segment revenue     5.3 %     (0.4 )%       1.2 %     0.9 %
                       
    EMEA                  
    Gross billings (1)   $ 443,910     $ 487,147       $ 1,588,438     $ 1,794,354  
    Revenue   $ 243,348     $ 248,326       $ 827,196     $ 867,880  
    Segment cost of revenue and operating expenses (2)(4)(5)     242,883       211,443         813,177       797,786  
    Segment operating income (loss) (2)(4)(5)   $ 465     $ 36,883       $ 14,019     $ 70,094  
    Segment operating income (loss) as a percent of segment gross billings     0.1 %     7.6 %       0.9 %     3.9 %
    Segment operating income (loss) as a percent of segment revenue     0.2 %     14.9 %       1.7 %     8.1 %
                       
    Rest of World                  
    Gross billings (1)   $ 143,416     $ 169,484       $ 571,645     $ 751,389  
    Revenue   $ 40,784     $ 46,197       $ 164,389     $ 203,894  
    Segment cost of revenue and operating expenses (2)(4)     43,888       52,731         190,135       228,273  
    Segment operating income (loss) (2)(4)   $ (3,104 )   $ (6,534 )     $ (25,746 )   $ (24,379 )
    Segment operating income (loss) as a percent of segment gross billings     (2.2 )%     (3.9 )%       (4.5 )%     (3.2 )%
    Segment operating income (loss) as a percent of segment revenue     (7.6 )%     (14.1 )%       (15.7 )%     (12.0 )%
                       
(1)   Represents the total dollar value of customer purchases of goods and services.
(2)   Segment cost of revenue and operating expenses and segment operating income (loss) exclude stock-based compensation and acquisition-related expense (benefit), net.
(3)   Segment cost of revenue and operating expenses for North America for the year ended December 31, 2015 includes a $37.5 million expense related to an increase in the Company's contingent liability for its securities litigation matter.
(4)   Segment cost of revenue and operating expenses for the three months ended December 31, 2016 includes restructuring charges of $2.7 million in North America, $9.2 million in EMEA and $1.7 million in Rest of World. Segment cost of revenue and operating expenses for the year ended December 31, 2016 includes restructuring charges of $9.5 million in North America (which excludes $2.6 million of stock-based compensation), $23.1 million in EMEA (which excludes $2.0 million of stock-based compensation) and $6.3 million in Rest of World (which excludes $0.1 million of stock-based compensation). Segment cost of revenue and operating expenses for the three months ended December 31, 2015 includes restructuring charges (credits) of $9.1 million in North America, $(3.6) million in EMEA and $(0.1) million in Rest of World. Segment cost of revenue and operating expenses for the year ended December 31, 2015 includes restructuring charges of $10.5 million in North America, $16.1 million in EMEA and $3.0 million in Rest of World.
(5)   Segment cost of revenue and operating expenses for EMEA for the year ended December 31, 2015 includes a $6.7 million expense for the write-off of a prepaid asset related to a marketing program that was discontinued because the counterparty ceased operations.
                                       
Groupon, Inc.
Non-GAAP Reconciliation Schedules
(in thousands, except share and per share amounts)
(unaudited)
                                       
    Adjusted EBITDA, non-GAAP earnings attributable to common stockholders and non-GAAP earnings per share are non-GAAP performance measures. The Company reconciles Adjusted EBITDA to the most comparable U.S. GAAP performance measure, "Net income (loss) from continuing operations" for the periods presented and the Company reconciles non-GAAP earnings per share to the most comparable U.S. GAAP performance measure, "Diluted net income (loss) per share," for the periods presented.
                                       
    The following is a quarterly reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP performance measure, "Income (loss) from continuing operations."            
                                       
        Q4 2014   Q1 2015   Q2 2015   Q3 2015   Q4 2015 Q1 2016   Q2 2016   Q3 2016   Q4 2016
    Income (loss) from continuing operations   $ 26,566     $ (16,739 )   $ (15,267 )   $ (24,613 )   $ (32,552 ) $ (45,596 )   $ (51,731 )   $ (35,792 )   $ (50,204 )
    Adjustments:                                  
    Stock-based compensation (1)     29,961       35,144       38,467       35,432       32,691     27,976       35,244       26,176       23,242  
    Depreciation and amortization     30,122       32,200       31,372       35,635       33,763     34,797       34,290       33,253       35,328  
    Acquisition-related expense (benefit), net     (809 )     (269 )     505       1,064       557     3,464       850       (9 )     1,345  
    Restructuring charges                       24,146       5,422     12,444       16,085       1,459       13,620  
    Gains on business dispositions                       (13,710 )               (9,339 )     (2,060 )     (312 )
    Prepaid marketing write-off                       6,690                              
    Securities litigation expense                       37,500                              
    Non-operating expense (income), net     11,531       19,927       (2,941 )     8,160       3,393     (3,486 )     10,761       7,028       61,804  
    Provision (benefit) for income taxes     (4,457 )     2,107       8,982       (53,970 )     23,736     1,749       (2,199 )     2,079       (4,176 )
    Total adjustments     66,348       89,109       76,385       80,947       99,562     76,944       85,692       67,926       130,851  
    Adjusted EBITDA   $ 92,914     $ 72,370     $ 61,118     $ 56,334     $ 67,010   $ 31,348     $ 33,961     $ 32,134     $ 80,647  
                                       
(1)   Represents stock-based compensation recorded within cost of revenue, marketing expense, and selling, general and administrative expense. Non-operating expense (income), net, includes $0.02 million, $0.1 million, $0.2 million, $0.2 million, $0.2 million, $0.3 million and $0.1 million of additional stock-based compensation for the three months ended June 30, 2015, September 30, 2015, December 31, 2015, March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016, respectively. Restructuring charges includes $2.6 million and $2.1 million of additional stock-based compensation for the three months ended March 31, 2016 and June 30, 2016, respectively.
                                       
    The following is a reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, "Income (loss) from continuing operations" for the years ended December 31, 2016 and 2015:    
                                       
        Year Ended December 31,                          
        2016   2015                          
    Income (loss) from continuing operations   $ (183,323 )   $ (89,171 )                          
    Adjustments:                                  
    Stock-based compensation (1)     112,638       141,734                            
    Depreciation and amortization     137,668       132,970                            
    Acquisition-related expense (benefit), net     5,650       1,857                            
    Restructuring charges     43,608       29,568                            
    Gains on business dispositions     (11,711 )     (13,710 )                          
    Prepaid marketing write-off           6,690                            
    Securities litigation expense           37,500                            
    Non-operating expense (income), net     76,107       28,539                            
    Provision (benefit) for income taxes     (2,547 )     (19,145 )                          
    Total adjustments     361,413       346,003                            
    Adjusted EBITDA   $ 178,090     $ 256,832                            
                                       
(1)  

Includes stock-based compensation recorded within cost of revenue, marketing expense, and selling, general and administrative expense. Restructuring charges and non-operating expense (income), net, includes $4.7 million and $0.8 million of additional stock-based compensation for the year ended December 31, 2016. Non-operating expense (income), net, includes $0.3 million of additional stock-based compensation for the year ended December 31, 2015.

                                       
    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 to non-GAAP net income (loss) per share for the three months and year ended December 31, 2016:
                                       
        Three Months Ended

December 31, 2016

  Year Ended

December 31, 2016

                       
    Net income (loss) attributable to common stockholders   $ (52,588 )   $ (194,587 )                          
    Stock-based compensation(1)     23,402       113,469                            
    Amortization of acquired intangible assets     5,305       18,948                            
    Acquisition-related expense (benefit), net     1,345       5,650                            
    Restructuring charges     13,620       43,608                            
    Gains on business dispositions     (312 )     (11,711 )                          
    Intercompany foreign currency losses (gains) and reclassifications of translation adjustments to earnings (2)     16,292       7,915                            
    Losses (gains), net from changes in fair value of investments     40,840       48,141                            
    Non-cash interest expense on convertible senior notes     2,522       7,376                            
    Income tax effect of above adjustments     (7,952 )     (15,801 )                          
    Non-GAAP net income (loss) attributable to common stockholders   $ 42,474     $ 23,008                            
                                       
    Weighted-average shares of common stock - basic     570,546,159       576,354,258                            
    Effect of dilutive securities     54,543,720       36,458,342                            
    Weighted-average shares of common stock - diluted     625,089,879       612,812,600                            
                                       
    Diluted net income (loss) per share   $ (0.09 )   $ (0.34 )                          
    Impact of stock-based compensation, amortization of acquired intangible assets, acquisition-related expense (benefit), net, intercompany foreign currency losses (gains), special charges and credits, income (loss) from discontinued operations and related tax effects     0.16       0.38                            
    Non-GAAP net income (loss) per share   $ 0.07     $ 0.04                            
                                       
(1)   Excludes $4.7 million of stock-based compensation classified within restructuring charges for the year ended December 31, 2016, respectively.
(2)   Foreign currency gains (losses), net for the three months and year ended December 31, 2016 includes $6.0 million and $5.7 million, respectively, of net cumulative translation losses that were reclassified to earnings as a result of the Company's exit from certain countries as part of its restructuring plan.
                                       
    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." In October 2016, the Company completed a strategic review of our remaining international markets and decided to focus its business on 15 core countries and to pursue strategic alternatives for the remaining 11 countries. Based on the Company’s review of quantitative and qualitative factors, it believes that the disposition of those 11 countries represents a strategic shift that will likely have a major effect on its operations and financial results. As such, the Company anticipates that when either the businesses have been disposed of in those 11 countries or have met the criteria for held-for-sale classification, their financial results, including any gains or losses on disposition, will be presented as discontinued operations in the Company’s consolidated statements of operations. As such, this forward-looking guidance for the year ending December 31, 2017 has been provided on a continuing operations basis.
                                       
        Year Ending December 31, 2017                          
    Expected income (loss) from continuing operations range   $(42,500) to $(17,500)                          
    Expected adjustments:                                  
    Stock-based compensation   90,000 to 100,000                          
    Depreciation and amortization   125,000                          
    Non-operating expense (income), net   20,000                          
    Provision (benefit) for income taxes   7,500 to 12,500                          
    Total expected adjustments   $242,500 to $257,500                          
    Expected Adjusted EBITDA range   $200,000 to $240,000                          
                                       
    The outlook provided above does not reflect the potential impact of any additional restructuring actions that the Company may decide to pursue, business acquisitions or dispositions, changes in the fair values of investments or contingent consideration, foreign currency gains or losses or unusual or infrequently occurring items that may occur during 2017.
                                       
Groupon, Inc.
Non-GAAP Reconciliation Schedules
(in thousands, except share and per share amounts)
(unaudited)
                                       
    Foreign exchange rate neutral operating results are non-GAAP financial measures. The Company reconciles foreign exchange rate neutral operating results to the most comparable U.S. GAAP financial measures, "Gross billings," "Revenue" and "Income (loss) from continuing operations," respectively, for the periods presented. The Company reconciles "foreign exchange rate neutral Gross billings growth" and "foreign exchange rate neutral Revenue growth" to year-over-year growth rates for the most comparable U.S. GAAP financial measures, "Gross billings growth" and "Revenue growth," respectively, for the periods presented.
                                       
    The effect on the Company's gross billings, revenue and income (loss) from changes in exchange rates versus the U.S. Dollar for the three months ended December 31, 2016 was as follows:
                                       
        Three Months Ended December 31, 2016   Three Months Ended December 31, 2016            
        At Avg. Q4 2015

Rates (1)

  Exchange Rate

Effect (2)

  As

Reported

  At Avg. Q3 2016

Rates (3)

  Exchange Rate

Effect (2)

As

Reported

           
    Gross billings   $ 1,718,071     $ (18,614 )   $ 1,699,457     $ 1,719,411     $ (19,954 ) $ 1,699,457              
    Revenue     943,431       (8,546 )     934,885       944,772       (9,887 )   934,885              
    Income (loss) from operations   $ 7,569     $ (145 )   $ 7,424     $ 6,974     $ 450   $ 7,424              
                                       
    The effect on the Company's gross billings, revenue and income (loss) from operations from changes in exchange rates versus the U.S. Dollar for the year ended December 31, 2016 was as follows:
                                       
        Year Ended December 31, 2016   Year Ended December 31, 2016            
        At Avg. Q4 2015 YTD

Rates (1)

  Exchange Rate

Effect (2)

  As

Reported

  At Avg. Q4'15-Q3'16

Rates (3)

  Exchange Rate

Effect (2)

As

Reported

           
    Gross billings   $ 6,172,426     $ (75,922 )   $ 6,096,504     $ 6,114,028     $ (17,524 ) $ 6,096,504              
    Revenue     3,174,361       (31,007 )     3,143,354       3,152,794       (9,440 )   3,143,354              
    Income (loss) from operations   $ (108,613 )   $ (1,150 )   $ (109,763 )   $ (108,319 )   $ (1,444 ) $ (109,763 )            
                                       
(1)   Represents the financial statement balances that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three months and year ended December 31, 2015.
(2)   Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable prior periods.
(3)   Represents the financial statement balances that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three and twelve months ended September 30, 2016.
                                       
    The following is a quarterly reconciliation of foreign exchange rate neutral Gross billings growth from the comparable quarterly periods of the prior year to reported Gross billings growth from the comparable quarterly periods of the prior year.
                                       
        Q4 2015   Q1 2016   Q2 2016   Q3 2016   Q4 2016              
    EMEA Gross billings growth     (13 )%     (15 )%     (12 )%     (10 )%     (9 )%              
    FX Effect     11       3             2       4                
    EMEA Gross billings growth, excluding FX     (2 )%     (12 )%     (12 )%     (8 )%     (5 )%              
                                       
    Rest of World Gross billings growth     (21 )%     (28 )%     (27 )%     (24 )%     (15 )%              
    FX Effect     14       11       6       1                      
    Rest of World Gross billings growth, excluding FX     (7 )%     (17 )%     (21 )%     (23 )%     (15 )%              
                                       
    Consolidated Gross billings growth     (1 )%     (5 )%     (2 )%     (2 )%     %              
    FX Effect     5       2                   1                
    Consolidated Gross billings growth, excluding FX     4 %     (3 )%     (2 )%     (2 )%     1 %              
                                       
    The following is a quarterly reconciliation of foreign exchange rate neutral Revenue growth from the comparable quarterly periods of the prior year to reported Revenue growth from the comparable quarterly periods of the prior year.
                                       
        Q4 2015   Q1 2016   Q2 2016   Q3 2016   Q4 2016              
    EMEA Revenue growth     (9 )%     (13 )%     (3 )%     (1 )%     (2 )%              
    FX Effect     12       3             1       3                
    EMEA Revenue growth, excluding FX     3 %     (10 )%     (3 )%     %     1 %              
                                       
    Rest of World Revenue growth     (23 )%     (22 )%     (23 )%     (19 )%     (12 )%              
    FX Effect     15       14       9       4       4                
    Rest of World Revenue growth, excluding FX     (8 )%     (8 )%     (14 )%     (15 )%     (8 )%              
                                       
    Consolidated Revenue growth     4 %     (2 )%     2 %     1 %     2 %              
    FX Effect     5       1       1       1       1                
    Consolidated Revenue growth, excluding FX     9 %     (1 )%     3 %     2 %     3 %              
 
The effect on North America's gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended December 31, 2016 was as follows:
                         
    At Avg. Q4

2015 Rates (1)

  Exchange

Rate

Effect (2)

  December 31, 2016

As Reported

  December 31, 2015

As Reported

  Y/Y %

Growth

  Y/Y% Growth excluding FX
Local:                        
Third party and other   $ 590,657     $ 27     $ 590,684     $ 531,154       11.2 %   11.2 %
                         
Travel:                        
Third party     90,057       2       90,059       89,389       0.7 %   0.7 %
Total services     680,714       29       680,743       620,543       9.7 %   9.7 %
                         
Goods:                        
Third party     12,211       (4 )     12,207       12,951       (5.7 ) %   (5.7 ) %
Direct     419,181             419,181       416,867       0.6 %   0.6 %

Total

    431,392       (4 )     431,388       429,818       0.4 %   0.4 %
                         
Total gross billings   $ 1,112,106     $ 25     $ 1,112,131     $ 1,050,361       5.9 %   5.9 %
                         
The effect on EMEA's gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended December 31, 2016 was as follows:
                         
    At Avg. Q4

2015 Rates (1)

  Exchange

Rate

Effect (2)

  December 31, 2016

As Reported

  December 31, 2015

As Reported

  Y/Y %

Growth

  Y/Y% Growth excluding FX
Local:                        
Third party and other   $ 192,321     $ (11,909 )   $ 180,412     $ 197,445       (8.6 ) %   (2.6 ) %
                         
Travel:                        
Third party     56,419       (805 )     55,614       59,836       (7.1 ) %   (5.7 ) %
Total services     248,740       (12,714 )     236,026       257,281       (8.3 ) %   (3.3 ) %
                         
Goods:                        
Third party     43,041       (2,467 )     40,574       83,295       (51.3 ) %   (48.3 ) %
Direct     169,685       (2,375 )     167,310       146,571       14.1 %   15.8 %
Total     212,726       (4,842 )     207,884       229,866       (9.6 ) %   (7.5 ) %
                         
Total gross billings   $ 461,466     $ (17,556 )   $ 443,910     $ 487,147       (8.9 ) %   (5.3 ) %
                         
The effect on Rest of World's gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended December 31, 2016 was as follows:
                         
    At Avg. Q4

2015 Rates (1)

  Exchange

Rate

Effect (2)

  December 31, 2016

As Reported

  December 31, 2015

As Reported

  Y/Y %

Growth

  Y/Y% Growth excluding FX
Local:                        
Third party and other   $ 86,184     $ 1,165     $ 87,349     $ 83,430       4.7 %   3.3 %
                         
Travel:                        
Third party     21,397       (663 )     20,734       25,369       (18.3 ) %   (15.7 ) %
Total services     107,581       502       108,083       108,799       (0.7 ) %   (1.1 ) %
                         
Goods:                        
Third party     28,255       (306 )     27,949       52,213       (46.5 ) %   (45.9 ) %
Direct     8,663       (1,279 )     7,384       8,472       (12.8 ) %   2.3 %
Total     36,918       (1,585 )     35,333       60,685       (41.8 ) %   (39.2 ) %
                         
Total gross billings   $ 144,499     $ (1,083 )   $ 143,416     $ 169,484       (15.4 ) %   (14.7 ) %
                         
The effect on consolidated gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended December 31, 2016 was as follows:
                         
    At Avg. Q4

2015 Rates (1)

  Exchange

Rate

Effect (2)

  December 31, 2016

As Reported

  December 31, 2015

As Reported

  Y/Y %

Growth

  Y/Y% Growth excluding FX
Local:                        
Third party and other   $ 869,162     $ (10,717 )   $ 858,445     $ 812,029       5.7 %   7.0 %
                         
Travel:                        
Third party     167,873       (1,466 )     166,407       174,594       (4.7 ) %   (3.8 ) %
Total services     1,037,035       (12,183 )     1,024,852       986,623       3.9 %   5.1 %
                         
Goods:                        
Third party     83,507       (2,777 )     80,730       148,459       (45.6 ) %   (43.8 ) %
Direct     597,529       (3,654 )     593,875       571,910       3.8 %   4.5 %
Total     681,036       (6,431 )     674,605       720,369       (6.4 ) %   (5.5 ) %
                         
Total gross billings   $ 1,718,071     $ (18,614 )   $ 1,699,457     $ 1,706,992       (0.4 ) %   0.6 %
                         
(1)   Represents the financial statement balances that would have resulted had average exchange rates in the reporting period been the same as those in effect during the three months ended December 31, 2015.
(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.
                         
                         
The following is a reconciliation of foreign exchange rate neutral same-country gross billings growth for the three months and year ended December 31, 2016 from the comparable prior year period:
                         
    Three Months Ended December 31, 2016   Three Months Ended December 31, 2015   Y/Y %

Growth

  Year Ended December 31, 2016   Year Ended December 31, 2015   Y/Y %

Growth

Gross billings as reported   $ 1,699,457     $ 1,706,992       (0.4 )%   $ 6,096,504     $ 6,255,540     (2.5 )%
Less: Gross billings from countries where Groupon no longer operates     (5,038 )     (34,490 )         (53,046 )     (233,865 )    
Exchange rate effect (1)     18,578                 69,271            
FX neutral same-country gross billings   $ 1,712,997     $ 1,672,502       2.4 %   $ 6,112,729     $ 6,021,675     1.5 %
                         
(1)   Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable prior year period.
                         
The following is a reconciliation of foreign exchange rate neutral same-country gross billings growth for our EMEA segment for the three months ended December 31, 2016 from the comparable prior year period:
                         
    Three Months Ended December 31, 2016   Three Months Ended December 31, 2015   Y/Y %

Growth

         
EMEA gross billings as reported   $ 443,910     $ 487,147       (8.9 )%            
Less: EMEA Gross billings from countries where Groupon no longer operates     (1,599 )     (23,306 )                
Exchange rate effect (1)     17,499                        
FX-neutral same-country gross billings   $ 459,810     $ 463,841       (0.9 )%            
                         
(1)   Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable prior year period.
                         
                         
The following is a reconciliation of foreign exchange rate neutral same-country revenue growth for the three months and year ended December 31, 2016 from the comparable prior year period:
                         
    Three Months Ended December 31, 2016   Three Months Ended December 31, 2015   Y/Y %

Growth

  Year Ended December 31, 2016   Year Ended December 31, 2015   Y/Y %

Growth

Revenue as reported   $ 934,885     $ 917,170       1.9 %   $ 3,143,354     $ 3,119,516     0.8 %
Less: Revenue from countries where Groupon no longer operates     (2,656 )     (13,297 )         (22,855 )     (85,377 )    
Exchange rate effect (1)     8,555                 28,055            
FX-neutral same-country revenue   $ 940,784     $ 903,873       4.1 %   $ 3,148,554     $ 3,034,139     3.8 %
                         
(1)   Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable prior year period.
                         
The following is a reconciliation of foreign exchange rate neutral same-country gross profit growth for the three months and year ended December 31, 2016 from the comparable prior year period:
                         
    Three Months Ended December 31, 2016   Three Months Ended December 31, 2015   Y/Y %

Growth

  Year Ended December 31, 2016   Year Ended December 31, 2015   Y/Y %

Growth

Gross profit as reported   $ 369,870     $ 371,740       (0.5 )%   $ 1,356,903     $ 1,385,065     (2.0 )%
Less: Gross profit from countries where Groupon no longer operates     (1,511 )     (7,326 )         (12,128 )     (48,212 )    
Exchange rate effect (1)     4,801                 17,208            
FX-neutral same-country gross profit   $ 373,160     $ 364,414       2.4 %   $ 1,361,983     $ 1,336,853     1.9 %
                         
(1)   Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable prior year period.
                         
    Groupon, Inc.
    Supplemental Financial Information and Business Metrics (10)
    (financial data in thousands; active customers in millions)
    (unaudited)
                         
        Q4 2015   Q1 2016   Q2 2016   Q3 2016   Q4 2016
    Segments                    
    North America Segment:                    
    Gross Billings (1):                    
    Local (2) Gross Billings   $ 531,154     $ 539,623     $ 542,439     $ 530,768     $ 590,684  
    Travel Gross Billings     89,389       103,390       105,388       93,564       90,059  
    Gross Billings - Services     620,543       643,013       647,827       624,332       680,743  
    Gross Billings - Goods     429,818       294,061       318,427       296,630       431,388  
    Total Gross Billings   $ 1,050,361     $ 937,074     $ 966,254     $ 920,962     $ 1,112,131  
    Year-over-year growth     11 %     5 %     8 %     6 %     6 %
    % Third Party and Other     60 %     70 %     68 %     69 %     62 %
    % Direct     40 %     30 %     32 %     31 %     38 %
    Gross BillingsTrailing Twelve Months (TTM)   $ 3,709,797     $ 3,752,894     $ 3,822,892     $ 3,874,651     $ 3,936,421  
                         
    Revenue (3):                    
    Local Revenue   $ 184,201     $ 192,153     $ 184,139     $ 176,220     $ 209,799  
    Travel Revenue     18,390       20,914       21,401       21,241       19,023  
    Revenue - Services     202,591       213,067       205,540       197,461       228,822  
    Revenue - Goods     420,056       287,746       311,382       285,820       421,931  
    Total Revenue   $ 622,647     $ 500,813     $ 516,922     $ 483,281     $ 650,753  
    Year-over-year growth     13 %     4 %     7 %     4 %     5 %
    % Third Party and Other     33 %     43 %     40 %     41 %     36 %
    % Direct     67 %     57 %     60 %     59 %     64 %
    Revenue TTM   $ 2,047,742     $ 2,068,673     $ 2,104,313     $ 2,123,663     $ 2,151,769  
                         
    Gross Profit (4):                    
    Local Gross Profit   $ 159,745     $ 164,018     $ 158,812     $ 152,873     $ 185,280  
    % of North America Local Gross Billings     30.1 %     30.4 %     29.3 %     28.8 %     31.4 %
    Travel Gross Profit     15,207       15,712       16,334       17,257       15,052  
    % of North America Travel Gross Billings     17.0 %     15.2 %     15.5 %     18.4 %     16.7 %
    Gross Profit - Services     174,952       179,730       175,146       170,130       200,332  
    % of North America Services Gross Billings     28.2 %     28.0 %     27.0 %     27.2 %     29.4 %
    Gross Profit - Goods     44,329       36,213       42,028       31,531       50,437  
    % of North America Goods Gross Billings     10.3 %     12.3 %     13.2 %     10.6 %     11.7 %
    Total Gross Profit   $ 219,281     $ 215,943     $ 217,174     $ 201,661     $ 250,769  
    Year-over-year growth     12 %     11 %     10 %     5 %     14 %
    % Third Party and Other     81 %     84 %     82 %     85 %     81 %
    % Direct     19 %     16 %     18 %     15 %     19 %
    % of North America Total Gross Billings     20.9 %     23.0 %     22.5 %     21.9 %     22.5 %
                         
    EMEA Segment:                    
    Gross Billings:                    
    Local Gross Billings   $ 197,445     $ 174,033     $ 165,290     $ 158,792     $ 180,412  
    Travel Gross Billings     59,836       57,201       52,880       57,594       55,614  
    Gross Billings - Services     257,281       231,234       218,170       216,386       236,026  
    Gross Billings - Goods     229,866       160,993       163,139       154,606       207,884  
    Total Gross Billings   $ 487,147     $ 392,227     $ 381,309     $ 370,992     $ 443,910  
    Year-over-year growth     (13 )%     (15 )%     (12 )%     (10 )%     (9 )%
    Year-over-year growth, excluding FX (5)     (2 )%     (12 )%     (12 )%     (8 )%     (5 )%
    % Third Party and Other     70 %     73 %     68 %     68 %     62 %
    % Direct     30 %     27 %     32 %     32 %     38 %
    Gross BillingsTTM   $ 1,794,354     $ 1,727,392     $ 1,675,165     $ 1,631,675     $ 1,588,438  
                         
    Revenue:                    
    Local Revenue   $ 73,225     $ 61,886     $ 60,616     $ 58,581     $ 60,600  
    Travel Revenue     11,681       11,178       10,709       12,866       11,156  
    Revenue - Services     84,906       73,064       71,325       71,447       71,756  
    Revenue - Goods     163,420       115,906       126,980       125,126       171,592  
    Total Revenue   $ 248,326     $ 188,970     $ 198,305     $ 196,573     $ 243,348  
    Year-over-year growth     (9 )%     (13 )%     (3 )%     (1 )%     (2 )%
    Year-over-year growth, excluding FX     3 %     (10 )%     (3 )%     - %     1 %
    % Third Party and Other     41 %     44 %     39 %     39 %     31 %
    % Direct     59 %     56 %     61 %     61 %     69 %
    Revenue TTM   $ 867,880     $ 840,630     $ 834,888     $ 832,174     $ 827,196  
                         
    Gross Profit:                    
    Local Gross Profit   $ 68,966     $ 58,263     $ 56,849     $ 54,467     $ 56,603  
    % of EMEA Local Gross Billings     34.9 %     33.5 %     34.4 %     34.3 %     31.4 %
    Travel Gross Profit     10,732       10,215       9,784       11,882       10,247  
    % of EMEA Travel Gross Billings     17.9 %     17.9 %     18.5 %     20.6 %     18.4 %
    Gross Profit - Services     79,698       68,478       66,633       66,349       66,850  
    % of EMEA Services Gross Billings     31.0 %     29.6 %     30.5 %     30.7 %     28.3 %
    Gross Profit - Goods     43,026       26,412       23,525       18,710       25,449  
    % of EMEA Goods Gross Billings     18.7 %     16.4 %     14.4 %     12.1 %     12.2 %
    Total Gross Profit   $ 122,724     $ 94,890     $ 90,158     $ 85,059     $ 92,299  
    Year-over-year growth     (14 )%     (18 )%     (13 )%     (18 )%     (25 )%
    % Third Party and Other     77 %     82 %     79 %     83 %     76 %
    % Direct     23 %     18 %     21 %     17 %     24 %
    % of EMEA Total Gross Billings     25.2 %     24.2 %     23.6 %     22.9 %     20.8 %
                         
    Rest of World Segment:                    
    Gross Billings:                    
    Local Gross Billings   $ 83,430     $ 75,294     $ 84,581     $ 80,318     $ 87,349  
    Travel Gross Billings     25,369       23,928       22,300       24,166       20,734  
    Gross Billings - Services     108,799       99,222       106,881       104,484       108,083  
    Gross Billings - Goods     60,685       43,487       38,438       35,717       35,333  
    Total Gross Billings   $ 169,484     $ 142,709     $ 145,319     $ 140,201     $ 143,416  
    Year-over-year growth     (21 )%     (28 )%     (27 )%     (24 )%     (15 )%
    Year-over-year growth, excluding FX     (7 )%     (17 )%     (21 )%     (23 )%     (15 )%
    % Third Party and Other     95 %     95 %     95 %     95 %     95 %
    % Direct     5 %     5 %     5 %     5 %     5 %
    Gross BillingsTTM   $ 751,389     $ 695,263     $ 641,361     $ 597,713     $ 571,645  
                         
    Revenue:                    
    Local Revenue   $ 22,229     $ 22,082     $ 22,461     $ 21,876     $ 22,069  
    Travel Revenue     5,098       5,049       4,321       5,075       4,424  
    Revenue - Services     27,327       27,131       26,782       26,951       26,493  
    Revenue - Goods     18,870       15,057       14,021       13,663       14,291  
    Total Revenue   $ 46,197     $ 42,188     $ 40,803     $ 40,614     $ 40,784  
    Year-over-year growth     (23 )%     (22 )%     (23 )%     (19 )%     (12 )%
    Year-over-year growth, excluding FX     (8 )%     (8 )%     (14 )%     (15 )%     (8 )%
    % Third Party and Other     82 %     85 %     82 %     84 %     82 %
    % Direct     18 %     15 %     18 %     16 %     18 %
    Revenue TTM   $ 203,894     $ 191,828     $ 179,565     $ 169,802     $ 164,389  
                         
    Gross Profit:                    
    Local Gross Profit   $ 18,889     $ 18,771     $ 18,739     $ 18,645     $ 19,245  
    % of Rest of World Local Gross Billings     22.6 %     24.9 %     22.2 %     23.2 %     22.0 %
    Travel Gross Profit     4,040       3,997       3,240       3,962       3,502  
    % of Rest of World Travel Gross Billings     15.9 %     16.7 %     14.5 %     16.4 %     16.9 %
    Gross Profit - Services     22,929       22,768       21,979       22,607       22,747  
    % of Rest of World Services Gross Billings     21.1 %     22.9 %     20.6 %     21.6 %     21.0 %
    Gross Profit - Goods     6,806       5,727       4,277       4,790       4,055  
    % of Rest of World Goods Gross Billings     11.2 %     13.2 %     11.1 %     13.4 %     11.5 %
    Total Gross Profit   $ 29,735     $ 28,495     $ 26,256     $ 27,397     $ 26,802  
    Year-over-year growth     (23 )%     (24 )%     (28 )%     (20 )%     (10 )%
    % Third Party and Other     99 %     100 %     99 %     100 %     102 %
    % Direct     1 %     - %     1 %     - %     (2 )%
    % of Rest of World Total Gross Billings     17.5 %     20.0 %     18.1 %     19.5 %     18.7 %
                         
    Consolidated Results of Operations:                    
    Gross Billings:                    
    Local Gross Billings   $ 812,029     $ 788,950     $ 792,310     $ 769,878     $ 858,445  
    Travel Gross Billings     174,594       184,519       180,568       175,324       166,407  
    Gross Billings - Services     986,623       973,469       972,878       945,202       1,024,852  
    Gross Billings - Goods     720,369       498,541       520,004       486,953       674,605  
    Total Gross Billings   $ 1,706,992     $ 1,472,010     $ 1,492,882     $ 1,432,155     $ 1,699,457  
    Year-over-year growth     (1 )%     (5 )%     (2 )%     (2 )%     - %
    Year-over-year growth, excluding FX     4 %     (3 )%     (2 )%     (2 )%     1 %
    % Third Party and Other     66 %     73 %     71 %     71 %     65 %
    % Direct     34 %     27 %     29 %     29 %     35 %
    Gross Billings TTM   $ 6,255,540     $ 6,175,549     $ 6,139,418     $ 6,104,039     $ 6,096,504  
    Year-over-year growth     - %     (1 )%     (2 )%     (3 )%     (3 )%
                         
    Revenue:                    
    Local Revenue   $ 279,655     $ 276,121     $ 267,216     $ 256,677     $ 292,468  
    Travel Revenue     35,169       37,141       36,431       39,182       34,603  
    Revenue - Services     314,824       313,262       303,647       295,859       327,071  
    Revenue - Goods     602,346       418,709       452,383       424,609       607,814  
    Total Revenue   $ 917,170     $ 731,971     $ 756,030     $ 720,468     $ 934,885  
    Year-over-year growth     4 %     (2 )%     2 %     1 %     2 %
    Year-over-year growth, excluding FX     9 %     (1 )%     3 %     2 %     3 %
    % Third Party and Other     38 %     46 %     42 %     43 %     36 %
    % Direct     62 %     54 %     58 %     57 %     64 %
    Revenue TTM   $ 3,119,516     $ 3,101,131     $ 3,118,766     $ 3,125,639     $ 3,143,354  
    Year-over-year growth     3 %     1 %     - %     1 %     1 %
                         
    Gross Profit:                    
    Local Gross Profit   $ 247,600     $ 241,052     $ 234,400     $ 225,985     $ 261,128  
    % of Consolidated Local Gross Billings     30.5 %     30.6 %     29.6 %     29.4 %     30.4 %
    Travel Gross Profit     29,979       29,924       29,358       33,101       28,801  
    % of Consolidated Travel Gross Billings     17.2 %     16.2 %     16.3 %     18.9 %     17.3 %
    Gross Profit - Services     277,579       270,976       263,758       259,086       289,929  
    % of Consolidated Services Gross Billings     28.1 %     27.8 %     27.1 %     27.4 %     28.3 %
    Gross Profit - Goods     94,161       68,352       69,830       55,031       79,941  
    % of Consolidated Goods Gross Billings     13.1 %     13.7 %     13.4 %     11.3 %     11.9 %
    Total Gross Profit   $ 371,740     $ 339,328     $ 333,588     $ 314,117     $ 369,870  
    Year-over-year growth     (2 )%     (2 )%     (1 )%     (4 )%     (1 )%
    % Third Party and Other     81 %     85 %     82 %     86 %     81 %
    % Direct     19 %     15 %     18 %     14 %     19 %
    % of Total Consolidated Gross Billings     21.8 %     23.1 %     22.3 %     21.9 %     21.8 %
                         
    Marketing   $ 83,208     $ 89,765     $ 91,993     $ 87,858     $ 93,335  
    Selling, general and administrative   $ 287,976     $ 280,988     $ 277,168     $ 253,554     $ 254,458  
    Income (loss) from continuing operations   $ (32,552 )   $ (45,596 )   $ (51,731 )   $ (35,792 )   $ (50,204 )
    Adjusted EBITDA   $ 67,010     $ 31,348