Groupon Announces Fourth Quarter and Fiscal Year 2015 Results

Groupon exceeds top end of guidance range on Revenue, Adjusted EBITDA and Non-GAAP Earnings per Share

Fourth quarter gross billings of $1.7 billion, $6.3 billion for the full year
Fourth quarter revenue of $917.2 million, $3.1 billion for the full year
Fourth quarter Adjusted EBITDA of $67.0 million, $256.8 million for the full year
Fourth quarter GAAP loss per share of $0.08; non-GAAP earnings per share of $0.04
Operating Cash Flow of $292.1 million for the trailing twelve month period; Free Cash Flow of $208.1 million
Affirmed fiscal year 2016 revenue guidance of $2.75 billion to $3.05 billion and increased 2016 expected Adjusted EBITDA range to $80 million to $130 million

CHICAGO-- Groupon, Inc. (GRPN) today announced financial results for the quarter and fiscal year ended December 31, 2015.

“2015 saw sustained progress toward our vision of making Groupon the daily habit in local commerce,” said CEO Rich Williams. “Following a stronger than expected fourth quarter, we enter 2016 with a continued focus on streamlining our global operations, reducing our reliance on low margin products in our shopping business and rekindling our customer acquisition efforts to set the stage for accelerated growth.”

Fourth Quarter 2015 Summary

• Gross billings, which reflect the total dollar value of customer purchases of goods and services, was $1.71 billion in the fourth quarter 2015, compared with $1.72 billion in the fourth quarter 2014. Gross billings declined 1% globally, but grew 4% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter. On this F/X neutral basis, North America billings increased 11%, EMEA declined 2% and Rest of World declined 7%.
• Revenue was $917.2 million in the fourth quarter 2015, compared with $883.2 million in the fourth quarter 2014. Revenue increased 4% globally, or 9% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter. On this F/X neutral basis, North America revenue increased 13%, EMEA increased 3% and Rest of World declined 8%.
• Gross profit was $371.7 million in the fourth quarter 2015, compared with $378.1 million in the fourth quarter 2014. Gross profit declined 2% globally, but grew 4% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter.
• Adjusted EBITDA, a non-GAAP financial measure, was $67.0 million in the fourth quarter 2015, compared with $92.9 million in the fourth quarter 2014.
• Net loss attributable to common stockholders was $46.5 million, or $0.08 per share. Non-GAAP earnings attributable to common stockholders was $23.3 million, or $0.04 per share.
• Operating cash flow for the trailing twelve months ended December 31, 2015 was $292.1 million. Free cash flow, a non-GAAP financial measure, was $233.5 million in the fourth quarter 2015, bringing free cash flow for the trailing twelve months ended December 31, 2015 to $208.1 million.
• Cash and cash equivalents as of December 31, 2015 was $853.4 million and we had no outstanding borrowings under our revolving credit facility.

Full Year 2015 Summary

• Gross billings was $6.3 billion in 2015, compared with $6.2 billion in 2014. Gross billings was approximately flat, but grew 8% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the year. On this F/X neutral basis, North America billings increased 12%, EMEA increased 3% and Rest of World was approximately flat.

• Revenue was $3.1 billion in 2015, compared with $3.0 billion in 2014. Revenue grew 3% globally, or 9% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the year. On this F/X neutral basis, North America revenue increased 12%, EMEA increased 7% and Rest of World declined 6%.

• Gross profit was $1.4 billion in 2015, compared with $1.5 billion in 2014. Gross profit declined 5%, but grew 2% excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the year.
• Adjusted EBITDA was $256.8 million in 2015, compared with $262.3 million in 2014.
• Net earnings attributable to common stockholders were $20.7 million, or $0.03 per share. Earnings per share includes $0.19 from discontinued operations, which was driven by the gain on our sale of a controlling stake in Ticket Monster. Non-GAAP earnings attributable to common stockholders was $91.0 million, or $0.14 per share.

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.

Highlights

• Units: Global units, defined as vouchers and products sold before cancellations and refunds, were approximately flat year-over-year at 62 million for the fourth quarter 2015. North America units increased 12%, EMEA units declined 3% and Rest of World units declined 31%.
• Active deals: At the end of the fourth quarter 2015, on average, active deals were approximately 650,000 globally, with nearly 350,000 in North America. Both include approximately 70,000 Coupons.
• Active customers: Active customers, or customers that have purchased a voucher or product within the last twelve months, grew 3% year-over-year, to 48.9 million as of December 31, 2015, comprising 25.9 million in North America, 15.4 million in EMEA, and 7.6 million in Rest of World.
• Customer spend: Fourth quarter 2015 trailing twelve month billings per average active customer was $130, compared with $137 in the fourth quarter 2014.

Share Repurchase

During the fourth quarter 2015, Groupon repurchased 35,326,954 shares of its Class A common stock for an aggregate purchase price of $112.5 million, as of December 31, 2015. Up to $156.8 million of Class A common stock remained available for repurchase under Groupon’s share repurchase program through August 2017. The timing and amount of any share repurchases are determined based on market conditions, share price and other factors, and the programs may be discontinued or suspended at any time.

Outlook

Groupon’s outlook for 2016 reflects current foreign exchange rates, as well as expected marketing investments, continued progress on increasing Shopping margins, and a reduction of our international footprint. We continue to expect revenue of between $2.75 and $3.05 billion for the full year, and we are increasing the company’s expected 2016 adjusted EBITDA range to between $80 million and $130 million. Moving forward, we are only providing annual Revenue and adjusted EBITDA guidance, which we will update quarterly.

Conference Call

A conference call will be webcast live today at 4:00 p.m. CST / 5:00 p.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. generally accepted accounting principles (U.S. GAAP), we have provided the following non-GAAP financial measures in this release and the accompanying tables: foreign exchange rate neutral operating results, adjusted EBITDA, non-GAAP net income attributable to common stockholders, non-GAAP earnings per share and free cash flow. These non-GAAP financial measures, which are presented on a continuing operations basis, are intended to aid investors in better understanding Groupon's current financial performance and its 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, 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: interest income, interest expense, gains and losses related to minority investments, and foreign currency gains and losses. 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.

Items That Are Unusual in Nature or Infrequently Occurring. During the twelve months ended December 31, 2015, items that we believe to be unusual in nature or infrequently occurring were (a) charges related to our restructuring program, (b) the gain on our disposition of Groupon India, (c) the write-off of a prepaid asset related to a marketing program that was discontinued because the counterparty ceased operations and (d) the expense related to a significant increase in the contingent liability for our securities litigation matter. We exclude items that are unusual in nature or infrequently occurring because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons to our historical results.

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 financial 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 items that are unusual in nature or infrequently occurring. 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 results in the same manner as our management and Board of Directors.

Non-GAAP net income (loss) attributable to common stockholders and non-GAAP earnings (loss) per share 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,
• items that are unusual in nature or infrequently occurring,
• 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 these 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.

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. The risks and uncertainties that could cause our results to differ materially from those included in the forward-looking statements 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 and the impact of our shift away from lower margin products in our Goods category; effectively dealing with challenges arising from our international operations, including fluctuations in currency exchange rates; retaining existing customers and adding new customers, including as we increase our marketing spend and shift away from lower margin products in our Goods category; 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. 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 ended December 31, 2015 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 11, 2016. 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 (GRPN) is a global leader of local commerce and the place you start when you want to buy just about anything, anytime, anywhere. By leveraging the company’s global relationships and scale, Groupon offers consumers a vast marketplace of unbeatable deals all over the world. Shoppers discover the best a city has to offer on the web or on mobile with Groupon Local, enjoy vacations with Groupon Getaways, and find a curated selection of electronics, fashion, home furnishings and more with Groupon Goods.

Groupon is redefining how traditional small businesses attract, retain and interact with customers by providing merchants with a suite of products and services, including customizable deal campaigns, credit card payment processing capabilities, and point-of-sale solutions that help businesses grow and operate more effectively. To search for great deals or subscribe to Groupon emails, visit www.Groupon.com. To download Groupon's top-rated mobile apps, visit www.groupon.com/mobile. To learn more about the company’s merchant solutions and how to work with Groupon, visit www.GrouponWorks.com

Groupon, Inc.
Summary Consolidated and Segment Results
(in thousands, except share and per share amounts)
(unaudited)
The financial results of Ticket Monster, including the gain on disposition and related tax effects, are presented as discontinued operations in the accompanying condensed consolidated financial statements and tables for the three months and year ended December 31, 2015. Additionally, the assets and liabilities of Ticket Monster are presented as held for sale in the accompanying condensed consolidated balance sheet as of December 31, 2014. All prior period financial information and operational metrics have been retrospectively adjusted to reflect this presentation.

		Three Months Ended																				Year Ended
		December 31,																				December 31,
																		Y/Y % Growth																				Y/Y % Growth
														FX Effect				excluding																FX Effect				excluding
			2015				2014			Y/Y % Growth				(2)				FX (2)					2015				2014			Y/Y % Growth				(2)				FX (2)
Gross Billings(1):
North America		$	1,050,361			$	948,579			10.7		%		$	(1,511	)		10.9		%		$	3,709,797			$	3,303,479			12.3		%		$	(5,415	)		12.5		%
EMEA			487,147				560,541			(13.1	)				(61,482	)		(2.1	)				1,794,354				2,046,807			(12.3	)				(317,640	)		3.2
Rest of World			169,484				215,549			(21.4	)				(31,574	)		(6.7	)				751,389				887,546			(15.3	)				(132,679	)		(0.4	)
Consolidated gross billings		$	1,706,992			$	1,724,669			(1.0	)	%		$	(94,567	)		4.5		%		$	6,255,540			$	6,237,832			0.3		%		$	(455,734	)		7.6		%
Revenue:
North America		$	622,647			$	550,974			13.0		%		$	(408	)		13.1		%		$	2,047,742			$	1,824,461			12.2		%		$	(1,351	)		12.3		%
EMEA			248,326				272,475			(8.9	)				(33,198	)		3.3					867,880				961,130			(9.7	)				(157,892	)		6.7
Rest of World			46,197				59,779			(22.7	)				(8,785	)		(8.0	)				203,894				256,532			(20.5	)				(36,932	)		(6.1	)
Consolidated revenue		$	917,170			$	883,228			3.8		%		$	(42,391	)		8.6		%		$	3,119,516			$	3,042,123			2.5		%		$	(196,175	)		9.0		%
Income (loss) from operations		$	(5,423	)		$	33,640			(116.1	)	%		$	(2,742	)		(108.0	)	%		$	(79,777	)		$	30,701			(359.9	)	%		$	(2,064	)		(353.1	)	%
Income (loss) from continuing operations			(32,552	)			26,566																(89,171	)			(18,473	)
Income (loss) from discontinued operations, net of tax (3)			(10,613	)			(15,182	)															122,850				(45,446	)
Net income (loss) attributable to Groupon, Inc.		$	(46,528	)		$	8,788															$	20,668			$	(73,090	)
Basic net income (loss) per share:
Continuing operations		$	(0.06	)		$	0.04															$	(0.16	)		$	(0.04	)
Discontinued operations			(0.02	)			(0.03	)															0.19				(0.07	)
Basic net income (loss) per share		$	(0.08	)		$	0.01															$	0.03			$	(0.11	)
Diluted net income (loss) per share:
Continuing operations		$	(0.06	)		$	0.04															$	(0.16	)		$	(0.04	)
Discontinued operations			(0.02	)			(0.03	)															0.19				(0.07	)
Diluted net income (loss) per share		$	(0.08	)		$	0.01															$	0.03			$	(0.11	)
Weighted average number of shares outstanding
Basic			607,517,010				671,885,967																650,106,225				674,832,393
Diluted			607,517,010				681,543,847																650,106,225				674,832,393

(1)		Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.
(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, 2014.
(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.

Groupon, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
		Three Months Ended December 31,								Year Ended December 31,
		2015				2014				2015				2014
Operating activities
Net income (loss)		$	(43,165	)		$	11,384			$	33,679			$	(63,919	)
Less: Income (loss) from discontinued operations, net of tax			(10,613	)			(15,182	)			122,850				(45,446	)
Income (loss) from continuing operations			(32,552	)			26,566				(89,171	)			(18,473	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property, equipment and software			28,807				25,414				113,048				94,145
Amortization of acquired intangible assets			4,956				4,708				19,922				20,896
Stock-based compensation			32,865				29,961				142,069				115,290
Restructuring-related long-lived asset impairments			6,922				—				7,267				—
Gain on disposition of business			—				—				(13,710	)			—
Deferred income taxes			6,267				(9,168	)			(8,985	)			(11,124	)
Excess tax benefits on stock-based compensation			(1,431	)			(3,407	)			(7,629	)			(15,980	)
Loss on equity method investments			—				—				—				459
Gain (loss) from changes in fair value of contingent consideration			508				(1,385	)			240				(2,444	)
Loss from changes in fair value of investments			829				—				2,943				—
Impairments of investments			—				—				—				2,036
Change in assets and liabilities, net of acquisitions:
Restricted cash			75				(491	)			4,630				7,195
Accounts receivable			6,960				10,280				13,313				(16,277	)
Prepaid expenses and other current assets			61,358				36,816				21,545				13,933
Accounts payable			9,545				(1,073	)			8,601				(14,046	)
Accrued merchant and supplier payables			142,069				155,991				40,217				54,921
Accrued expenses and other current liabilities			(1,174	)			11,117				56,040				(9,986	)
Other, net			(16,980	)			(12,057	)			(18,222	)			31,952
Net cash provided by (used in) operating activities from continuing operations			249,024				273,272				292,118				252,497
Net cash provided by (used in) operating activities from discontinued operations			(670	)			13,550				(37,248	)			36,327
Net cash provided by (used in) operating activities			248,354				286,822				254,870				288,824
Net cash provided by (used in) investing activities from continuing operations			(31,238	)			(35,175	)			(177,250	)			(152,818	)
Net cash provided by (used in) investing activities from discontinued operations			—				(714	)			244,470				(76,638	)
Net cash provided by (used in) investing activities			(31,238	)			(35,889	)			67,220				(229,456	)
Net cash provided by (used in) financing activities			(322,166	)			(21,088	)			(508,156	)			(194,156	)
Effect of exchange rate changes on cash and cash equivalents, including cash classified within current assets held for sale			(5,147	)			(13,100	)			(32,485	)			(33,771	)
Net increase (decrease) in cash and cash equivalents, including cash classified within current assets held for sale			(110,197	)			216,745				(218,551	)			(168,559	)
Less: Net increase (decrease) in cash classified within current assets held for sale			—				11,955				(55,279	)			55,279
Net increase (decrease) in cash and cash equivalents			(110,197	)			204,790				(163,272	)			(223,838	)
Cash and cash equivalents, beginning of period			963,559				811,844				1,016,634				1,240,472
Cash and cash equivalents, end of period		$	853,362			$	1,016,634			$	853,362			$	1,016,634

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,
		2015				2014				2015				2014
Revenue:
Third party and other		$	345,260			$	367,902			$	1,372,533			$	1,501,011
Direct			571,910				515,326				1,746,983				1,541,112
Total revenue			917,170				883,228				3,119,516				3,042,123
Cost of revenue:
Third party and other			43,640				49,725				188,932				203,058
Direct			501,790				455,394				1,545,519				1,373,756
Total cost of revenue			545,430				505,119				1,734,451				1,576,814
Gross profit			371,740				378,109				1,385,065				1,465,309
Operating expenses:
Marketing			83,208				59,812				254,335				241,954
Selling, general and administrative			287,976				285,466				1,192,792				1,191,385
Restructuring charges			5,422				—				29,568				—
Gain on disposition of business			—				—				(13,710	)			—
Acquisition-related expense (benefit), net			557				(809	)			1,857				1,269
Total operating expenses			377,163				344,469				1,464,842				1,434,608
Income (loss) from operations			(5,423	)			33,640				(79,777	)			30,701
Other income (expense), net (1)			(3,393	)			(11,531	)			(28,539	)			(33,450	)
Income (loss) from continuing operations before provision (benefit) for income taxes			(8,816	)			22,109				(108,316	)			(2,749	)
Provision (benefit) for income taxes			23,736				(4,457	)			(19,145	)			15,724
Income (loss) from continuing operations			(32,552	)			26,566				(89,171	)			(18,473	)
Income (loss) from discontinued operations, net of tax			(10,613	)			(15,182	)			122,850				(45,446	)
Net income (loss)			(43,165	)			11,384				33,679				(63,919	)
Net income (loss) attributable to noncontrolling interests			(3,363	)			(2,596	)			(13,011	)			(9,171	)
Net income (loss) attributable to Groupon, Inc.		$	(46,528	)		$	8,788			$	20,668			$	(73,090	)
Basic net income (loss) per share:
Continuing operations		$	(0.06	)		$	0.04			$	(0.16	)		$	(0.04	)
Discontinued operations			(0.02	)			(0.03	)			0.19				(0.07	)
Basic net income (loss) per share		$	(0.08	)		$	0.01			$	0.03			$	(0.11	)
Diluted net income (loss) per share:
Continuing operations		$	(0.06	)		$	0.04			$	(0.16	)		$	(0.04	)
Discontinued operations			(0.02	)			(0.03	)			0.19				(0.07	)
Diluted net income (loss) per share		$	(0.08	)		$	0.01			$	0.03			$	(0.11	)
Weighted average number of shares outstanding
Basic			607,517,010				671,885,967				650,106,225				674,832,393
Diluted			607,517,010				681,543,847				650,106,225				674,832,393

(1)

Other income (expense), net includes foreign currency losses of $1.7 million and $11.4 million for the three months ended December 31, 2015 and 2014, respectively, and foreign currency losses of $23.8 million and $31.5 million for the year ended December 31, 2015 and 2014, respectively.

Groupon, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
			December 31,
			2015				2014
Assets
Current assets:
Cash and cash equivalents			$	853,362			$	1,016,634
Accounts receivable, net				68,175				90,597
Prepaid expenses and other current assets				153,705				192,382
Current assets held for sale				—				85,445
Total current assets				1,075,242				1,385,058
Property, equipment and software, net				198,897				176,004
Goodwill				287,332				236,756
Intangible assets, net				36,483				30,609
Investments (including $163.7 million and $7.4 million at December 31, 2015 and December 31, 2014, respectively, at fair value)				178,236				24,298
Deferred income taxes				3,454				57,594
Other non-current assets				16,620				16,173
Non-current assets held for sale				—				301,105
Total Assets			$	1,796,264			$	2,227,597
Liabilities and Equity
Current liabilities:
Accounts payable			$	24,590			$	13,822
Accrued merchant and supplier payables				776,211				772,156
Accrued expenses and other current liabilities				402,724				341,381
Current liabilities held for sale				—				166,239
Total current liabilities				1,203,525				1,293,598
Deferred income taxes				8,612				32,771
Other non-current liabilities				113,540				129,531
Non-current liabilities held for sale				—				6,753
Total Liabilities				1,325,677				1,462,653
Commitments and contingencies (see Note 10)
Stockholders' Equity
Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized, 717,387,446 shares issued and 588,919,281 shares outstanding at December 31, 2015 and 699,008,084 shares issued and 671,768,980 shares outstanding at December 31, 2014				72				70
Class B common stock, par value $0.0001 per share, 10,000,000 shares authorized, 2,399,976 shares issued and outstanding at December 31, 2015 and December 31, 2014				—				—
Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized, no shares issued and outstanding at December 31, 2015 and December 31, 2014				—				—
Additional paid-in capital				1,964,453				1,847,420
Treasury stock, at cost, 128,468,165 shares at December 31, 2015 and 27,239,104 shares at December 31, 2014				(645,041	)			(198,467	)
Accumulated deficit				(901,292	)			(921,960	)
Accumulated other comprehensive income (loss)				51,206				35,763
Total Groupon, Inc. Stockholders' Equity				469,398				762,826
Noncontrolling interests				1,189				2,118
Total Equity				470,587				764,944
Total Liabilities and Equity			$	1,796,264			$	2,227,597

Groupon, Inc.
Segment Information
(in thousands)
(unaudited)
			Three Months Ended December 31,								Year Ended December 31,
			2015				2014				2015				2014
North America
Gross billings (1)			$	1,050,361			$	948,579			$	3,709,797			$	3,303,479
Revenue				622,647				550,974				2,047,742				1,824,461
Segment cost of revenue and operating expenses (2)(3)(4)				625,171				520,140				2,029,643				1,755,113
Segment operating income (loss) (2)			$	(2,524	)		$	30,834			$	18,099			$	69,348
Segment operating income (loss) as a percent of segment gross billings				(0.2	)%			3.3	%			0.5	%			2.1	%
Segment operating income (loss) as a percent of segment revenue				(0.4	)%			5.6	%			0.9	%			3.8	%
EMEA
Gross billings (1)			$	487,147			$	560,541			$	1,794,354			$	2,046,807
Revenue				248,326				272,475				867,880				961,130
Segment cost of revenue and operating expenses (2)(4)(5)				211,443				237,468				797,786				857,062
Segment operating income (2)			$	36,883			$	35,007			$	70,094			$	104,068
Segment operating income as a percent of segment gross billings				7.6	%			6.2	%			3.9	%			5.1	%
Segment operating income as a percent of segment revenue				14.9	%			12.8	%			8.1	%			10.8	%
Rest of World
Gross billings (1)			$	169,484			$	215,549			$	751,389			$	887,546
Revenue				46,197				59,779				203,894				256,532
Segment cost of revenue and operating expenses (2)(4)				52,731				62,828				228,273				282,688
Segment operating loss (2)			$	(6,534	)		$	(3,049	)		$	(24,379	)		$	(26,156	)
Segment operating loss as a percent of segment gross billings				(3.9	)%			(1.4	)%			(3.2	)%			(2.9	)%
Segment operating loss as a percent of segment revenue				(14.1	)%			(5.1	)%			(12.0	)%			(10.2	)%

(1)		Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.
(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, 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 financial measures. The Company reconciles Adjusted EBITDA to the most comparable U.S. GAAP financial 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 financial 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 financial measure, "Income (loss) from continuing operations."

			Q4 2014		Q1 2015		Q2 2015		Q3 2015		Q4 2015
Income (loss) from continuing operations			$ 26,566		$ (16,739)		$ (15,267)		$ (24,613)		$ (32,552)
Adjustments:
Stock-based compensation (1)			29,961		35,144		38,467		35,432		32,691
Depreciation and amortization			30,122		32,200		31,372		35,635		33,763
Acquisition-related expense (benefit), net			(809)		(269)		505		1,064		557
Restructuring charges			—		—		—		24,146		5,422
Gain on disposition of business			—		—		—		(13,710)		—
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
Provision (benefit) for income taxes			(4,457)		2,107		8,982		(53,970)		23,736
Total adjustments			66,348		89,109		76,385		80,947		99,562
Adjusted EBITDA			$ 92,914		$ 72,370		$ 61,118		$ 56,334		$ 67,010

(1)		Includes 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 and $0.2 million of additional stock-based compensation for the three months ended June 30, 2015, three months ended September 30, 2015 and three months ended December 31, 2015, respectively.
		The following is a reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, "Net income (loss) from continuing operations" for the years ended December 31, 2015 and 2014:

			Year Ended December 31,
			2015				2014
Income (loss) from continuing operations			$	(89,171	)		$	(18,473	)
Adjustments:
Stock-based compensation (1)				141,734				115,290
Depreciation and amortization				132,970				115,041
Acquisition-related expense (benefit), net				1,857				1,269
Restructuring charges				29,568				—
Gain on disposition of business				(13,710	)			—
Prepaid marketing write-off				6,690				—
Securities litigation expense				37,500				—
Non-operating expense (income), net				28,539				33,450
Provision (benefit) for income taxes				(19,145	)			15,724
Total adjustments				346,003				280,774
Adjusted EBITDA			$	256,832			$	262,301

(1)		Includes stock-based compensation recorded within cost of revenue, marketing expense, and selling, general and administrative expense. 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, 2015:

			Three Months Ended				Year Ended
			December 31, 2015				December 31, 2015
Net income (loss) attributable to common stockholders			$	(46,528	)		$	20,668
Stock-based compensation				32,865				142,069
Amortization of acquired intangible assets				4,956				19,922
Acquisition-related expense (benefit), net				557				1,857
Restructuring charges				5,422				29,568
Gain on disposition of business				—				(13,710	)
Prepaid marketing write-off				—				6,690
Securities litigation expense				—				37,500
Intercompany foreign currency losses (gains) and reclassifications of translation adjustments to earnings (1)				(400	)			20,266
Loss from changes in fair value of investments				829				2,943
Income tax effect of above adjustments				14,979				(53,953	)
Loss (income) from discontinued operations, net of tax				10,613				(122,850	)
Non-GAAP net income (loss) attributable to common stockholders			$	23,293			$	90,970
Diluted shares				607,517,010				650,106,225
Incremental diluted shares				6,367,291				6,854,909
Adjusted diluted shares				613,884,301				656,961,134
Diluted net income (loss) per share (2)			$	(0.08	)		$	0.03
Impact of stock-based compensation, amortization of acquired intangible assets, acquisition-related expense (benefit), net, intercompany foreign currency losses (gains), items that are unusual in nature and infrequently occurring, income (loss) from discontinued operations and related tax effects				0.12				0.11
Non-GAAP net income (loss) per share			$	0.04			$	0.14

(1)		For the three months and year ended December 31, 2015, a $3.7 million net cumulative translation adjustment gain was reclassified to earnings as a result of the Company's exit from certain countries as part of its restructuring plan. For the year ended December 31, 2015, a $4.4 million loss related to the cumulative translation adjustment from the Company's legacy business in the Republic of Korea was reclassified to earnings as a result of the Ticket Monster disposition.
(2)		The sum of per share amounts for quarterly periods may not equal year-to-date amounts due to rounding.
		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, 2015 was as follows:

			Three Months Ended December 31, 2015												Three Months Ended December 31, 2015
			At Avg. Q4 2014				Exchange Rate				As				At Avg. Q3 2015				Exchange Rate				As
			Rates (1)				Effect (2)				Reported				Rates (3)				Effect (2)				Reported
Gross billings			$	1,801,559			$	(94,567	)		$	1,706,992			$	1,721,580			$	(14,588	)		$	1,706,992
Revenue				959,561				(42,391	)			917,170				923,903				(6,733	)			917,170
Income (loss) from operations			$	(2,681	)		$	(2,742	)		$	(5,423	)		$	(4,620	)		$	(803	)		$	(5,423	)

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, 2015 was as follows:

			Year Ended December 31, 2015												Year Ended December 31, 2015
			At Avg. Q4												At Avg. Q4'14-
			2014 YTD				Exchange Rate				As				Q3'15				Exchange Rate				As
			Rates (1)				Effect (2)				Reported				Rates (3)				Effect (2)				Reported
Gross billings			$	6,711,274			$	(455,734	)		$	6,255,540			$	6,346,012			$	(90,472	)		$	6,255,540
Revenue				3,315,691				(196,175	)			3,119,516				3,158,228				(38,712	)			3,119,516
Income (loss) from operations			$	(77,713	)		$	(2,064	)		$	(79,777	)		$	(78,679	)		$	(1,098	)		$	(79,777	)

(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, 2014.
(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, 2015.

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 2014				Q1 2015				Q2 2015				Q3 2015				Q4 2015
EMEA Gross billings growth, excluding FX			8		%		7		%		9		%		(1	)	%		(2	)	%
FX Effect			(9	)			(18	)			(19	)			(14	)			(11	)
EMEA Gross billings growth			(1	)	%		(11	)	%		(10	)	%		(15	)	%		(13	)	%
Rest of World Gross billings growth, excluding FX			—		%		(1	)	%		6		%		—		%		(7	)	%
FX Effect			(10	)			(11	)			(15	)			(19	)			(14	)
Rest of World Gross billings growth			(10	)	%		(12	)	%		(9	)	%		(19	)	%		(21	)	%
Consolidated Gross billings growth, excluding FX			13		%		10		%		10		%		6		%		4		%
FX Effect			(5	)			(8	)			(8	)			(8	)			(5	)
Consolidated Gross billings growth			8		%		2		%		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 2014				Q1 2015				Q2 2015				Q3 2015				Q4 2015
EMEA Revenue growth, excluding FX			18		%		13		%		9		%		2		%		3		%
FX Effect			(10	)			(19	)			(19	)			(15	)			(12	)
EMEA Revenue growth			8		%		(6	)	%		(10	)	%		(13	)	%		(9	)	%
Rest of World Revenue growth, excluding FX			(9	)	%		(8	)	%		(4	)	%		(5	)	%		(8	)	%
FX Effect			(10	)			(10	)			(14	)			(18	)			(15	)
Rest of World Revenue growth			(19	)	%		(18	)	%		(18	)	%		(23	)	%		(23	)	%
Consolidated Revenue growth, excluding FX			19		%		10		%		11		%		7		%		9		%
FX Effect			(4	)			(7	)			(8	)			(7	)			(5	)
Consolidated Revenue growth			15		%		3		%		3		%		—		%		4		%

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, 2015 was as follows:

					Exchange
		At Avg. Q4			Rate				December 31, 2015			December 31, 2014			Y/Y %		Y/Y% Growth
		2014 Rates (1)			Effect (2)				As Reported			As Reported			Growth		excluding FX
Local:
Third party and other		$	532,015		$	(861	)		$	531,154		$	499,250		6.4	%	6.6	%
Travel:
Third party			89,589			(200	)			89,389			80,296		11.3	%	11.6	%
Total services			621,604			(1,061	)			620,543			579,546		7.1	%	7.3	%
Goods:
Third party			13,401			(450	)			12,951			8,277		56.5	%	61.9	%
Direct			416,867			—				416,867			360,756		15.6		15.6
Total			430,268			(450	)			429,818			369,033		16.5	%	16.6
Total gross billings		$	1,051,872		$	(1,511	)		$	1,050,361		$	948,579		10.7	%	10.9	%

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, 2015 was as follows:

					Exchange
		At Avg. Q4			Rate				December 31, 2015			December 31, 2014			Y/Y %			Y/Y% Growth
		2014 Rates (1)			Effect (2)				As Reported			As Reported			Growth			excluding FX
Local:
Third party and other		$	219,817		$	(22,372	)		$	197,445		$	242,119		(18.5	)	%	(9.2	)	%
Travel:
Third party			68,439		$	(8,603	)			59,836			72,710		(17.7	)	%	(5.9	)	%
Total services			288,256			(30,975	)			257,281			314,829		(18.3	)	%	(8.4	)	%
Goods:
Third party			92,612			(9,317	)			83,295			99,710		(16.5	)	%	(7.1	)	%
Direct			167,761			(21,190	)			146,571			146,002		0.4			14.9
Total			260,373			(30,507	)			229,866			245,712		(6.4	)	%	6.0		%
Total gross billings		$	548,629		$	(61,482	)		$	487,147		$	560,541		(13.1	)	%	(2.1	)	%

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, 2015 was as follows:

					Exchange
		At Avg. Q4			Rate				December 31, 2015			December 31, 2014			Y/Y %			Y/Y% Growth
		2014 Rates (1)			Effect (2)				As Reported			As Reported			Growth			excluding FX
Local:
Third party and other		$	99,590		$	(16,160	)		$	83,430		$	105,420		(20.9	)	%	(5.5	)	%
Travel:
Third party			31,010		$	(5,641	)			25,369			32,313		(21.5	)	%	(4.0	)	%
Total services			130,600			(21,801	)			108,799			137,733		(21.0	)	%	(5.2	)	%
Goods:
Third party			60,357			(8,144	)			52,213			69,248		(24.6	)	%	(12.8	)	%
Direct			10,101			(1,629	)			8,472			8,568		(1.1	)		17.9
Total			70,458			(9,773	)			60,685			77,816		(22.0	)	%	(9.5	)	%
Total gross billings		$	201,058		$	(31,574	)		$	169,484		$	215,549		(21.4	)	%	(6.7	)	%

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, 2015 was as follows:

				Exchange
		At Avg. Q4		Rate		December 31, 2015		December 31, 2014		Y/Y %		Y/Y% Growth
		2014 Rates (1)		Effect (2)		As Reported		As Reported		Growth		excluding FX
Local:
Third party and other		$ 851,422		$ (39,393)		$ 812,029		$ 846,789		(4.1)	%	0.5	%
Travel:
Third party		$ 189,038		$ (14,444)		174,594		185,319		(5.8)	%	2.0	%
Total services		1,040,460		(53,837)		986,623		1,032,108		(4.4)	%	0.8	%
Goods:
Third party		166,370		(17,911)		148,459		177,235		(16.2)	%	(6.1)	%
Direct		594,729		(22,819)		571,910		515,326		11.0		15.4
Total		761,099		(40,730)		720,369		692,561		4.0	%	9.9	%
Total gross billings		$ 1,801,559		$ (94,567)		$ 1,706,992		$ 1,724,669		(1.0)	%	4.5	%

		(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, 2014.
		(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.

Groupon, Inc.
Supplemental Financial Information and Business Metrics (9) (10)
(financial data in thousands; active customers in millions)
(unaudited)
			Q4 2014				Q1 2015				Q2 2015				Q3 2015				Q4 2015
Segments
North America Segment:
Gross Billings (1):
	Local (2) Gross Billings		$	499,250			$	512,558			$	499,378			$	481,608			$	531,154
	Travel Gross Billings			80,296				96,678				102,908				101,801				89,389
	Gross Billings - Services			579,546				609,236				602,286				583,409				620,543
	Gross Billings - Goods			369,033				284,741				293,970				285,794				429,818
	Total Gross Billings		$	948,579			$	893,977			$	896,256			$	869,203			$	1,050,361
	Year-over-year growth			20		%		14		%		12		%		12		%		11		%
	% Third Party and Other			62		%		69		%		68		%		68		%		60		%
	% Direct			38		%		31		%		32		%		32		%		40		%
Gross BillingsTrailing Twelve Months (TTM)			$	3,303,479			$	3,415,687			$	3,513,098			$	3,608,015			$	3,709,797
Revenue (3):
	Local Revenue		$	170,946			$	180,864			$	172,461			$	163,786			$	184,201
	Travel Revenue			17,165				19,989				21,958				21,394				18,390
	Revenue - Services			188,111				200,853				194,419				185,180				202,591
	Revenue - Goods			362,863				279,029				286,863				278,751				420,056
	Total Revenue		$	550,974			$	479,882			$	481,282			$	463,931			$	622,647
	Year-over-year growth			24		%		11		%		14		%		11		%		13		%
	% Third Party and Other			35		%		42		%		41		%		40		%		33		%
	% Direct			65		%		58		%		59		%		60		%		67		%
Revenue TTM			$	1,824,461			$	1,873,281			$	1,930,632			$	1,976,069			$	2,047,742
Gross Profit (4):
	Local Gross Profit		$	147,582			$	154,776			$	147,574			$	138,798			$	159,745
	% of North America Local Gross Billings			29.6		%		30.2		%		29.6		%		28.8		%		30.1		%
	Travel Gross Profit			14,187				15,791				18,385				17,644				15,207
	% of North America Travel Gross Billings			17.7		%		16.3		%		17.9		%		17.3		%		17.0		%
	Gross Profit - Services			161,769				170,567				165,959				156,442				174,952
	% of North America Services Gross Billings			27.9		%		28.0		%		27.6		%		26.8		%		28.2		%
	Gross Profit - Goods			34,404				23,923				30,598				34,801				44,329
	% of North America Goods Gross Billings			9.3		%		8.4		%		10.4		%		12.2		%		10.3		%
	Total Gross Profit		$	196,173			$	194,490			$	196,557			$	191,243			$	219,281
	Year-over-year growth			13		%		8		%		9		%		9		%		12		%
	% Third Party and Other			83		%		88		%		85		%		83		%		81		%
	% Direct			17		%		12		%		15		%		17		%		19		%
	% of North America Total Gross Billings			20.7		%		21.8		%		21.9		%		22.0		%		20.9		%
EMEA Segment:
Gross Billings:
	Local Gross Billings		$	242,119			$	217,598			$	198,553			$	182,540			$	197,445
	Travel Gross Billings			72,710				65,065				59,544				64,916				59,836
	Gross Billings - Services			314,829				282,663				258,097				247,456				257,281
	Gross Billings - Goods			245,712				176,526				175,439				167,026				229,866
	Total Gross Billings		$	560,541			$	459,189			$	433,536			$	414,482			$	487,147
	Year-over-year growth			(1	)	%		(11	)	%		(10	)	%		(15	)	%		(13	)	%
	Year-over-year growth, excluding FX (5)			8		%		7		%		9		%		(1	)	%		(2	)	%
	% Third Party and Other			74		%		77		%		76		%		75		%		70		%
	% Direct			26		%		23		%		24		%		25		%		30		%
Gross Billings TTM			$	2,046,807			$	1,992,408			$	1,942,689			$	1,867,748			$	1,794,354
Revenue:
	Local Revenue		$	95,572			$	82,536			$	75,543			$	70,781			$	73,225
	Travel Revenue			16,321				14,717				13,100				13,561				11,681
	Revenue - Services			111,893				97,253				88,643				84,342				84,906
	Revenue - Goods			160,582				118,967				115,404				114,945				163,420
	Total Revenue		$	272,475			$	216,220			$	204,047			$	199,287			$	248,326
	Year-over-year growth			8		%		(6	)	%		(10	)	%		(13	)	%		9		%
	Year-over-year growth, excluding FX			18		%		13		%		9		%		2		%		3		%
	% Third Party and Other			46		%		51		%		48		%		48		%		41		%
	% Direct			54		%		49		%		52		%		52		%		59		%
Revenue TTM			$	961,130			$	946,457			$	922,814			$	892,029			$	867,880
Gross Profit:
	Local Gross Profit		$	90,150			$	77,356			$	70,270			$	66,288			$	68,966
	% of EMEA Local Gross Billings			37.2		%		35.5		%		35.4		%		36.3		%		34.9		%
	Travel Gross Profit			15,226				12,400				11,939				12,323				10,732
	% of EMEA Travel Gross Billings			20.9		%		19.1		%		20.1		%		19.0		%		17.9		%
	Gross Profit - Services			105,376				89,756				82,209				78,611				79,698
	% of EMEA Services Gross Billings			33.5		%		31.8		%		31.9		%		31.8		%		31.0		%
	Gross Profit - Goods			38,154				25,481				21,878				24,905				43,026
	% of EMEA Goods Gross Billings			15.5		%		14.4		%		12.5		%		14.9		%		18.7		%
	Total Gross Profit		$	143,530			$	115,237			$	104,087			$	103,516			$	122,724
	Year-over-year growth			(6	)	%		(18	)	%		(26	)	%		(21	)	%		(14	)	%
	% Third Party and Other			82		%		87		%		86		%		86		%		77		%
	% Direct			18		%		13		%		14		%		14		%		23		%
	% of EMEA Total Gross Billings			25.6		%		25.1		%		24.0		%		25.0		%		25.2		%
Rest of World Segment:
Gross Billings:
	Local Gross Billings		$	105,420			$	99,735			$	100,403			$	92,972			$	83,430
	Travel Gross Billings			32,313				32,946				31,263				30,709				25,369
	Gross Billings - Services			137,733				132,681				131,666				123,681				108,799
	Gross Billings - Goods			77,816				66,154				67,555				60,168				60,685
	Total Gross Billings		$	215,549			$	198,835			$	199,221			$	183,849			$	169,484
	Year-over-year growth			(10	)	%		(12	)	%		(9	)	%		(19	)	%		(21	)	%
	Year-over-year growth, excluding FX			—		%		(1	)	%		6		%		—		%		(7	)	%
	% Third Party and Other			96		%		98		%		97		%		96		%		95		%
	% Direct			4		%		2		%		3		%		4		%		5		%
Gross Billings TTM			$	887,546			$	861,032			$	840,243			$	797,454			$	751,389
Revenue:
	Local Revenue		$	32,264			$	30,281			$	28,499			$	26,372			$	22,229
	Travel Revenue			5,757				6,495				6,363				6,135				5,098
	Revenue - Services			38,021				36,776				34,862				32,507				27,327
	Revenue - Goods			21,758				17,478				18,204				17,870				18,870
	Total Revenue		$	59,779			$	54,254			$	53,066			$	50,377			$	46,197
	Year-over-year growth			(19	)	%		(18	)	%		(18	)	%		(23	)	%		(23	)	%
	Year-over-year growth, excluding FX			(9	)	%		(8	)	%		(4	)	%		(5	)	%		(8	)	%
	% Third Party and Other			86		%		91		%		87		%		86		%		82		%
	% Direct			14		%		9		%		13		%		14		%		18		%
Revenue TTM			$	256,532			$	244,326			$	232,802			$	217,476			$	203,894
Gross Profit:
	Local Gross Profit		$	27,175			$	26,161			$	24,567			$	22,568			$	18,889
	% of Rest of World Local Gross Billings			25.8		%		26.2		%		24.5		%		24.3		%		22.6		%
	Travel Gross Profit			3,815				4,906				5,012				4,859				4,040
	% of Rest of World Travel Gross Billings			11.8		%		14.9		%		16.0		%		15.8		%		15.9		%
	Gross Profit - Services			30,990				31,067				29,579				27,427				22,929
	% of Rest of World Services Gross Billings			22.5		%		23.4		%		22.5		%		22.2		%		21.1		%
	Gross Profit - Goods			7,416				6,612				6,784				6,726				6,806
	% of Rest of World Goods Gross Billings			9.5		%		10.0		%		10.0		%		11.2		%		11.2		%
	Total Gross Profit		$	38,406			$	37,679			$	36,363			$	34,153			$	29,735
	Year-over-year growth			(24	)	%		(16	)	%		(20	)	%		(28	)	%		(23	)	%
	% Third Party and Other			96		%		99		%		99		%		99		%		99		%
	% Direct			4		%		1		%		1		%		1		%		1		%
	% of Rest of World Total Gross Billings			17.8		%		18.9		%		18.3		%		18.6		%		17.5		%
Consolidated Results of Operations:
Gross Billings:
	Local Gross Billings		$	846,789			$	829,891			$	798,334			$	757,120			$	812,029
	Travel Gross Billings			185,319				194,689				193,715				197,426				174,594
	Gross Billings - Services			1,032,108				1,024,580				992,049				954,546				986,623
	Gross Billings - Goods			692,561				527,421				536,964				512,988				720,369
	Total Gross Billings		$	1,724,669			$	1,552,001			$	1,529,013			$	1,467,534			$	1,706,992
	Year-over-year growth			8		%		2		%		2		%		(2	)	%		(1	)	%
	Year-over-year growth, excluding FX			13		%		10		%		10		%		6		%		4		%
	% Third Party and Other			70		%		75		%		74		%		74		%		66		%
	% Direct			30		%		25		%		26		%		26		%		34		%
Gross Billings TTM			$	6,237,832			$	6,269,127			$	6,296,030			$	6,273,217			$	6,255,540
	Year-over-year growth			8		%		7		%		6		%		3		%		—		%
Revenue:
	Local Revenue		$	298,782			$	293,681			$	276,503			$	260,939			$	279,655
	Travel Revenue			39,243				41,201				41,421				41,090				35,169
	Revenue - Services			338,025				334,882				317,924				302,029				314,824
	Revenue - Goods			545,203				415,474				420,471				411,566				602,346
Total Revenue			$	883,228			$	750,356			$	738,395			$	713,595			$	917,170
	Year-over-year growth			15		%		3		%		3		%		—		%		4		%
	Year-over-year growth, excluding FX			19		%		10		%		11		%		7		%		9		%
	% Third Party and Other			42		%		48		%		46		%		46		%		38		%
	% Direct			58		%		52		%		54		%		54		%		62		%
Revenue TTM			$	3,042,123			$	3,064,064			$	3,086,248			$	3,085,574			$	3,119,516
	Year-over-year growth			18		%		13		%		10		%		5		%		3		%
Gross Profit:
	Local Gross Profit		$	264,907			$	258,293			$	242,411			$	227,654			$	247,600
	% of Consolidated Local Gross Billings			31.3		%		31.1		%		30.4		%		30.1		%		30.5		%
	Travel Gross Profit			33,228				33,097				35,336				34,826				29,979
	% of Consolidated Travel Gross Billings			17.9		%		17.0		%		18.2		%		17.6		%		17.2		%
	Gross Profit - Services			298,135				291,390				277,747				262,480				277,579
	% of Consolidated Services Gross Billings			28.9		%		28.4		%		28.0		%		27.5		%		28.1		%
	Gross Profit - Goods			79,974				56,016				59,260				66,432				94,161
	% of Consolidated Goods Gross Billings			11.5		%		10.6		%		11.0		%		13.0		%		13.1		%
	Total Gross Profit		$	378,109			$	347,406			$	337,007			$	328,912			$	371,740
	Year-over-year growth			—		%		(5	)	%		(8	)	%		(7	)	%		(2	)	%
	% Third Party and Other			84		%		89		%		87		%		85		%		81		%
	% Direct			16		%		11		%		13		%		15		%		19		%
	% of Total Consolidated Gross Billings			21.9		%		22.4		%		22.0		%		22.4		%		21.8		%
Marketing			$	59,812			$	52,533			$	57,007			$	61,587			$	83,208
Selling, general and administrative			$	285,466			$	289,847			$	288,721			$	326,248			$	287,976
Adjusted EBITDA			$	92,914			$	72,370			$	61,118			$	56,334			$	67,010
	% of Total Consolidated Gross Billings			5.4		%		4.7		%		4.0		%		3.8		%		3.9		%
	% of Total Consolidated Revenue			10.5		%		9.6		%		8.3		%		7.9		%		7.3		%

Free cash flow is a non-GAAP financial measure. The following is a reconciliation of free cash flow to the most comparable U.S. GAAP financial measure, "Net cash provided by (used in) operating activities from continuing operations."

			Q4 2014				Q1 2015				Q2 2015				Q3 2015				Q4 2015
Net cash provided by (used in) operating activities from continuing operations			$	273,272			$	40,711			$	9,995			$	(7,612	)		$	249,024
Purchases of property and equipment and capitalized software from continuing operations				(20,117	)			(18,294	)			(22,452	)			(27,735	)			(15,507	)
Free cash flow			$	253,155			$	22,417			$	(12,457	)		$	(35,347	)		$	233,517
Net cash provided by (used in) operating activities from continuing operations (TTM)			$	252,497			$	307,782			$	346,302			$	316,366			$	292,118
Purchases of property and equipment and capitalized software from continuing operations (TTM)				(83,560	)			(85,761	)			(79,501	)			(88,598	)			(83,988	)
Free cash flow (TTM)			$	168,937			$	222,021			$	266,801			$	227,768			$	208,130
Net cash provided by (used in) investing activities from continuing operations			$	(35,175	)		$	(19,443	)		$	(28,541	)		$	(98,028	)		$	(31,238	)
Net cash provided by (used in) financing activities			$	(21,088	)		$	(32,942	)		$	(138,227	)		$	(14,821	)		$	(322,166	)
Net cash provided by (used in) investing activities from continuing operations (TTM)			$	(152,818	)		$	(105,821	)		$	(102,205	)		$	(181,187	)		$	(177,250	)
Net cash provided by (used in) financing activities (TTM)			$	(194,156	)		$	(185,606	)		$	(209,080	)		$	(207,078	)		$	(508,156	)
Other Metrics:
Active Customers (6)
	North America			24.1				24.6				24.9				25.2				25.9
	EMEA			15.2				15.3				15.5				15.4				15.4
	Rest of World			8.1				8.2				8.2				8.0				7.6
	Total Active Customers			47.4				48.1				48.6				48.6				48.9
TTM Gross Billings / Average Active Customer (7)
North America			$	147			$	147			$	148			$	148			$	149
EMEA				139				134				130				123				117
Rest of World				105				101				98				99				96
Consolidated				137				135				133				132				130

Global headcount as of December 31, 2015 and 2014 was as follows:
			Q4 2014		Q4 2015
	Sales (8)		4,493		3,992
	% North America		31 %		34 %
	% EMEA		42 %		41 %
	% Rest of World		27 %		25 %
	Other		6,256		5,880
	Total Headcount		10,749		9,872

(1)		Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.
(2)		Local represents deals with local and national merchants and through local events. Other revenue transactions include advertising, payment processing and commission revenue.
(3)		Includes third party revenue, direct revenue and other revenue. Third party revenue is related to sales for which the Company acts as a marketing agent for the merchant. This revenue is recorded on a net basis. Direct revenue is primarily related to the sale of merchandise for which the Company is the merchant of record. These revenues are accounted for on a gross basis, with the cost of inventory included in cost of revenue. Other revenue primarily consists of commission revenue, payment processing revenue and advertising revenue.
(4)		Represents third party revenue, direct revenue and other revenue reduced by cost of revenue.
(5)		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 in the prior year periods.
(6)		Reflects the total number of unique user accounts who have purchased a voucher or product from us during the trailing twelve months.
(7)		Reflects the total gross billings generated in the trailing twelve months per average active customer over that period.
(8)		Includes merchant sales representatives, as well as sales support from continuing operations.
(9)		Financial information and other metrics have been retrospectively adjusted to exclude Ticket Monster, which has been classified as discontinued operations.
(10)		The definition, methodology and appropriateness of each of our supplemental metrics is reviewed periodically. As a result, metrics are subject to removal and/or change.

 

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Groupon, Inc.
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Bill Roberts, 312-459-5191