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What changed in Groupon, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Groupon, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+268 added−282 removedSource: 10-K (2025-03-11) vs 10-K (2024-03-15)

Top changes in Groupon, Inc.'s 2024 10-K

268 paragraphs added · 282 removed · 215 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

36 edited+16 added−18 removed23 unchanged
Biggest changeOur Categories Local . Our Local category includes experiences and services from local and national merchants, and other revenue sources that are primarily generated through our relationships with local and national merchants. Our local inventory includes, things to do, beauty and wellness and dining, as well as other types of experiences and services. Goods .
Biggest changeOur local inventory includes, things to do, beauty and wellness and dining, as well as other types of experiences and services. Goods . In our Goods category, we earn revenue from transactions in which third-party merchants sell products to customers through our marketplaces.
For instance, non-compliance with the GDPR could result in proceedings against us by governmental entities or 8 others and fines up to the greater of €20 million or 4% of annual global revenue, and non-compliance with CPRA could result in fines of up to $7,500 per violation in addition to providing consumers with a private right of action.
For instance, non-compliance with the GDPR could result in proceedings against us by governmental entities or others and fines up to the greater of €20 million or 4% of annual global revenue, and non-compliance with CPRA could result in fines of up to $7,500 per violation in addition to providing consumers with a private right of action.
Congress, various state legislative bodies and foreign governments that could affect us, and our global operations may be constrained by regulatory regimes and laws in Europe and other jurisdictions outside the United States that may be more restrictive and adversely impact our business.
Congress, various state legislative bodies and foreign governments that could affect us, and our global operations may be constrained 10 by regulatory regimes and laws in Europe and other jurisdictions outside the United States that may be more restrictive and adversely impact our business.
We may be unable to prevent third parties from offering and selling unlawful or infringing goods or goods of disputed authenticity, and we may be subject to allegations of civil or criminal liability for unlawful activities carried out by third parties through our website.
We may be unable to prevent third parties from offering and selling unlawful or infringing goods or goods of disputed authenticity, and we may be subject to allegations of civil or criminal liability for unlawful activities 11 carried out by third parties through our website.
Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are also available free of charge through our website (www.groupon.com), as soon as reasonably practicable after electronically filing with or otherwise furnishing such information to the SEC, and are available in print to any stockholder who requests them.
Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are also available free of charge through our website (www.groupon.com), as soon as reasonably practicable after electronically filing with or otherwise furnishing such information to the SEC, and are available in print to any stockholder who requests them.
See Item 8, Note 18, Segment Information, for additional information. Revenue is earned through transactions during which we generate commissions by selling goods or services on behalf of third-party merchants. Revenue also includes commissions we earn when customers make purchases with retailers using digital coupons accessed through our digital properties.
See Item 8, Note 18, Segment and Geographical Information, for additional information. Revenue is earned through transactions during which we generate commissions by selling goods or services on behalf of third-party merchants. Revenue also includes commissions we earn when customers make purchases with retailers using digital coupons accessed through our digital properties.
Various U.S. laws and regulations, such as the Bank Secrecy Act of 1970 (the "Bank Secrecy Act"), the Dodd-Frank Wall Street Reform and Consumer Protection Act, the USA PATRIOT Act and the CARD Act impose certain anti-money laundering requirements on companies that are financial institutions or that provide financial products and services.
Various U.S. laws and regulations, such as the Bank Secrecy Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the USA PATRIOT Act and the CARD Act impose certain anti-money laundering requirements on companies that are financial institutions or that provide financial products and services.
Information contained on our website and press site is not a part of this Annual Report on Form 10-K. 10
Information contained on our website and press site is not a part of this Annual Report on Form 10-K. 12
Our Strategy Our strategy is to be the trusted marketplace where customers go to buy local services and experiences. We plan to grow our revenue by building long-term relationships with local merchants to strengthen our inventory selection and by enhancing the customer experience through inventory curation and improved convenience in order to drive customer demand and purchase frequency.
Our Strategy Our strategy is to be the trusted marketplace where customers go to buy local services and experiences. We plan to grow our revenue by building long-term relationships with local merchants to strengthen our online selection and by enhancing the customer reach through experience curation and improved convenience in order to drive customer demand and purchase frequency.
Prior to his time at Alza.cz, he spent 15 years at Nutricia, a Danone brand, in a variety of financial and commercial roles. In conjunction with his appointment to Groupon Chief Financial Officer, he stepped down from day-to-day responsibilities at PFC. Available Information We electronically file reports with the SEC.
Prior to his time at Alza.cz, he spent 15 years at Nutricia, a Danone brand, in a variety of financial and commercial roles. In conjunction with his appointment to Groupon CFO, he stepped down from day-to-day responsibilities at PFC. Available Information We electronically file reports with the SEC.
As a company in a relatively new and rapidly innovating industry, we are exposed to the risk that many of those laws may evolve or be interpreted by regulators or in the courts in ways that could materially affect our business.
As a company in a rapidly innovating industry, we are exposed to the risk that many of those laws may evolve or be interpreted by regulators or in the courts in ways that could materially affect our business.
Prior to NBH, he co-founded and operated multiple e-commerce projects, including 9 ePojisteni.cz, an insurance technology company, where he served as CEO and a director, from 2009 until February 2019. In conjunction with his appointment as Groupon CEO, he stepped down from his day-to-day responsibilities at PFC. Jiri Ponrt was appointed as our Chief Financial Officer in April 2023.
Prior to NBH, he co-founded and operated multiple e-commerce projects, including ePojisteni.cz, an insurance technology company, where he served as CEO and a director, from 2009 until February 2019. In conjunction with his appointment as Groupon CEO, he stepped down from his day-to-day responsibilities at PFC. Jiri Ponrt was appointed as our CFO in April 2023.
Prior to joining PFC, he served as founder and CEO of NetBrokers Holding (“NBH”), which became the largest insurance and finance marketplace in the Czech Republic and Slovakia, from 2014 to December 2018, when it was sold to German media company, Bauer Media Group.
Prior to joining PFC, he served as founder and CEO of NBH, which became the largest insurance and finance marketplace in the Czech Republic and Slovakia, from 2014 to December 2018, when it was sold to German media company, Bauer Media Group.
The General Data Protection Regulation ("GDPR"), which was adopted by the European Union and became effective in May 2018, and the California Privacy Rights Act (the "CPRA"), which expands on and effectively replaces the California Consumer Privacy Act (the "CCPA") and became effective January 1, 2023, requires companies to satisfy specific requirements regarding the handling of personal and sensitive data, including its collection, use, protection and the ability of persons whose data is stored to, among other things, access and/or delete such data about themselves.
The GDPR, which was adopted by the European Union and became effective in May 2018, and the CPRA, which expands on and effectively replaces the CCPA and became effective January 1, 2023, requires companies to satisfy specific requirements regarding the handling of personal and sensitive data, including its collection, use, protection and the ability of persons whose data is stored to, among other things, access and/or delete such data about themselves.
In addition, certain foreign jurisdictions have laws that govern disclosure and certain product terms and conditions, including restrictions on expiration dates and fees, that may apply to Groupon vouchers. There are also a number of legislative proposals pending before the U.S.
Groupon vouchers may be included within the definition of gift cards under many laws. In addition, certain foreign jurisdictions have laws that govern disclosure and certain product terms and conditions, including restrictions on expiration dates and fees, that may apply to Groupon vouchers. There are also a number of legislative proposals pending before the U.S.
We use a variety of marketing channels to make customers aware of our offerings, including search engines, email and push notifications, affiliate channels, social and display advertising and offline marketing. Search engines. Customers can access our offerings indirectly through third-party search engines.
We use a variety of marketing channels to make customers aware of our offerings, including search engines, email and push notifications, affiliate channels, social and display advertising and offline marketing. 7 Search engines. Customers can access our offerings indirectly through third-party search engines. We use SEO and SEM to increase the visibility of our offerings in web search results.
Additionally, in the third quarter of 2023, we migrated our Payment Card Information data to a third party provider so that these details are no longer stored within Groupon's cloud environment. We employ security practices and modern tools to try to recognize intrusions to our technology infrastructure.
Additionally, in the third quarter of 2023, we migrated our Payment Card Information data to a third-party provider so that these details are no longer stored within Groupon's cloud environment.
We face competition on both sides of our marketplace. 7 We compete with other marketplaces, and some of our competitors have longer operating histories, significantly greater financial, technical, marketing and other resources.
The quality and stability of both our customers and merchants are key to our business model. We face competition on both sides of our marketplace. We compete with other marketplaces, and some of our competitors have longer operating histories, significantly greater financial, technical, marketing and other resources.
Our senior leadership, guided by our Board of Directors (the "Board"), oversees this mission by crafting and implementing our human capital strategy. This involves recruiting, developing and retaining the best minds to fuel our operations and drive our strategic goals and shaping competitive compensation and benefits packages.
Human Capital Management Attracting and securing top-notch talent from around the world is the cornerstone of our future. Our senior leadership, guided by our Board, oversees this mission by crafting and implementing our human capital strategy. This involves recruiting, developing, and retaining the best minds to fuel our operations, drive our strategic goals, and shape competitive compensation and benefits packages.
He joined Groupon from Pale Fire Capital SE ("PFC"), a Groupon shareholder and a private equity investment group that invests in e-commerce companies both in Europe and worldwide. He co-founded PFC in 2015 and serves as Chairman and as a partner.
He has served as a member of our Board since June 2022. He joined Groupon from PFC, a Groupon shareholder and a private equity investment group that invests in e-commerce companies both in Europe and worldwide. He co-founded PFC in 2015 and serves as Chairman and as a partner.
For the year ended December 31, 2023, approximately 80% of our global transactions were completed on mobile devices. We use a variety of marketing channels to direct customers to the offerings available through these marketplaces, as described in the Marketing section below. Marketing We use marketing to acquire and retain customers and promote awareness of our marketplaces and brand.
We use a variety of marketing channels to direct customers to the offerings available through these marketplaces, as described in the Marketing section below. Marketing We use marketing to acquire and retain customers and promote awareness of our marketplaces and brand.
Groupon and its related entities own a number of trademarks and service marks registered or pending in the United States and internationally. In addition, we own a number of issued patents and pending patent applications in the United States and internationally and own and have applied for copyright registrations in the United States.
Groupon and its related entities own a number of trademarks and service marks registered or pending in the United States and internationally.
Other teams, such as engineers, product designers, marketers and editors, power the platform and curate the experiences. Within our human capital management strategy, there are three core pillars: Our People & Culture, Diversity, Equity & Inclusion ("DEI") and Compensation & Benefits. Our People & Culture.
Other teams, such as engineers, product designers, marketers and editors, power the platform to curate the experiences. Human Capital Strategy Pillars Our human capital strategy is anchored in three core pillars: People & Culture, Diversity, Equity & Inclusion, and Compensation & Benefits. People & Culture At Groupon we empower a diverse, collaborative global team.
We engage independent third-party Internet security firms to regularly test the security of our websites and identify vulnerabilities. In financial transactions with customers conducted on our websites and mobile applications, we use data encryption protocols to secure information while in transit. See Risk Factors and Cybersecurity for additional information relating to potential cyber threats.
In financial transactions with customers conducted on our websites and mobile applications, we use data encryption protocols 9 to secure information while in transit. See Item 1A. Risk Factors and Item 1C. Cybersecurity for additional information relating to potential cyber threats. Competition Our customers and merchants are at the center of our two-sided marketplace.
However, for some of our hotel offerings, customers make room reservations directly through our websites and mobile applications. Traffic Channels and Platforms Our customers access our online local commerce marketplaces through our mobile applications and our websites. Our applications and mobile websites enable consumers to browse, purchase, manage and redeem deals on their mobile devices.
Traffic Channels and Platforms Our customers access our online local commerce marketplaces through our mobile applications and our websites. Our applications and mobile websites enable consumers to browse, purchase, manage and redeem deals on their mobile devices. For the year ended December 31, 2024, approximately 80% of our global transactions were completed on mobile devices.
Information About Our Executive Officers The following table sets forth information about our executive officers (as of the date of this filing): Name Age Position Dusan Senkypl 48 Interim Chief Executive Officer Jiri Ponrt 50 Chief Financial Officer Dusan Senkypl was appointed as our Interim Chief Executive Officer in March 2023 and has served as a member of our Board since June 2022.
Information About Our Executive Officers The following table sets forth information about our executive officers (as of the date of this filing): Name Age Position Dusan Senkypl 49 CEO Jiri Ponrt 51 CFO Dusan Senkypl was appointed as our CEO in May 2024, he previously served as our Interim CEO beginning in March 2023.
As of December 31, 2023, we had employees in the following geographies and roles: Sales Corporate, Operational and Customer Support Total Employees North America 218 175 393 International 437 1,383 1,820 Total 655 1,558 2,213 Our sales representatives create partnerships, while our support staff ensures smooth transactions.
Our Workforce As of December 31, 2024, we had employees across various geographies and roles: Sales Corporate, Operational and Customer Support Total Employees North America 295 161 456 International 381 1,242 1,623 Total 676 1,403 2,079 Our sales representatives create partnerships, while our support staff ensures smooth transactions.
A customer who interacts with these communications is directed to our website or mobile application to learn more about the deal and to make a purchase. 5 Affiliate channels. We have an affiliate program that uses third parties to promote our offerings online.
Email and mobile messaging. We communicate offerings through email, push notifications and SMS to our customers based on their locations and personal preferences. A customer who interacts with these communications is directed to our website or mobile application to learn more about the deal and to make a purchase. Affiliate channels.
Our websites and mobile applications enable consumers to share our offerings with their personal social networks. We also promote our offerings via display advertising across various content publishers. Human Capital Management Attracting and securing top-notch talent from around the world is the cornerstone of our future.
We promote and publish our content and offerings through various social networks and adapt our notifications to the particular format of each of these social networking platforms. Our websites and mobile applications enable consumers to share our offerings with their personal social networks. We also promote our offerings via display advertising across various content publishers.
Our ongoing efforts to comply with these laws and regulations and other relevant privacy and data protection laws and regulations, have required updates to certain business practices and systems. Non-compliance with any privacy and data protection laws and regulations could result in significant monetary fines.
Non-compliance with any privacy and data protection laws and regulations could result in significant monetary fines.
The Virginia Consumer Data Protection Act (the "CDPA"), effective as of January 1, 2023, and the Colorado Privacy Act (the "CPA"), effective as of July 1, 2023, provide new data privacy rights to their respective residents.
The CDPA, effective as of January 1, 2023, and the CPA, effective as of July 1, 2023, provide new data privacy rights to their respective residents. Our ongoing efforts to comply with these laws and regulations and other relevant privacy and data protection laws and regulations, have required updates to certain business practices and systems.
Affiliates earn commissions when customers access our offerings through links on their websites and make purchases on our platform. Social and display. We promote and publish our content and offerings through various social networks and adapt our notifications to the particular format of each of these social networking platforms.
We have an affiliate program that uses third parties to promote our offerings online. Affiliates earn commissions when customers access our offerings through links on their websites and make purchases on our platform. Social and display.
Through our Travel category, we feature travel experiences at both discounted and market rates, including hotels, airfare and package deals covering both domestic and international travel. For many of our travel experiences, the customer must contact the merchant directly to make a travel reservation after purchasing a travel voucher from us.
For many of our travel experiences, the customer must contact the merchant directly to make a travel reservation after purchasing a travel voucher from us. However, for some of our hotel offerings, customers make room reservations directly through our websites and mobile applications.
Compensation and Benefits. To bring in and keep the best, we offer a compelling combination of competitive compensation and comprehensive benefits. This includes standard health, dental, vision, life, and disability insurance, along with a 401(k) plan with company matching for our US employees.
Compensation & Benefits To attract and retain top talent, we offer competitive compensation and comprehensive benefits. These include health, dental, vision, life, and disability insurance, along with a 401(k) plan with company matching for U.S. employees. Our Cultural Foundation In early 2024, we revamped our values to align with the culture and behaviors needed to drive Groupon’s transformation.
In our Goods category, we earn revenue from transactions in which third-party merchants sell products to customers through our marketplaces. Our Goods category includes merchandise across multiple product lines, such as electronics, sporting goods, jewelry, toys, household items and apparel. Travel .
Our Goods category includes merchandise across multiple product lines, such as electronics, sporting goods, jewelry, toys, household items and apparel. Travel . Through our Travel category, we feature travel experiences at both discounted and market rates, including hotels, airfare and package deals covering both domestic and international travel.
The Credit Card Accountability Responsibility and Disclosure Act of 2009 (the "CARD Act"), as well as the laws of most states, contain provisions governing gift cards, gift certificates, stored value or pre-paid cards or coupons (collectively, "gift cards"). Groupon vouchers may be included within the definition of gift cards under many laws.
These regulations, along with evolving international ESG frameworks, may require us to enhance our sustainability disclosures, implement additional compliance measures, and allocate additional resources to ESG reporting. The CARD Act, as well as the laws of most states, contain provisions governing gift cards, gift certificates, stored value or pre-paid cards or coupons (collectively, "gift cards").
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We use search engine optimization ("SEO") and search engine marketing ("SEM") to increase the visibility of our offerings in web search results. Email and mobile messaging. We communicate offerings through email, push notifications and short messaging services ("SMS") to our customers based on their locations and personal preferences.
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We are investing significant resources in making our platform more efficient, stable and agile. By improving our technology, our customer base can enjoy a modernized experience along with seamless execution of new product innovation, improved customer experience and customer satisfaction.
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At Groupon, we believe experiences make life richer and that philosophy extends to our work culture as well. We thrive on the strength and diversity of our global teams, where resilient, energized and collaborative individuals bring their unique perspectives to the table.
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Our platform migrations are strategic investments in our ability to innovate faster, serve merchants better, and create more engaging experiences for our customers. Our Categories Local . Our Local category includes experiences and services from local and national merchants, and other revenue sources that are primarily generated through our relationships with local and national merchants.
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Our mission is to foster a culture that ignites innovation, empowers smart decision-making and celebrates every success along the way. In 2023, we focused on gathering feedback from peers, colleagues and employees so managers and leaders can actively identify areas for improvement and implement tailored action plans.
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In 2023 and 2024, we gathered employee feedback through initiatives such as the “Transformation Truths” engagement survey. This anonymous company-wide survey provided valuable insights into ongoing organizational changes such as the status of our transformation efforts. We uphold ethical standards through bi-annual training, including the Global Code of Conduct, Anti-Corruption, and Respectful Workplace courses, reinforcing a safe, ethical workplace.
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We started with a Transformation Truth survey that collected anonymous responses company-wide and provided employees the opportunity to address ongoing transformations within the organization. We place a high value on collecting and acting upon employee feedback as it provides valuable insights into our team’s overall health.
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Our career development offerings include diverse training programs such as Unconscious Bias training and Respect in the Workplace training for managers. Additionally, our Internal Talent Mobility process supports cross-functional growth, while our Employee Referral Program incentivizes hiring top talent globally. 8 Diversity, Equity & Inclusion In 2024, we have focused on establishing strong organizational foundations.
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We believe maintaining the highest ethical standards is not only a policy, it's a shared responsibility. Every team member plays a crucial role in upholding our commitment to business ethics, safety and integrity.
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We remain committed to fostering a high-performance culture by promoting diversity in thought, experience, and background. Given our role in connecting people and communities, we recognize the importance of maintaining a workforce that reflects the diversity of our customer base.
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To cultivate this awareness, we mandate bi-annual completion of foundational training courses like our Global Code of Conduct, Anti-Corruption, Respectful and Harassment Free Workplace and unconscious bias training. We also offer a Global Code of Conduct Recertification Quiz in alternate years to ensure constant reinforcement.
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During the year, we introduced several initiatives aimed at enhancing workplace support and employee engagement in alignment with its core values: • Employee Resource Groups (ERGs): We have strengthened ERGs to give our team members platforms for connection, advocacy, and celebration of shared identities and interests. We now have functioning ERGs for BlacksandAllies@Groupon, LatinosandAllies@Groupon, Wellness@Groupon, PrideandAllies@Groupon, WomenandAllies@Groupon.
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To address any concerns regarding potential policy violations, we have established a secure and confidential internal channel called the Groupon Ethics Reporting Service. To support the career development of our team members, we offer a diverse range of training and development programs that cater to various needs.
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Together they have updated our recently launched Diversity, Equity and Inclusion library to ensure teams have access to online resources, run workshops, developed educational content and been a sounding board for internal initiatives. • Internal Workshops: Training and education have been important in fostering awareness and growth, with workshops that challenge biases and drive equity in decision-making.
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From building a strong foundation in ethics and workplace culture through unconscious bias training for all employees to Respect in the Workplace training for managers. We also initiated Talent Acquisition Spotlight Newsletters that provided teams the update on open roles along with changes and improvements to the recruitment process.
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This year our workshops focused on Menopause and Fertility in the workplace. • Policy Enhancements: We have introduced progressive policies, including support for menopause with our new company Charter, and our Fertility Policy, ensuring we continue to address diverse needs and create an inclusive workplace for all. • External Campaigns: Beyond our walls, we have supported diverse communities through marketing campaigns that reflect our commitment to inclusivity and representation, this year focusing on Black History Month, Martin Luther King Day, Cinco de Mayo and Pride Month.
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Our Internal Talent Mobility process fosters cross-team collaborations and growth opportunities, allowing people to explore their full potential within Groupon. Additionally, we also offer an Employee Referral Program with bonuses for eligible hires to help us hire great talent across the globe. 6 Diversity, Equity and Inclusion .
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These values—Ownership and Accountability, High Performance, Transparency, Innovation, Customer Focus, and Respect, Integrity, and Inclusion—form the foundation of our culture. Together, they foster a resilient workforce prepared to navigate challenges and seize opportunities, driving us toward our vision of becoming the go-to platform for experiences.
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Cultivating a diverse workforce and fostering an inclusive workplace isn't only about doing the right thing; it's about building a brighter future for Groupon. Our strength lies in embracing diverse perspectives and experiences, which fuels innovation, creativity and problem-solving.
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In the third quarter of 2024, we successfully migrated our cloud systems in North America to allow us to run in a further stream-lined multi-cloud infrastructure, further reducing our technological footprint and attack and threat vectors. Our platform migrations are strategic investments in our ability to innovate faster, serve merchants better, and create more engaging experiences for our customers.
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By fostering an inclusive environment where everyone feels valued and respected, we unlock the full potential of our talent, allowing us to navigate challenges and thrive in a competitive marketplace.
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We have also made significant improvements to our search functionality. Our enhanced search now provides real-time query suggestions, corrects spelling errors, and supports synonyms for improved accuracy. It can recognize destinations and brands, automatically applying relevant filters to refine search results.
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In 2023, we focused on: • Creating opportunities for employees to engage in cultural competency workshops and conversations • Creating new programming to build and champion our diverse merchant base • Engaging our employees by launching a monthly DEI newsletter. This is emailed to all employees and details any DEI updates, Employee Resource Group activities, other resources and more.
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Additionally, it suggests related queries and categorizes results into experiences, travel deals, and merchants, optimizing relevance based on precise location for a more intuitive user experience. We employ security practices and modern tools to try to recognize intrusions to our technology infrastructure. We engage independent third-party Internet security firms to regularly test the security of our websites and identify vulnerabilities.
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This year we expanded our Annual Bonus Plan to include additional Global Grades in the plan to increase coverage of employees who were not eligible previously. We’re also deeply invested in our people's well-being and why we've significantly expanded our wellness programs to prevent burnout and keep our global teams healthy and thriving.
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In addition to these regulatory areas mentioned, we are also subject to increasing legal and regulatory requirements related to ESG matters. Emerging ESG regulations, particularly in the European Union, the United Kingdom, and the United States, may require us to enhance our sustainability reporting and disclosures.
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We initiated a number of wellness programs this year on top of the existing access to mental health support and services and Global Wellness Week, an entire week dedicated to personal wellness programming aimed at boosting all of our physical, nutritional and mental well-being. We also continued our Groupon Step-a-Thon challenge.
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For example, the CSRD and the SFDR impose enhanced sustainability disclosure obligations on companies operating in the European Union. Additionally, we are subject to emerging ESG regulations in California and New York that may impact our reporting and compliance obligations.
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It was designed to build healthy habits and increase activity levels of our employees. We're cultivating a thriving performance-driven culture and a team committed to our transformation. In line with this we re-vamped our values in 2023 to ensure that they were supporting the culture and behaviors we need to succeed.
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The Climate Corporate Data Accountability Act (SB 253) and the Climate-Related Financial Risk Disclosure Act (SB 261) impose climate-related disclosure requirements on companies operating in California, including mandatory reporting of greenhouse gas emissions and climate-related financial risks.
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Our new values are: • Ownership and accountability • High performing • Transparent • Innovative • Customer focused • Respect, integrity and inclusion Together they form the foundations of a culture that embraces speed and agility, relies on data-driven decisions based on measurable results and fosters a culture of ownership and accountability.
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Additionally, if enacted in New York, SB 3697 would require entities operating in New York whose revenue exceeded $500 million in the prior fiscal year to release reports that would need to include disclosures aligned with the Task Force on Climate-related Financial Disclosures framework or another equivalent reporting requirement.
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We believe this fosters a resilient workforce equipped to weather challenges and capitalize on opportunities. Our focus on performance isn't only about numbers; it's about attracting and retaining top talent who thrive in a fast-paced, results-oriented environment. Ultimately, we see this cultural shift as the engine that propels us towards our ambitious vision of becoming the go-to platform for experiences.
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Competition Our customers and merchants are at the center of our two-sided marketplace. The quality and stability of both our customers and merchants are key to our business model.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

83 edited+9 added−18 removed234 unchanged
Biggest changeWe believe that our ability to compete successfully depends upon many factors both within and beyond our control, including the following: • the continued consequences of the macroeconomic environment, including but not limited to, inflationary pressures, higher labor costs, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior; • the size, composition and retention of our customer and merchant bases; • density and quality of our inventory; • delivery of a modern user experience for customers and modern experience and tools for merchants; • mobile penetration; • understanding local business trends; • our ability to structure deals to generate positive return on investment for merchants; • the timing and market acceptance of deals we offer, including the developments and enhancements to those deals offered by us or our competitors; • our customer and merchant service and support efforts; 16 • our ability to maintain our current relationships with or attract new vendors, suppliers and service providers on agreeable terms; • our ability to maintain contracts that are critical to our operations; • selling and marketing efforts; • ease of use, performance, price and reliability of services offered either by us or our competitors; • our ability to improve customer purchase frequency and customer lifetime value; • our ability to drive traffic to our marketplace; • the number, quality and reliability of the digital coupons that can be accessed through our platform; • the quality and performance of our merchants; • our ability to cost-effectively manage our operations and to complete the multi-phased cost savings plan and achieve the anticipated benefits from the plan; and • our reputation and brand strength relative to our competitors.
Biggest changeWe believe that our ability to compete successfully depends upon many factors both within and beyond our control, including the following: • the continued consequences of the macroeconomic environment, including but not limited to, inflationary pressures, higher labor costs, tariff policy, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior; • the size, composition and retention of our customer and merchant bases; • density and quality of our inventory; • delivery of a modern user experience for customers and modern experience and tools for merchants; • mobile penetration; • our ability to drive traffic to our marketplace; • the quality and performance of our merchants; • our ability to maintain our current relationships with or attract new vendors, suppliers and service providers on agreeable terms; • understanding local business trends; • our ability to structure deals to generate positive return on investment for merchants; 18 • ease of use, performance, price and reliability of services offered either by us or our competitors; • our ability to improve customer purchase frequency and customer lifetime value; • the timing and market acceptance of deals we offer, including the developments and enhancements to those deals offered by us or our competitors; • our customer and merchant service and support efforts; • our ability to maintain contracts that are critical to our operations; • selling and marketing efforts; • the number, quality and reliability of the digital coupons that can be accessed through our platform; • our ability to cost-effectively manage our operations and to complete the multi-phased cost savings plan and achieve the anticipated benefits from the plan; and • our reputation and brand strength relative to our competitors.
We believe that our ability to achieve and maintain revenue growth and profitability will depend, among other factors, on our ability to: • respond to macroeconomic challenges, including but not limited to, inflationary pressures, higher labor costs, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior and the ability to optimize our supply to take into account consumer preferences at a particular point in time; • acquire new customers, retain existing customers, and increase customer purchase frequency; • attract and retain high-quality merchants; • maintain our current relationships with or attract new vendors, suppliers and service providers on agreeable terms; • maintain contracts that are critical to our operations; • attract and retain key employees, including attracting and retaining talent with an appropriate level of skill and experience, including product and technology expertise, cybersecurity expertise, GAAP knowledge and experience to create the proper control environment for effective internal control over financial reporting; 13 • effectively address and respond to challenges in international markets; • increase the variety, quality, density and relevance of supply, including through third party business partners and technology integrations; • deliver a marketplace experience on our website and mobile applications that meets the needs of our customers and merchants; • increase booking capabilities; • increase the awareness of, and evolve, our brand to a local experiences marketplace; • continue to reduce costs and maintain cost discipline to benefit from our reduced cost structure; • maintain the performance of our Goods category following transition to a third party marketplace model; • successfully achieve the anticipated benefits of business combinations or acquisitions, strategic investments and divestitures; • complete the multi-phased cost savings plan and achieve the anticipated benefits from the plan; • provide a superior customer service experience for our customers; • avoid interruptions to our services, including as a result of attempted or successful cybersecurity attacks or breaches; • respond to continuous changes in consumer and merchant use of technology; • optimize and diversify our traffic channels; • react to challenges from existing and new competitors; • respond to periodic changes in supply and demand; and • address challenges from existing and new laws and regulations.
We believe that our ability to achieve and maintain revenue growth and profitability will depend, among other factors, on our ability to: • respond to macroeconomic challenges, including but not limited to, inflationary pressures, higher labor costs, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior and the ability to optimize our supply to take into account consumer preferences at a particular point in time; • acquire new customers, retain existing customers, and increase customer purchase frequency; • attract and retain high-quality merchants; • maintain our current relationships with or attract new vendors, suppliers and service providers on agreeable terms; • maintain contracts that are critical to our operations; • attract and retain key employees, including attracting and retaining talent with an appropriate level of skill and experience, including product and technology expertise, cybersecurity expertise, GAAP knowledge and experience to create the proper control environment for effective internal control over financial reporting; 15 • effectively address and respond to challenges in international markets; • increase the variety, quality, density and relevance of supply, including through third party business partners and technology integrations; • deliver a marketplace experience on our website and mobile applications that meets the needs of our customers and merchants; • increase booking capabilities; • increase the awareness of, and evolve, our brand to a local experiences marketplace; • continue to reduce costs and maintain cost discipline to benefit from our reduced cost structure; • maintain the performance of our Goods category following transition to a third party marketplace model; • successfully achieve the anticipated benefits of business combinations or acquisitions, strategic investments and divestitures; • complete the multi-phased cost savings plan and achieve the anticipated benefits from the plan; • provide a superior customer service experience for our customers; • avoid interruptions to our services, including as a result of attempted or successful cybersecurity attacks or breaches; • respond to continuous changes in consumer and merchant use of technology; • optimize and diversify our traffic channels; • react to challenges from existing and new competitors; • respond to periodic changes in supply and demand; and • address challenges from existing and new laws and regulations.
If we are found to 28 have misclassified employees, including as independent contractors, agency workers or non-exempt employees as exempt, we could face penalties and have additional exposure under U.S. federal and state tax, workers’ compensation, unemployment benefits, labor, employment and tort laws, as well as similar international laws, including for prior periods, as well as potential liability for employee overtime and benefits and tax withholdings.
If we are found to have misclassified employees, including as independent contractors, agency workers or non-exempt employees as exempt, we could face penalties and have additional exposure under U.S. federal and state tax, workers’ compensation, unemployment benefits, labor, employment and tort laws, as well as similar international laws, including for prior periods, as well as potential liability for employee overtime and benefits and tax withholdings.
In addition, we may not be able to obtain reimbursement from merchants for refunds that we issue, which could have an adverse effect on our financial results. 17 We primarily use redemption payment terms with our merchants globally, and we are required under the applicable revenue recognition standard to estimate variable consideration from unredeemed vouchers.
In addition, we may not be able to obtain reimbursement from merchants for refunds that we issue, which could have an adverse effect on our financial results. We primarily use redemption payment terms with our merchants globally, and we are required under the applicable revenue recognition standard to estimate variable consideration from unredeemed vouchers.
In addition, upon the occurrence of a fundamental change (as defined in the Indenture) prior to the maturity date, holders may require us to repurchase all or a portion of the 2026 Notes for cash at a price equal to 100% of the principal amount of the 2026 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
In addition, upon the occurrence of a fundamental change (as defined in the 2026 Indenture and 2027 Indenture) prior to the maturity date, holders may require us to repurchase all or a portion of the 2026 Notes and/or the 2027 Notes for cash at a price equal to 100% of the principal amount of the 2026 Notes and/or the 2027 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
New or revised taxes and, in particular, obligations on online marketplaces and remote sellers to collect sales taxes, VAT and similar taxes, including digital service taxes, may result in liability for third party obligations and would likely increase the cost of doing business online and decrease the attractiveness of advertising and selling goods and services over the Internet.
New or revised taxes and, in particular, obligations on online marketplaces and remote sellers to collect sales taxes, VAT and similar taxes, including digital service taxes, may result in liability for third party obligations and would likely increase the cost of doing business online and decrease 31 the attractiveness of advertising and selling goods and services over the Internet.
Moreover, because the techniques used to gain access to or sabotage systems often are not recognized until launched against a target, we may be unable to anticipate the methods necessary to defend against these types of attacks and we cannot predict the extent, frequency or impact these problems may have on us.
Moreover, because the techniques used to gain access to or sabotage systems often are not recognized until launched against a target, we may be unable to anticipate the methods necessary to 23 defend against these types of attacks and we cannot predict the extent, frequency or impact these problems may have on us.
We regard our trademarks, service marks, copyrights, patents, trade dress, trade secrets, proprietary technology, merchant lists, subscriber lists, sales methodology and similar intellectual property as critical to our success, and we rely on trademark, copyright and patent law, trade secret protection and confidentiality and/or license agreements with our employees and others to protect our proprietary rights.
We regard our trademarks, service marks, copyrights, trade dress, trade secrets, proprietary technology, merchant lists, subscriber lists, sales methodology and similar intellectual property as critical to our success, and we rely on trademark, copyright and patent law, trade secret protection and confidentiality and/or license agreements with our employees and others to protect our proprietary rights.
These types of incidents continue to be prevalent and pervasive across industries, including in our industry, and such attacks on our systems have occurred in the past and are expected to occur in the future. In addition, we expect the amount and sophistication of the perpetrators of these attacks to continue to expand, which could include state-sponsored actors.
These types of incidents continue to be prevalent and pervasive across industries, including in our industry, and such attacks on our systems have occurred 22 in the past and are expected to occur in the future. In addition, we expect the amount and sophistication of the perpetrators of these attacks to continue to expand, which could include state-sponsored actors.
Further, any such transition could involve significant time and expense and could negatively impact our ability to deliver our products and services, which could harm our financial condition and results of operations. Risks Related to Transactions and Investments Acquisitions, dispositions, joint ventures and strategic investments could result in operating difficulties, dilution and other consequences.
Further, any such transition could involve significant time and expense and could negatively impact our ability to deliver our products and services, which could harm our financial condition and results of operations. 24 Risks Related to Transactions and Investments Acquisitions, dispositions, joint ventures and strategic investments could result in operating difficulties, dilution and other consequences.
Other general economic conditions and our future operating performance could ultimately limit our access to funding and adversely affect our liquidity. Although we plan to continue to actively manage and optimize our cash 30 balances and liquidity, working capital and operating expenses, there can be no assurances that we will be able to do so successfully.
Other general economic conditions and our future operating performance could ultimately limit our access to funding and adversely affect our liquidity. Although we plan to continue to actively manage and optimize our cash balances and liquidity, working capital and operating expenses, there can be no assurances that we will be able to do so successfully.
Risks Related to Transactions and Investments • Acquisitions, dispositions, joint ventures and strategic investments could result in operating difficulties, dilution and other consequences. • We do not have the ability to exert control over our minority investments, and therefore we are dependent on others in order to realize their potential benefits. 11 Risks Related to Our Brand and Intellectual Property • We allow third parties to sell products via our site, which increases our risk of litigation and other losses. • We may be subject to substantial liability claims and damage to our brand and reputation if people or property are harmed by the products or services offered through our marketplace. • We may not be able to adequately protect our intellectual property rights or may be accused of infringing intellectual property rights of third parties.
Risks Related to Transactions and Investments • Acquisitions, dispositions, joint ventures and strategic investments could result in operating difficulties, dilution and other consequences. • We do not have the ability to exert control over our minority investments, and therefore we are dependent on others in order to realize their potential benefits. 13 Risks Related to Our Brand and Intellectual Property • We allow third parties to sell products via our site, which increases our risk of litigation and other losses. • We may be subject to substantial liability claims and damage to our brand and reputation if people or property are harmed by the products or services offered through our marketplace. • We may not be able to adequately protect our intellectual property rights or may be accused of infringing intellectual property rights of third parties.
There are no assurances that our cybersecurity risk mitigation program or actions and investments to improve the maturity 21 of our systems, processes and risk management framework or remediate vulnerabilities will be sufficient or completed quickly enough to prevent or limit the impact of any cyber intrusion or related attack.
There are no assurances that our cybersecurity risk mitigation program or actions and investments to improve the maturity of our systems, processes and risk management framework or remediate vulnerabilities will be sufficient or completed quickly enough to prevent or limit the impact of any cyber intrusion or related attack.
The accounting for our investments has and may continue to cause fluctuations in our earnings from period to period, which could be significant. Risks Related to Our Brand and Intellectual Property We allow third parties to sell products via our site, which increases our risk of litigation and other losses.
The accounting for our investments has and may continue to cause fluctuations in our earnings from period to period, which could be significant. 25 Risks Related to Our Brand and Intellectual Property We allow third parties to sell products via our site, which increases our risk of litigation and other losses.
Risks Related to Our Capital Structure • Our access to capital may be limited and our ability to successfully manage and raise capital in the future may fail, which could prevent us from growing and adversely impact our liquidity. • We may not have the ability to raise the funds necessary to settle conversions of the 2026 Notes in cash, to repurchase the 2026 Notes upon a fundamental change or to repay the 2026 Notes in cash at their maturity (if not earlier converted, redeemed or repurchased), and our current and future debt may contain limitations on our ability to pay cash upon conversions of the 2026 Notes or at their maturity or to repurchase the 2026 Notes. • The terms of the 2026 Notes could delay or prevent an attempt to take over our Company. • The conditional conversion feature of the 2026 Notes, if triggered, may adversely affect our financial condition and operating results.
Risks Related to Our Capital Structure • Our access to capital may be limited and our ability to successfully manage and raise capital in the future may fail, which could prevent us from growing and adversely impact our liquidity. • We may not have the ability to raise the funds necessary to settle conversions of the 2026 Notes and 2027 Notes in cash, to repurchase the 2026 Notes and 2027 Notes upon a fundamental change or to repay the 2026 Notes and 2027 Notes in cash at their maturity (if not earlier converted, redeemed or repurchased), and our current outstanding and future debt may contain limitations on our ability to pay cash upon conversions of the 2026 Notes and 2027 Notes or at their maturity or to repurchase the 2026 Notes and 2027 Notes. • The terms of the 2026 Notes and 2027 Notes could delay or prevent an attempt to take over our Company. • The conditional conversion feature of the 2026 Notes and 2027 Notes, if triggered, may adversely affect our financial condition and operating results.
In addition, the lack of availability of financing on commercially reasonable terms or a decline in the business performance, financial 23 condition and competitive environment of any of our minority investments could result in lower financial results or forecasted results, which also could significantly decrease the fair values of our investments in those entities.
In addition, the lack of availability of financing on commercially reasonable terms or a decline in the business performance, financial condition and competitive environment of any of our minority investments could result in lower financial results or forecasted results, which also could significantly decrease the fair values of our investments in those entities.
We are involved from time to time in litigation regarding, among other matters, patent and other intellectual property claims, consumer claims, contract disputes with merchants and vendors, employment claims, and 25 securities law claims. Litigation, dispute resolution proceedings and investigations can be expensive, time-consuming and disruptive to normal business operations.
We are involved from time to time in litigation regarding, among other matters, patent and other intellectual property claims, consumer claims, contract disputes with merchants and vendors, employment claims, and securities law claims. Litigation, dispute resolution proceedings and investigations can be expensive, time-consuming and disruptive to normal business operations.
However, a successful challenge to our position or expansion of state or foreign laws could subject us to increased compliance costs and delay our ability to offer 27 Groupon vouchers or other products or services in certain jurisdictions pending receipt of any necessary licenses or registrations.
However, a successful challenge to our position or expansion of state or foreign laws could subject us to increased compliance costs and delay our ability to offer Groupon vouchers or other products or services in certain jurisdictions pending receipt of any necessary licenses or registrations.
If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay such indebtedness and repurchase the 2026 Notes or pay cash with respect to the 2026 Notes being converted or at maturity of the 2026 Notes.
If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay such indebtedness and repurchase the 2026 Notes and 2027 Notes or pay cash with respect to the 2026 Notes and 2027 Notes being converted or at maturity of the 2026 Notes and 2027 Notes.
Unless we elect to satisfy our conversion obligation by delivering solely shares of our Common Stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation in cash, which could adversely affect our liquidity.
Unless we elect to satisfy our conversion obligation by delivering solely shares of our Common Stock (other than paying cash in lieu of delivering any fractional shares), we would be required to settle a portion or all of our conversion obligation in cash, which could adversely affect our liquidity.
We may be unable to prevent third parties from using and registering our trademarks, or trademarks that are similar to, or diminish the value of, our trademarks in some countries. We may not be able to discover or determine the extent of any unauthorized use of our proprietary rights.
We may be unable to prevent third parties from 26 using and registering our trademarks, or trademarks that are similar to, or diminish the value of, our trademarks in some countries. We may not be able to discover or determine the extent of any unauthorized use of our proprietary rights.
This could have the effect of delaying or preventing a takeover of our Company that may otherwise be beneficial to our stockholders. The conditional conversion feature of the 2026 Notes, if triggered, may adversely affect our financial condition and operating results.
This could have the effect of delaying or preventing a takeover of our Company that may otherwise be beneficial to our stockholders. The conditional conversion feature of the 2026 Notes and 2027 Notes, if triggered, may adversely affect our financial condition and operating results.
Additionally, there could be uncertainty around how to comply with privacy laws, in various jurisdictions such as country or state-specific laws that may conflict with or deviate from established privacy directives, or future laws and regulations in other jurisdictions.
Additionally, there could be uncertainty around how to comply with privacy laws, in 29 various jurisdictions such as country or state-specific laws that may conflict with or deviate from established privacy directives, or future laws and regulations in other jurisdictions.
If one or more holders elect to convert their 2026 Notes, then we would be required to pay cash, deliver shares or deliver a combination of shares and cash, at our election.
If one or more holders elect to convert their 2026 Notes and/or 2027 Notes, then we would be required to pay cash, deliver shares or deliver a combination of shares and cash, at our election.
Risks Related to Technology and Cybersecurity • We may be subject to breaches of our information technology systems, which could harm our relationships with our customers, merchants, employees and third-party business partners, subject us to negative publicity and litigation, and cause substantial harm to our business or brand. • Our business depends on our ability to maintain and improve the technology infrastructure necessary to send our emails and operate our websites, mobile applications and transaction processing systems, and any significant disruption in service on our email network infrastructure, websites, mobile applications or transaction processing systems could result in a loss of customers or merchants. • As we increase our reliance on cloud-based applications and platforms to operate and deliver our products and services, any disruption or interference with these platforms could adversely affect our financial condition and results of operations.
Risks Related to Technology and Cybersecurity • We may be subject to breaches of our information technology systems, which could harm our relationships with our customers, merchants, employees and third-party business partners, subject us to negative publicity and litigation, and cause substantial harm to our business or brand. • Our business depends on our ability to maintain and improve the technology infrastructure necessary to send our emails and operate our websites, mobile applications and transaction processing systems, and any significant disruption in service on our email network infrastructure, websites, mobile applications or transaction processing systems could result in a loss of customers or merchants. • As we have increased our reliance on cloud-based applications and platforms to operate and deliver our products and services, any disruption or interference with these platforms could adversely affect our financial condition and results of operations.
In addition, as we implement our strategy, the macroeconomic environment, including but not limited to, inflationary pressures, higher labor costs, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior may make it more difficult to effectively execute our strategy, including to quickly test, learn and scale initiatives relating to improving inventory selection or improving customer experience.
In addition, as we implement our strategy, the macroeconomic environment, including but not limited to, inflationary pressures, higher labor costs, tariff policy, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior may make it more difficult to effectively execute our strategy, including to quickly test, learn and scale initiatives relating to improving inventory selection or improving customer experience.
Our international operations require management attention and resources and also require us to localize our services to conform to a wide variety of local cultures, business practices, laws and policies.
Our operations require management attention and resources and also require us to localize our services to conform to a wide variety of local cultures, business practices, laws and policies.
As a result, a significant percentage of our transactions require us to use projections in order to estimate revenue and liabilities associated with unredeemed vouchers.
As a result, 19 a significant percentage of our transactions require us to use projections in order to estimate revenue and liabilities associated with unredeemed vouchers.
The potential effect, if any, of these transactions on the price of our Common Stock or the 2026 Notes will depend in 33 part on market conditions and cannot be ascertained at this time. Any of these activities could adversely affect the value of our Common Stock. We are subject to counterparty risk with respect to the capped call transactions.
The potential effect, if any, of these transactions on the price of our Common Stock or the 2026 Notes will depend in 35 part on market conditions and cannot be ascertained at this time. Any of these activities could adversely affect the value of our Common Stock. We are subject to counterparty risk with respect to the capped call transactions.
We are also subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. Specifically, we are required to meet certain Payment Card Industry (“PCI”) Data Security Standards issued by the Payment Card Industry Security Standards Council.
We are also subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. Specifically, we are required to meet certain PCI Data Security Standards issued by the Payment Card Industry Security Standards Council.
If our strategy does not achieve its expected benefits, there could be negative impacts to our business, financial condition and results of operations. • Our restructuring plan could be disruptive to our operations and adversely affect our results of operations and financial condition, and we may not realize some or all of the anticipated benefits of this plan in the time frame anticipated or at all. • Our operating results may vary significantly from quarter to quarter. • Our international operations are subject to varied and evolving sociopolitical conditions as well as commercial, employment and regulatory challenges, and our inability to adapt to the diverse and changing landscapes of our international markets may adversely affect our business. • Our success is dependent upon our ability to provide a superior mobile experience for our customers and our customers' continued ability to access our offerings through mobile devices. • An increase in our refund rates or estimated liabilities with respect to unredeemed vouchers could adversely affect our financial results. • The loss of key executives, members of our management team and employees across our organization, or our failure to attract and retain other highly qualified personnel in the future could harm our business. • Our material weakness in internal control over financial reporting could impair our ability to report accurate and timely financial information and have a material and adverse effect on our financial condition and results of operations.
If our strategy does not achieve its expected benefits, there could be negative impacts to our business, financial condition and results of operations. • Current or future restructuring plans could be disruptive to our operations and adversely affect our results of operations and financial condition, and we may not realize some or all of the anticipated benefits of the plans in the time frame anticipated or at all. • Our operating results may vary significantly from quarter to quarter. • Our U.S. and international operations are subject to varied and evolving sociopolitical conditions as well as commercial, employment and regulatory challenges, and our inability to adapt to the diverse and changing landscapes of our U.S. and international markets may adversely affect our business. • Our success is dependent upon our ability to provide a superior mobile experience for our customers and our customers' continued ability to access our offerings through mobile devices. • An increase in our refund rates or estimated liabilities with respect to unredeemed vouchers could adversely affect our financial results. • The loss of key executives, members of our management team and employees across our organization, or our failure to attract and retain other highly qualified personnel in the future could harm our business. • Our material weakness in internal control over financial reporting could impair our ability to report accurate and timely financial information and have a material and adverse effect on our financial condition and results of operations.
If one or more of these analysts ceases coverage of our company or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline. 32 We do not intend to pay dividends for the foreseeable future.
If one or more of these analysts ceases coverage of our company or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline. 34 We do not intend to pay dividends for the foreseeable future.
If we were unable to accept credit cards for payment, we would 18 suffer substantial reductions in revenue, which would cause our business to suffer.
If we were unable to accept credit cards for payment, we would suffer substantial reductions in revenue, which would cause our business to suffer.
Risks Related to Ownership of Our Common Stock • The trading price of our Common Stock is highly volatile. • The capped call transactions may affect the value of our 2026 Notes Common Stock. • We are subject to counterparty risk with respect to the capped call transactions. 12 Risks Related to Our Business, Operations and Strategy Our strategy may be unsuccessful and may expose us to additional risks.
Risks Related to Ownership of Our Common Stock • The trading price of our Common Stock is highly volatile. • The capped call transactions may affect the value of our 2026 Notes Common Stock. • We are subject to counterparty risk with respect to the capped call transactions. 14 Risks Related to Our Business, Operations and Strategy Our strategy may be unsuccessful and may expose us to additional risks.
In addition, 15 current or future competitors may accept lower margins, or negative margins, to secure offers that attract attention and acquire new customers. We also may experience attrition in our merchants resulting from several factors, including losses to competitors and merchant closures or merchant bankruptcies.
In addition, 17 current or future competitors may accept lower margins, or negative margins, to secure offers that attract attention and acquire new customers. We also may experience attrition in our merchants resulting from several factors, including losses to competitors and merchant closures or merchant bankruptcies.
Our success is dependent upon our ability to provide a superior mobile experience for our customers and our customers' continued ability to access our offerings through mobile devices. In the year ended December 31, 2023, approximately 80% of our global transactions were completed on mobile devices.
Our success is dependent upon our ability to provide a superior mobile experience for our customers and our customers' continued ability to access our offerings through mobile devices. In the year ended December 31, 2024, approximately 80% of our global transactions were completed on mobile devices.
Under Sections 382 and 383 of the United States Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” (as defined by the Code) may be subject to limitations on its ability to utilize its pre-change net operating loss ("NOLs") and other tax attributes such as research tax credits to offset future income taxes.
Under Sections 382 and 383 of the United States Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” (as defined by the Code) may be subject to limitations on its ability to utilize its pre-change NOLs and other tax attributes such as research tax credits to offset future income taxes.
Our international operations are subject to varied and evolving sociopolitical conditions as well as commercial, employment and regulatory challenges, and our inability to adapt to the diverse and changing landscapes of our international markets may adversely affect our business.
Our U.S. and international operations are subject to varied and evolving sociopolitical conditions as well as commercial, employment and regulatory challenges, and our inability to adapt to the diverse and changing landscapes of our U.S. and international markets may adversely affect our business.
In addition, our ability to repurchase the 2026 Notes or to pay cash upon conversions of the 2026 Notes or at their maturity may be limited by law, regulatory authority or agreements governing our future indebtedness.
In addition, our ability to repurchase the 2026 Notes and 2027 Notes or to pay cash upon conversions of the 2026 Notes and 2027 Notes or at their maturity may be limited by law, regulatory authority or agreements governing our future indebtedness.
The terms of the 2026 Notes could delay or prevent an attempt to take over our Company. The terms of the 2026 Notes require us to repurchase the 2026 Notes in the event of a fundamental change. A takeover of our Company would constitute a fundamental change.
The terms of the 2026 Notes and 2027 Notes could delay or prevent an attempt to take over our Company. The terms of the 2026 Notes and 2027 Notes require us to repurchase the 2026 Notes and 2027 Notes in the event of a fundamental change. A takeover of our Company would constitute a fundamental change.
Holders of the 2026 Notes will have the right to require us to repurchase all or a portion of their 2026 Notes upon the occurrence of a fundamental change before the maturity date at a repurchase price equal to 100% of the principal amount of the 2026 Notes to be repurchased, plus accrued and unpaid interest, if any.
Holders of the 2026 Notes and 2027 Notes will have the right to require us to repurchase all or a portion of their respective notes upon the occurrence of a fundamental change before the maturity date at a repurchase price equal to 100% of the principal amount of the 2026 Notes and 2027 Notes, respectively, to be repurchased, plus accrued and unpaid interest, if any.
We expect the stock price volatility to continue for the foreseeable future as a result of these and other factors. If securities or industry analysts do not publish research or reports about our business, or publish inaccurate or unfavorable research reports about our business, our share price and trading volume could decline.
We expect the volatility in our stock price and financial markets to continue for the foreseeable future as a result of these and other factors. If securities or industry analysts do not publish research or reports about our business, or publish inaccurate or unfavorable research reports about our business, our share price and trading volume could decline.
We do not believe that we are a financial institution subject to these laws and regulations based, in part, upon the characteristics of Groupon vouchers and our role with respect to the distribution of Groupon vouchers to customers. For example, the Financial Crimes Enforcement Network ("FinCEN"), a division of the U.S.
We do not believe that we are a financial institution subject to these laws and regulations based, in part, upon the characteristics of Groupon vouchers and our role with respect to the distribution of Groupon vouchers to customers. For example, the FinCEN, a division of the U.S.
Treasury Department tasked with implementing the requirements of the Bank Secrecy Act (the "BSA"), has adopted regulations expanding the scope of the BSA and requirements for parties involved in stored value or prepaid access cards, including a proposed expansion of financial institutions to include sellers or issuers of prepaid access cards.
Treasury Department tasked with implementing the requirements of the BSA, has adopted regulations expanding the scope of the BSA and requirements for parties involved in stored value or prepaid access cards, including a proposed expansion of financial institutions to include sellers or issuers of prepaid access cards.
As we increase our reliance on cloud-based applications and platforms to operate and deliver our products and services, any disruption or interference with these platforms could adversely affect our financial condition and results of operations. We rely on cloud-based applications and platforms for critical business functions.
As we have increased our reliance on cloud-based applications and platforms to operate and deliver our products and services, any disruption or interference with these platforms could adversely affect our financial condition and results of operations. We rely on cloud-based applications and platforms for critical business functions.
Even if holders of the 2026 Notes do not elect to convert their 2026 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2026 Notes, as a current rather than long-term liability, which would result in a material reduction of our net working capital. 31 Risks Related to Ownership of Our Common Stock The trading price of our Common Stock is highly volatile.
Even if holders of the 2026 Notes and 2027 Notes do not elect to convert their respective notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2026 Notes and 2027 Notes, as a current rather than long-term liability, which would result in a material reduction of our net working capital. 33 Risks Related to Ownership of Our Common Stock The trading price of our Common Stock is highly volatile.
However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the 2026 Notes surrendered therefor or pay cash with respect to the 2026 Notes being converted or at their maturity.
However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the 2026 Notes and/or the 2027 Notes surrendered or pay cash with respect to the 2026 Notes and/or 2027 Notes being converted or at their maturity.
We are subject to complex laws and regulations that apply to our international operations, such as data privacy and protection requirements, including GDPR, the Foreign Corrupt Practices Act, the UK Anti-Bribery Act and similar local laws prohibiting certain payments to government officials, banking and payment processing regulations and anti-competition regulations, among others.
We are subject to complex laws and regulations that apply to our international operations, such as data privacy and protection requirements, including GDPR, the FCPA, the UK Anti-Bribery Act and similar local laws prohibiting certain payments to government officials, banking and payment processing regulations and anti-competition regulations, among others.
In addition, upon conversion of the 2026 Notes, unless we elect to deliver solely shares of our Common Stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the 2026 Notes being converted.
In addition, upon conversion of the 2026 Notes and 2027 Notes, unless we elect to deliver solely shares of our Common Stock to settle such conversion (other than paying cash in lieu of delivering any fractional shares), we will be required to make cash payments in respect of the respective notes, being converted.
Our international operations are subject to numerous risks, including the following: • our ability to maintain merchant and customer satisfaction such that our marketplace will continue to attract high quality merchants; • our ability to successfully respond to macroeconomic challenges, including but not limited to, inflationary pressures, higher labor costs, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior and the ability to optimize our supply to take into account consumer preferences at a particular point in time; • political, economic and civil instability and uncertainty (including macroeconomic conditions impacting us, our customers, merchants, or our vendors, acts of terrorism, civil unrest, labor unrest, violence and outbreaks of war and pandemics or other disease outbreaks); • disruptions and instability in the international markets in which we operate, including Poland, as a result of the ongoing conflict in Ukraine and the Middle East; • currency exchange rate fluctuations; • strong local competitors who may better understand the local market and/or have greater resources in the local market; 14 • different regulatory or other legal requirements (including potential fines and penalties that may be imposed for failure to comply with those requirements), such as regulation of gift cards and coupon terms, Internet services, professional selling, distance selling, bulk emailing, privacy and data protection (including GDPR), cybersecurity, business licenses and certifications, taxation (including the European Union's voucher directive, digital service tax and similar regulations and any audits), consumer protection laws including those restricting the types of services we may offer (e.g., medical-related services), banking and money transmitting, that may limit or prevent the offering of our services in some jurisdictions, cause unanticipated compliance expenses or limit our ability to enforce contractual obligations; • our ability to use a common technology platform in our North America and International segments to operate our business without significant business interruptions or delays; • difficulties in integrating with local payment providers, including banks, credit and debit card networks and electronic funds transfer systems; • the ability to quickly and effectively consult with, negotiate and seek the consent or opinion of, various employee groups, our international workers' councils and trade unions that represent our international employees on various matters including restructuring actions, strategic decisions, any changes to our activities or employee benefits and other business critical matters, which could result in the delay of executing key actions or product delivery and increase costs; • the local legal restrictions relating to employment and staffing; • difficulty in staffing, including attracting and retaining talent with an appropriate level of skill and experience, including product and technology expertise, cybersecurity expertise, GAAP knowledge and experience to create the proper control environment for effective internal control over financial reporting, developing and managing foreign operations, including through centralized shared service centers, as a result of distance, language barriers and cultural differences; • periodic reductions in business activity; • expenses associated with localizing our products; and • differing intellectual property laws.
Our operations are subject to numerous risks, including the following: • our ability to maintain merchant and customer satisfaction such that our marketplace will continue to attract high quality merchants; • our ability to successfully respond to macroeconomic challenges, including but not limited to, inflationary pressures, higher labor costs, tariff policy, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior and the ability to optimize our supply to take into account consumer preferences at a particular point in time; • political, economic and civil instability and uncertainty (including macroeconomic conditions impacting us, our customers, merchants, or our vendors, acts of terrorism, civil unrest, labor unrest, violence and outbreaks of war and pandemics or other disease outbreaks); • disruptions and instability in the international markets in which we operate, including Poland, as a result of the ongoing conflict in Ukraine and the Middle East; • Challenges in navigating legal and judicial systems in international jurisdictions, which may vary significantly in complexity, efficiency, and enforceability, and where we do not employ legal staff locally, further increasing the difficulty of addressing and resolving disputes; • currency exchange rate fluctuations; 16 • strong local competitors who may better understand the local market and/or have greater resources in the local market; • different regulatory or other legal requirements (including potential fines and penalties that may be imposed for failure to comply with those requirements), such as regulation of gift cards and coupon terms, Internet services, professional selling, distance selling, bulk emailing, privacy and data protection (including GDPR), cybersecurity, business licenses and certifications, taxation (including the European Union's voucher directive, digital service tax and similar regulations and any audits), consumer protection laws including those restricting the types of services we may offer (e.g., medical-related services), banking and money transmitting, that may limit or prevent the offering of our services in some jurisdictions, cause unanticipated compliance expenses or limit our ability to enforce contractual obligations; • our ability to use a common technology platform in our North America and International segments to operate our business without significant business interruptions or delays; • difficulties in integrating with local payment providers, including banks, credit and debit card networks and electronic funds transfer systems; • the ability to quickly and effectively consult with, negotiate and seek the consent or opinion of, various employee groups, our international workers' councils and trade unions that represent our international employees on various matters including restructuring actions, strategic decisions, any changes to our activities or employee benefits and other business critical matters, which could result in the delay of executing key actions or product delivery and increase costs; • the local legal restrictions relating to employment and staffing; • difficulty in staffing, including attracting and retaining talent with an appropriate level of skill and experience, including knowledge and experience in developing and managing foreign operations, including through centralized shared service centers, as a result of distance, language barriers and cultural differences; • periodic reductions in business activity; • expenses associated with localizing our products; and • differing intellectual property laws.
(federal, state, and local) and numerous foreign jurisdictions. Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change due to economic, political, and other conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes.
We are subject to income taxes in the U.S. (federal, state, and local) and numerous foreign jurisdictions. Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change due to economic, political, and other conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes.
Our failure to repurchase the 2026 Notes at a time when the repurchase is required by the Indenture governing the 2026 Notes or to pay cash upon conversions of the 2026 Notes or at their maturity as required by the Indenture would constitute a default under the Indenture.
Our failure to repurchase the 2026 Notes and 2027 Notes at a time when the repurchase is required by the 2026 Notes Indenture and 2027 Notes Indenture governing the 2026 Notes and 2027 Notes, respectively, or to pay cash upon conversions of the 2026 Notes and 2027 Notes or at their maturity as required by the Indenture would constitute a default under each respective indenture.
Our restructuring plan could be disruptive to our operations and adversely affect our results of operations and financial condition, and we may not realize some or all of the anticipated benefits of this plan in the time frame anticipated or at all.
Current or future restructuring plans could be disruptive to our operations and adversely affect our results of operations and financial condition, and we may not realize some or all of the anticipated benefits of the plans in the time frame anticipated or at all.
If our systems and procedures with respect to any such feedback or complaints are determined to be inadequate or any action or inaction is found to be inadequate, including, by way of example, not discontinuing on a timely basis offers of deals with merchants or sellers that have been the subject of material complaints, we could face substantial additional liability and damage to our brand and reputation for the misconduct of such merchants or third-party sellers. 24 We may not be able to adequately protect our intellectual property rights or may be accused of infringing intellectual property rights of third parties.
If our systems and procedures with respect to any such feedback or complaints are determined to be inadequate or any action or inaction is found to be inadequate, including, by way of example, not discontinuing on a timely basis offers of deals with merchants or sellers that have been the subject of material complaints, we could face substantial additional liability and damage to our brand and reputation for the misconduct of such merchants or third-party sellers.
In the event the conditional conversion feature of the 2026 Notes is triggered, holders of the 2026 Notes will be entitled to convert their 2026 Notes at any time during specified periods at their option.
In the event the conditional conversion feature of the 2026 Notes and/or the 2027 Notes is triggered, holders of these notes will be entitled to convert their respective notes at any time during specified periods at their option.
Risks Related to Legal, Regulatory, Privacy and Tax Matters • We are involved in pending litigation and other claims and an adverse resolution of such matters may adversely affect our business, financial condition, results of operations and cash flows. • The application of certain laws and regulations, including, among other laws, the CARD Act and similar state and foreign laws, may harm our business and results of operations. • If we are required to materially increase the liability recorded in our financial statements with respect to unredeemed vouchers, our results of operations could be materially and adversely affected. • Federal laws and regulations, such as the Bank Secrecy Act and the USA PATRIOT Act and similar foreign laws, could be expanded to include Groupon vouchers or other offerings. • State and foreign laws regulating money transmission could be expanded to include Groupon vouchers or other Groupon products or services. • Failure to comply with existing, expanding or newly enacted U.S. federal, state and international privacy laws and regulations, could adversely affect our business. • Misclassification or reclassification of our independent contractors, agency workers or employees could increase our costs and adversely impact our business. • The adoption of tax reform policies, including the enactment of legislation or regulations implementing changes in the tax treatment of companies engaged in Internet commerce and U.S. taxation could materially affect our financial position and results of operations.
Risks Related to Legal, Regulatory, Privacy and Tax Matters • We are involved in pending litigation and other claims and an adverse resolution of such matters may adversely affect our business, financial condition, results of operations and cash flows. • The application of certain laws and regulations, including, among other laws, the CARD Act and similar state and foreign laws, may harm our business and results of operations. • Federal laws and regulations, such as the Bank Secrecy Act and the USA PATRIOT Act and similar foreign laws, could be expanded to include Groupon vouchers or other offerings. • State and foreign laws regulating money transmission could be expanded to include Groupon vouchers or other Groupon products or services. • Failure to comply with existing, expanding or newly enacted U.S. federal, state and international privacy laws and regulations, could adversely affect our business. • Misclassification or reclassification of our independent contractors, agency workers or employees could increase our costs and adversely impact our business. • We may have exposure to greater than anticipated tax liabilities, including the Italy tax Assessment. • The adoption of tax reform policies, including the enactment of legislation or regulations implementing changes in the tax treatment of companies engaged in Internet commerce and U.S. taxation could materially affect our financial position and results of operations. • We may be adversely affected by global climate change or by legal, regulatory, or market responses to such change.
In prior years, COVID-19 had a significant impact on refunds, and any downturns in general economic conditions or extended period of low consumer confidence in the future could also increase our refund rates. An increase in our refund rates could significantly reduce our liquidity, profitability and financial results. We estimate future refunds based on historical refund experience by category.
Any downturns in general economic conditions or extended period of low consumer confidence in the future could increase our refund rates. An increase in our refund rates could significantly reduce our liquidity, profitability and financial results. We estimate future refunds based on historical refund experience by category.
Such information, whether accurate or inaccurate, may result in us being sued by our merchants, subscribers or third parties and as a result our results of operations and our financial position could be materially and adversely affected. We may have exposure to greater than anticipated tax liabilities. We are subject to income taxes in the U.S.
Such information, whether accurate or inaccurate, may result in us being sued 30 by our merchants, subscribers or third parties and as a result our results of operations and our financial position could be materially and adversely affected. We may have exposure to greater than anticipated tax liabilities, including the Italy tax Assessment.
Any such financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could harm our business. We have outstanding $230.0 million in aggregate principal amount of our 2026 Notes due March 2026.
Any such financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could harm our business. We have outstanding $53.7 million and $197.3 million in aggregate principal amount of our 2026 Notes and 2027 Notes.
We do not have the ability to exert control over our minority investments, and therefore we are dependent on others in order to realize their potential benefits. We currently hold non-controlling minority investments in entities, including SumUp Holdings S.a.r.l. ("SumUp"), Monster Holdings LP and Nearby Pte Ltd, and we may make additional strategic minority investments in the future.
We do not have the ability to exert control over our minority investments, and therefore we are dependent on others in order to realize their potential benefits. We currently hold non-controlling minority investments in entities, including SumUp, and we may make additional strategic minority investments in the future.
Further, developments in an audit, litigation or the relevant laws, regulations, administrative practices, principles and 29 interpretations could have a material effect on our financial position, operating results and cash flows in the period or periods for which that development occurs, as well as for prior and subsequent periods.
Further, developments in an audit, litigation or the relevant laws, regulations, administrative practices, principles and interpretations could have a material effect on our financial position, operating results and cash flows in the period or periods for which that development occurs, as well as for prior and subsequent periods. We also are subject to regular review and audit by both U.S.
Additionally, in February 2023, our Chief Administrative Officer, General Counsel and Corporate Secretary resigned, in March 2023, we appointed a new Interim Chief Executive Officer, in April 2023 we appointed a new Chief Financial Officer and in May 2023 we appointed a new Interim Chief Accounting Officer who was then appointed as Chief Accounting Officer in November 2023.
In February 2023, our Chief Administrative Officer, General Counsel and Corporate Secretary resigned, in March 2023, we appointed a new Interim CEO who was then appointed as CEO in May 2024.
We also rely heavily on Internet search engines to generate traffic to our websites, principally through SEM and SEO. The number of consumers we attract from search engines to our platform is due in large part to how and where information from, and links to, our websites are displayed on search engine results pages.
The number of consumers we attract from search engines to our platform is due in large part to how and where information from, and links to, our websites are displayed on search engine results pages.
A default under the Indenture governing the 2026 Notes could also lead to a default under agreements governing our existing and future indebtedness. Moreover, the occurrence of a fundamental change under the Indenture governing the 2026 Notes could constitute an event of default under any such future agreement.
Moreover, the occurrence of a fundamental change under the 2026 Notes Indenture governing the 2026 Notes and the 2027 Notes Indenture governing the 2027 Notes could constitute an event of default under any such future agreement.
In addition, events affecting our third-party payment processors or our integrations with them, including cyber-attacks, Internet or other infrastructure or communications impairment or other events that could interrupt the normal operation of our payment processors or our integrations with them, could result in unauthorized access to customer information and could have a material adverse effect on our business.
In addition, events affecting our third-party payment processors or our integrations with them, including cyber-attacks, Internet or other infrastructure or communications impairment or other events that could interrupt the normal operation of our payment processors or our integrations with them, could result in unauthorized access to customer information and could have a material adverse effect on our business. 21 Risks Related to Technology and Cybersecurity We rely on email, Internet search engines and mobile application marketplaces to drive traffic to our marketplace.
In addition, our service could be subject to employee fraud or other internal security breaches or merchant fraud, and we may be required to reimburse customers or merchants for any funds stolen or revenue lost as a result of such breaches.
While we use advanced anti-fraud technologies, criminals may attempt to 20 circumvent our anti-fraud systems using increasingly sophisticated methods. In addition, our service could be subject to employee fraud or other internal security breaches or merchant fraud, and we may be required to reimburse customers or merchants for any funds stolen or revenue lost as a result of such breaches.
Moreover, we will be required to repay the 2026 Notes in cash at their maturity unless earlier converted, redeemed or repurchased.
Moreover, we will be required to repay the 2026 Notes and the 2027 Notes, in cash at their respective maturity dates unless earlier converted, redeemed (noting that the 2027 Notes cannot be redeemed by us) or repurchased.
The California Privacy Rights Act (the "CPRA"), which expands on and effectively replaces the California Consumer Privacy Act (the "CCPA") that became effective January 1, 2023, similarly regulates the collection and use of consumers' data, and includes additional protection for sensitive personal data.
The CPRA, which expands on and effectively replaces the CCPA that became effective January 1, 2023, similarly regulates the collection and use of consumers' data, and includes additional protection for sensitive personal data. The CDPA, effective as of January 1, 2023, and the CPA, effective as of July 1, 2023, provide new data privacy rights to their respective residents.
As we increase our reliance on cloud-based computing services, our exposure to damage from service interruptions may increase. In the event any such issues arise, it may be difficult for us to switch our operations from our primary cloud-based providers to alternative providers.
In the event any such issues arise, it may be difficult for us to switch our operations from our primary cloud-based providers to alternative providers.
In particular, in the event that we are restricted, in whole or in part, from operating in one or more countries, our ability to retain or increase our customer base may be adversely affected and we may not be able to maintain or grow our gross profit as anticipated.
In particular, in the event that we are restricted, in whole or in part, from operating in one or more countries, our ability to retain or increase our customer base may be adversely affected and we may not be able to maintain or grow our gross profit as anticipated. 28 Federal laws and regulations, such as the Bank Secrecy Act and the USA PATRIOT Act and similar foreign laws, could be expanded to include Groupon vouchers or other offerings.
Any of these parties may take additional action in the future to respond to such concerns, which could have a negative impact on our business and results of operations. 20 We may be subject to breaches of our information technology systems, which could harm our relationships with our customers, merchants, employees and third-party business partners, subject us to negative publicity and litigation, and cause substantial harm to our business or brand.
We may be subject to breaches of our information technology systems, which could harm our relationships with our customers, merchants, employees and third-party business partners, subject us to negative publicity and litigation, and cause substantial harm to our business or brand.
Any adverse outcome of such a review or audit could have a significant negative effect on our financial position and results of operations. In addition, the determination of our worldwide provision for income taxes and other tax liabilities requires significant judgment by management, and there are many transactions where the ultimate tax determination is uncertain.
In addition, the determination of our worldwide provision for income taxes and other tax liabilities requires significant judgment by management, and there are many transactions where the ultimate tax determination is uncertain.
We also are subject to regular review and audit by both U.S. (federal, state. local) and foreign tax authorities. In particular, we currently are, and expect to continue to be, subject to numerous federal, state and international tax audits relating to income, transfer pricing, sales, VAT and other tax liabilities.
(federal, state. local) and foreign tax authorities. In particular, we currently are, and expect to continue to be, subject to numerous federal, state and international tax audits relating to income, transfer pricing, sales, VAT and other tax liabilities. Some of these pending and future audits could involve significant liabilities and/or penalties.
We may not have the ability to raise the funds necessary to settle conversions of the 2026 Notes in cash, to repurchase the 2026 Notes upon a fundamental change or to repay the 2026 Notes in cash at their maturity (if not earlier converted, redeemed or repurchased), and our current and future debt may contain limitations on our ability to pay cash upon conversions of the 2026 Notes or at their maturity or to repurchase the 2026 Notes.
If we cannot access the full capacity of any existing credit facility or raise or borrow funds on acceptable terms or at all, it could adversely affect our liquidity, and we may not be able to grow our business or respond to competitive pressures. 32 We may not have the ability to raise the funds necessary to settle conversions of the 2026 Notes and 2027 Notes in cash, to repurchase the 2026 Notes and 2027 Notes upon a fundamental change or to repay the 2026 Notes and 2027 Notes in cash at their maturity (if not earlier converted, redeemed or repurchased), and our current outstanding and future debt may contain limitations on our ability to pay cash upon conversions of the 2026 Notes and 2027 Notes or at their maturity or to repurchase the 2026 Notes and 2027 Notes.
Although we maintain insurance, we cannot be certain our coverage will apply to the claims at issue, be adequate for any liability incurred, or continue to be available to us on economically reasonable terms, or at all.
We also hold indemnity rights with respect to merchants in relation to any such claims, but there is no assurance that merchants will be sufficiently capitalized to cover all incurred losses. 27 Although we maintain insurance, we cannot be certain our coverage will apply to the claims at issue, be adequate for any liability incurred, or continue to be available to us on economically reasonable terms, or at all.
The material weakness is due to inadequate preventative and detective controls over complex manual calculations used to record certain month-end balances. While management has made improvements to the control environment throughout 2023, additional control procedures are still being implemented.
The material weakness is due to inadequate preventative and detective controls over complex manual calculations used to record certain month-end balances.
Furthermore, we have experienced continued disruption in our business due to the announcement of our cost savings plan and significant turnover in our senior management team. Reductions in our workforce have led to employees filling certain key roles and we may experience additional changes in key roles in the future.
Reductions in our workforce have led to employees filling certain key roles and we may experience additional changes in key roles in the future.
Email, Internet service and web browser providers, as well as Internet search engines and mobile marketplace operators continue to remain focused on concerns surrounding user and data privacy and protection.
Email, Internet service and web browser providers, as well as Internet search engines and mobile marketplace operators continue to remain focused on concerns surrounding user and data privacy and protection. Any of these parties may take additional action in the future to respond to such concerns, which could have a negative impact on our business and results of operations.
It is possible that consumers or other third parties will seek to create counterfeit vouchers or codes, fraudulent accounts or fraudulent banking information in order to improperly purchase or redeem goods and services. While we use advanced anti-fraud technologies, criminals may attempt to circumvent our anti-fraud systems using increasingly sophisticated methods.
We sell a variety of offerings to consumers through our marketplace, including our vouchers and digital coupon offerings with unique identifier codes. It is possible that consumers or other third parties will seek to create counterfeit vouchers or codes, fraudulent accounts or fraudulent banking information in order to improperly purchase or redeem goods and services.
We also may be subject to additional risk of cybersecurity breaches or other improper access to our data or confidential information following our migration to cloud-based computing platforms. In addition, cloud computing services may operate differently than anticipated when introduced or when new versions or enhancements are released.
To date, although we may be subject to additional risk of cybersecurity breaches or other improper access to our data or confidential information following our migration to cloud-based computing platforms, the risk is less than us building and managing our own data centers before we moved to these cloud-based services.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeSee Item 1A. - Risk Factors for more information on our cybersecurity risks. The Audit Committee of our Board ("Audit Committee") oversees risks pertaining to cybersecurity.
Biggest changeSee Item 1A. - Risk Factors for more information on our cybersecurity risks. The Audit Committee oversees risks pertaining to cybersecurity. A member of our IT and Information Security teams regularly reports to the Audit Committee, and directly to the Board, as appropriate, on the state of our cybersecurity program and provides updates on cybersecurity matters.
CYBERSECURITY We face significant and persistent cybersecurity risks due to the widespread use of our websites and mobile applications; the attractiveness of our websites and mobile applications to threat actors, including state-sponsored actors; the fact that we operate globally and must defend against cybersecurity attacks in thirteen countries; the substantial level of harm that could occur to our business, our customers, or our merchants if were we to suffer a material cybersecurity incident; and our use of third-party products and services.
CYBERSECURITY We face significant and persistent cybersecurity risks due to the widespread use of our websites and mobile applications; the attractiveness of our websites and mobile applications to threat actors, including state-sponsored actors; the fact that we operate globally and must defend against cybersecurity attacks in thirteen countries; the substantial level of harm that could occur to our business, our customers, or our merchants if we were to suffer a material cybersecurity incident; and our use of third-party products and services.
Specifically, we leverage industry best practices to identify and mitigate data security risks, including but not limited to, utilizing processes and tools to monitor and address email security, the security of our workstations and servers, cloud security, password management, secure file transfers and ransomware protection.
Specifically, 36 we leverage industry best practices to identify and mitigate data security risks, including but not limited to, utilizing processes and tools to monitor and address email security, the security of our workstations and servers, cloud security, password management, secure file transfers and ransomware protection.
Our VP of InfoSec and CTO regularly report directly to the Audit Committee on our cybersecurity program and efforts to prevent, detect, mitigate and remediate issues. In addition, we have an escalation process in place to inform senior management and the Board of material issues.
Our VP of InfoSec regularly reports directly to the Audit Committee on our cybersecurity program and efforts to prevent, detect, mitigate and remediate issues. In addition, we have an escalation process in place to inform senior management and the Board of material issues.
As of the date of this Form 10-K, we have not experienced a material cybersecurity threat or incident that resulted in a material adverse impact to our business or operations, but there can be no guarantee that we will not experience such an incident in the future.
As of the date of this Form 10-K, we have not experienced a material cybersecurity threat or incident that resulted in a material adverse impact to our business strategy, results of operations or financial condition, but there can be no guarantee that we will not experience such an incident in the future.
Redmond has served in this position for the last year and has worked at Groupon for over 7 years, and, prior to Groupon, his experience includes serving as the CTO of Knowledge Point, a learning materials management service provider. Our Information Security Officer reports to Mr.
Redmond has served in this position for the last 2 years and has worked at Groupon for over 8 years, and, prior to Groupon, his experience includes serving as the CTO of Knowledge Point, a learning materials management service provider. Our Information Security Officer reports to Mr.
Our Information Security Officer joined Groupon in November 2023, and, prior to Groupon, was previously in VMware Carbon Black, and prior to that held roles in Skyscanner. Our Security Manager and Security Operation Center Manager also have extensive experience assessing and managing cybersecurity programs and cybersecurity risk.
Our Information Security Officer joined Groupon in November 2023, and, prior to Groupon, was previously in Vodafone, based in Hungary. Our Security Manager and Security Operation Center Manager also have extensive experience assessing and managing cybersecurity programs and cybersecurity risk.
We employ security practices to protect and maintain the systems located at our cloud hosting providers, invest in intrusion and anomaly detection tools and engage third-party security firms to test the security of our 34 websites and systems.
In addition, our Vice President of Software Engineering typically conducts an annual cybersecurity review with our Board. We employ security practices to protect and maintain the systems located at our cloud hosting providers, invest in intrusion and anomaly detection tools and engage third-party security firms to test the security of our websites and systems.
The day to day operations of our cybersecurity risk management program are overseen by our IT and Information Security teams. Our cybersecurity program is run by our Vice President of Engineering for InfoSec, Darren Redmond, who reports to our Chief Technology Officer ("CTO"), Vojtech Rysanek.
The day to day operations of our cybersecurity risk management program are overseen by our IT and Information Security teams. Our cybersecurity program is run by our Vice President of Engineering for InfoSec, Darren Redmond, who reports to our COO, Filip Popovic. Our COO has served in that position since June 2024. Mr.
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A member of our IT and Information Security teams regularly reports to the Audit Committee, and directly to the Board, as appropriate, on the state of our cybersecurity program and provides updates on cybersecurity matters. In addition, our Vice President of Software Engineering typically conducts an annual cybersecurity review with our Board.
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Our CTO has served in that position since November 2022, and, prior to Groupon, he was previously the CTO at Aukro, the largest online marketplace in the Czech Republic. Mr.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES As of December 31, 2023, we owned no property and leased 16 facilities throughout the world. Our corporate headquarters is located in Chicago, Illinois.
Biggest changeITEM 2. PROPERTIES As of December 31, 2024, we owned no property and leased 16 facilities throughout the world. Our corporate headquarters is located in Chicago, Illinois.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under the amended and restated credit agreement, dated May 14, 2019, as amended from time to time, (the "Credit Agreement"), share price, available cash and other factors, and the share repurchase program may be terminated at any time.
Biggest changeThe timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under the 2026 Notes and 2027 Notes, share price, available cash and other factors, and the share repurchase program may be terminated at any time. We will fund the repurchases, if any, through cash on hand and future cash flows.
Issuer Purchases of Equity Securities In May 2018, the Board authorized us to repurchase up to $300.0 million of our Common Stock under our share repurchase program. During the year ended December 31, 2023, we did not purchase any shares under the repurchase program.
Issuer Purchases of Equity Securities In May 2018, the Board authorized us to repurchase up to $300.0 million of our Common Stock under our share repurchase program. During the year ended December 31, 2024, we did not purchase any shares under the repurchase program.
Since the inception of our share repurchase programs in August 2013 through December 31, 2023, we have repurchased 10,294,117 shares of our Common Stock for an aggregate purchase price of $922.7 million (including fees and commissions).
Since the inception of our share repurchase programs in August 2013 through December 31, 2024, we have repurchased 10,294,117 shares of our Common Stock for an aggregate purchase price of $922.7 million (including fees and commissions).
The graph set forth below compares the cumulative total return on our Common Stock with the cumulative total return of the Nasdaq Composite Index and the Nasdaq 100 Index, resulting from an initial investment of $100 in each and assuming the reinvestment of any dividends, based on closing prices on the last trading day of each year end period for 2019, 2020, 2021, 2022, and 2023. 37
The graph set forth below compares the cumulative total return on our Common Stock with the cumulative total return of the Nasdaq Composite Index and the Nasdaq 100 Index, resulting from an initial investment of $100 in each and assuming the reinvestment of any dividends, based on closing prices on the last trading day of each year end period for 2020, 2021, 2022, 2023, and 2024. 39
As of December 31, 2023, up to $245.0 million of Common Stock remained available for purchase under our program.
As of December 31, 2024, up to $245.0 million of Common Stock remained available for purchase under our program.
Holders As of March 12, 2024, there were 93 holders of record of our Common Stock. Each holder of our Common Stock is entitled to one vote per share on any matter that is submitted to a vote of stockholders. Recent Sales of Unregistered Securities During the year ended December 31, 2023, we did not issue any unregistered equity securities.
Holders As of March 6, 2025, there were 86 holders of record of our Common Stock. Each holder of our Common Stock is entitled to one vote per share on any matter that is submitted to a vote of stockholders. Recent Sales of Unregistered Securities During the year ended December 31, 2024, we did not issue any unregistered equity securities.
The following table provides information about purchases of shares of our Common Stock during the three months ended December 31, 2023 related to shares withheld upon vesting of restricted stock units for minimum tax withholding obligations: Date Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under Program October 1-31, 2023 9,280 $ 12.61 — — November 1-30, 2023 1,472 9.51 — — December 1-31, 2023 381 10.50 — — Total 11,133 $ 12.13 — — (1) Total number of shares delivered to us by employees to satisfy the mandatory tax withholding requirement upon vesting of stock-based compensation awards. 36 Stock Performance Graph This performance graph shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference into any filing of Groupon, Inc. under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
The following table provides information about purchases of shares of our Common Stock during the three months ended December 31, 2024 related to shares withheld upon vesting of restricted stock units for minimum tax withholding obligations: Date Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under Program October 1-31, 2024 2,807 $ 10.69 — — November 1-30, 2024 3,194 8.45 — — December 1-31, 2024 1,373 9.47 — — Total 7,374 $ 9.49 — — (1) Total number of shares delivered to us by employees to satisfy the mandatory tax withholding requirement upon vesting of stock-based compensation awards. 38 Stock Performance Graph This performance graph shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing of Groupon, Inc. under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
We will fund the repurchases, if any, through cash on hand, future cash flows and borrowings under our credit facility. Repurchases will be made in compliance with SEC rules and other legal requirements and may be made in part under a Rule 10b5-1 plan, which permits stock repurchases when we might otherwise be precluded from doing so.
Repurchases will be made in compliance with SEC rules and other legal requirements and may be made in part under a Rule 10b5-1 plan, which permits stock repurchases when we might otherwise be precluded from doing so.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

68 edited+27 added−26 removed43 unchanged
Biggest changeThese decreases were primarily attributable to a decline in demand for our Goods and Local categories and an overall decline in engagement on our platform that resulted in fewer unit sales and lower gross billings. 42 Financial Metrics North America segment revenue, cost of revenue and gross profit for the years ended December 31, 2023 and 2022 were as follows (dollars in thousands): Year Ended December 31, % Change 2023 2022 2023 vs 2022 Revenue Local $ 346,962 $ 390,449 (11.1) % Goods 18,436 28,785 (36.0) Travel 14,554 17,035 (14.6) Total revenue $ 379,952 $ 436,269 (12.9) Cost of revenue Local $ 44,199 $ 52,693 (16.1) % Goods 3,276 5,249 (37.6) Travel 3,484 4,173 (16.5) Total cost of revenue $ 50,959 $ 62,115 (18.0) Gross profit Local $ 302,763 $ 337,756 (10.4) % Goods 15,160 23,536 (35.6) Travel 11,070 12,862 (13.9) Total gross profit $ 328,993 $ 374,154 (12.1) Gross margin (1) 33.3 % 35.2 % % of Consolidated revenue 73.8 72.8 % of Consolidated cost of revenue 79.3 81.5 % of Consolidated gross profit 73.0 71.6 (1) Represents the percentage of gross billings that we retained after deducting the merchant's share from gross billings.
Biggest changeThe Local category growth is offset by a de-emphasis on our Goods category evidenced by a decrease of our Goods active customers that resulted in fewer unit sales and lower gross billings year over year. 44 Financial Metrics North America segment revenue, cost of revenue and gross profit for the years ended December 31, 2024 and 2023 were as follows (dollars in thousands): Year Ended December 31, % Change 2024 2023 2024 vs 2023 Revenue Local $ 350,876 $ 346,962 1.1 % Goods 10,990 18,436 (40.4) Travel 14,206 14,554 (2.4) Total revenue $ 376,072 $ 379,952 (1.0) Cost of revenue Local $ 34,070 $ 44,199 (22.9) % Goods 1,405 3,276 (57.1) Travel 2,433 3,484 (30.2) Total cost of revenue $ 37,908 $ 50,959 (25.6) Gross profit Local $ 316,806 $ 302,763 4.6 % Goods 9,585 15,160 (36.8) Travel 11,773 11,070 6.4 Total gross profit $ 338,164 $ 328,993 2.8 % of Consolidated revenue 76.4 73.8 % of Consolidated cost of revenue 78.6 79.3 % of Consolidated gross profit 76.1 73.0 Comparison of the Years Ended December 31, 2024 and 2023: North America revenue and cost of revenue decreased by $3.9 million and $13.1 million while gross profit increased by $9.2 million for the year ended December 31, 2024 compared with the prior year period.
Overview Groupon is a global scaled two-sided marketplace that connects consumers to merchants. Consumers access our marketplace through our mobile applications and our websites. We operate in two segments, North America and International, and in three categories, Local, Goods and Travel. See Item 8, Note 18, Segment Information, for additional information.
Overview Groupon is a global scaled two-sided marketplace that connects consumers to merchants. Consumers access our marketplace through our mobile applications and our websites. We operate in two segments, North America and International, and in three categories, Local, Goods and Travel. See Item 8, Note 18, Segment and Geographical Information, for additional information.
We evaluate marketing expense as a percentage of gross profit because it gives us an indication of how well our marketing spend is driving gross profit performance. • Selling, general and administrative ("SG&A") expenses include selling expenses such as sales commissions and other compensation expenses for sales representatives, as well as costs associated with supporting the sales function such as technology, telecommunications and travel.
We evaluate marketing expense as a percentage of gross profit because it gives us an indication of how well our marketing spend is driving gross profit performance. • SG &A expenses include selling expenses such as sales commissions and other compensation expenses for sales representatives, as well as costs associated with supporting the sales function such as technology, telecommunications and travel.
Tracking gross billings also allows us to monitor the percentage of gross billings that we are able to retain after payments to merchants.
Tracking gross billings 41 also allows us to monitor the percentage of gross billings that we are able to retain after payments to merchants.
For further discussion regarding operating and financial data for the year ended December 31, 2022 as compared to the year ended December 31, 2021, refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
For further discussion regarding operating and financial data for the year ended December 31, 2023 as compared to the year ended December 31, 2022, refer to Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Federal income tax rate was 21% for the years ended December 31, 2023 and 2022. The primary factors impacting the effective tax rate for the years ended December 31, 2023 and 2022 were the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets.
Federal income tax rate was 21% for the years ended December 31, 2024 and 2023. The primary factors impacting the effective tax rate for the years ended December 31, 2024 and 2023 were the pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets.
We report units on a gross basis prior to the consideration of customer refunds and therefore units are not always a good proxy for gross billings. • Active customers are unique user accounts that have made a purchase during the trailing twelve months ("TTM") either through one of our online marketplaces or directly with a merchant for which we earned a commission.
We report units on a gross basis prior to the consideration of customer refunds and therefore units are not always a good proxy for gross billings. • Active customers are unique user accounts that have made a purchase during the TTM either through one of our online marketplaces or directly with a merchant for which we earned a commission.
To acquire and retain customers to drive higher volumes on our platform from new and existing customers, we are focused on strengthening our product offering, improving the attractiveness of our offerings, and rebuilding our performance marketing campaigns. Impact of macroeconomic conditions .
To acquire and retain customers to drive higher volumes on our platform from new and existing customers, we are focused on strengthening our product offering, improving the attractiveness of our offerings, and enhancing the performance of our marketing campaigns. Impact of macroeconomic conditions .
We believe that the estimates and assumptions related to going concern, revenue recognition, impairment assessments and income taxes have the greatest potential impact on our Consolidated Financial Statements. Therefore, we consider these to be our critical accounting estimates.
We believe that the estimates and assumptions related to revenue recognition, impairment assessments and income taxes have the greatest potential impact on our Consolidated Financial Statements. Therefore, we consider these to be our critical accounting estimates.
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, free cash flow and foreign currency exchange rate neutral operating results.
Non-GAAP Financial Measures In addition to financial results reported in accordance with GAAP, we have provided the following non-GAAP financial measures: Adjusted EBITDA, free cash flow and foreign currency exchange rate neutral operating results.
In May 2018, the Board authorized us to repurchase up to $300.0 million of our Common Stock under our share repurchase program. As of December 31, 2023, up to $245.0 million of Common Stock remained available for purchase under our program.
In May 2018, the Board authorized us to repurchase up to $300.0 million of our Common Stock under our share repurchase program. As of December 31, 2024, up to $245.0 million of Common Stock remained available for purchase under our program.
See Item 8, Note 2, Summary of Significant Accounting Policies , and Note 14, Income Taxes , for information about our income tax accounting policies. Recently Issued Accounting Standards For a description of recently issued accounting standards, please see Item 8, Note 2, Summary of Significant Accounting Policies. 54
See Item 8, Note 2, Summary of Significant Accounting Policies , and Note 14, Income Taxes , for information about our income tax accounting policies. Recently Issued Accounting Standards For a description of recently issued accounting standards, please see Item 8, Note 2, Summary of Significant Accounting Policies. 56
We have been, and may continue to be, impacted by adverse consequences of the macroeconomic environment, including but not limited to, inflationary pressures, higher labor costs, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior.
We have been, and may continue to be, impacted by adverse consequences of the macroeconomic environment, including but not limited to, inflationary pressures, higher labor costs, tariff policy, labor shortages, supply chain challenges and changes in consumer and merchant behavior.
See Item 8, Note 2, Summary of Significant Accounting Policies for information about our accounting policies relating to impairment of goodwill and long-lived assets. 53 Income Taxes We account for income taxes using the asset and liability method and assess whether it is more likely than not that the deferred tax assets will be realized.
See Item 8, Note 2, Summary of Significant Accounting Policies for information about our accounting policies relating to impairment of goodwill, long-lived assets, right-of-use assets and investments. Income Taxes We account for income taxes using the asset and liability method and assess whether it is more likely than not that the deferred tax assets will be realized.
However, those non-GAAP financial measures are not intended to be a substitute for those reported in accordance with U.S. GAAP. Adjusted EBITDA .
However, those non-GAAP financial measures are not intended to be a substitute for those reported in accordance with GAAP. Adjusted EBITDA .
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 to evaluate operating performance, generate future operating plans and make strategic decisions for the allocation of capital.
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 to evaluate operating performance, generate future operating plans and make strategic decisions.
For the year ended December 31, 2023, we continue to maintain a full valuation allowance against all U.S. federal and state deferred tax assets.
For the years ended December 31, 2024 and 2023, we continue to maintain a full valuation allowance against all U.S. federal and state deferred tax assets.
However, we are focused on achieving long-term gross profit and Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") growth. • Units are the number of purchases during the reporting period, before refunds and cancellations, made either through one of our online marketplaces, a third-party marketplace, or directly with a merchant for which we earn a commission.
However, we are focused on achieving long-term gross profit and EBITDA growth. • Units are the number of purchases during the reporting period, before refunds and cancellations, made either through one of our online marketplaces, a third-party marketplace, or directly with a merchant for which we earn a commission.
Any material increase in receivable holdbacks or reserve requirements could have a material impact on our cash flow and available liquidity. On November 7, 2023, the Board approved an $80.0 million fully backstopped rights offering (the "Rights Offering") to our stockholders of record of our Common Stock (the "Common Stock"), as of the close of business on November 20, 2023.
Any material increase in receivable holdbacks or reserve requirements could have a material impact on our cash flow and available liquidity. On November 7, 2023, the Board approved the Rights Offering to our stockholders of record of our Common Stock, as of the close of business on November 20, 2023.
Net cash provided by (used in) financing activities For the year ended December 31, 2023, our net cash used in financing activities was $35.7 million as compared with the prior year period of $34.4 million.
Net cash provided by (used in) financing activities For the year ended December 31, 2024, our net cash provided by financing activities was $47.8 million as compared with net cash used in financing activities of $35.7 million in the prior period.
GAAP financial measure, Net cash provided by (used in) operating activities, for those periods are as follows (in thousands): Year Ended December 31, 2023 2022 Net cash provided by (used in) operating activities $ (77,985) $ (135,987) Purchases of property and equipment and capitalized software (19,285) (36,168) Free cash flow $ (97,270) $ (172,155) Our revenue-generating transactions are primarily structured such that we collect cash up-front from customers and pay third-party merchants at a later date, either based upon the customer's redemption of the related voucher or fixed payment terms, which are generally biweekly, throughout the term of the merchant's offering.
Our free cash flow for the years ended December 31, 2024 and 2023 and reconciliations to the most comparable GAAP financial measure, Net cash provided by (used in) operating activities, for those periods are as follows (in thousands): Year Ended December 31, 2024 2023 Net cash provided by (used in) operating activities $ 55,894 $ (77,985) Purchases of property and equipment and capitalized software (15,333) (19,285) Free cash flow $ 40,561 $ (97,270) Our revenue-generating transactions are primarily structured such that we collect cash up-front from customers and pay third-party merchants at a later date, either based upon the customer's redemption of the related voucher or fixed payment terms, which are generally biweekly, throughout the term of the merchant's offering.
Revenue and gross profit also had favorable impacts of $2.3 million and $2.1 million from year-over-year changes in foreign currency exchange rates.
Revenue and gross profit had favorable impacts of $1.0 million and $0.9 million from year-over-year changes in foreign currency exchange rates.
Our gross billings, units and TTM active customers for the years ended December 31, 2023 and 2022 were as follows (in thousands): Year Ended December 31, 2023 2022 Gross billings $ 1,645,058 $ 1,822,902 Units 41,368 50,614 TTM Active customers 16,501 18,780 Financial Metrics • Revenue is earned through transactions which we generate commissions by selling goods or services on behalf of third-party merchants.
Our gross billings, units and TTM active customers for the years ended December 31, 2024 and 2023 were as follows (in thousands): Year Ended December 31, 2024 2023 Gross billings $ 1,558,203 $ 1,645,058 Units 36,640 41,368 TTM Active customers 15,432 16,501 Financial Metrics • Revenue is earned through transactions which we generate commissions by selling goods or services on behalf of third-party merchants.
GAAP financial measure, see Liquidity and Capital Resources below. Foreign currency exchange rate neutral operating results . Foreign currency exchange rate neutral operating results show current period operating results as if foreign currency exchange rates had remained the same as those in effect in the prior year period.
Foreign currency exchange rate neutral operating results show current period operating results as if foreign currency exchange rates had remained the same as those in effect in the prior year period.
GAAP and certain of those metrics are considered non-GAAP financial measures. As our business evolves, we may make changes to the key financial and operating metrics that we use to measure our business. For further information and reconciliations to the most applicable financial measures under U.S.
As our business evolves, we may make changes to the key financial and operating metrics that we use to measure our business. For further information and reconciliations to the most applicable financial measures under GAAP, refer to our discussion under Non-GAAP Financial Measures in the Results of Operations section.
Further, when measuring fair value based on discounted cash flows, we make assumptions about risk-adjusted discount rates, including the weighted average cost of capital; rates of increase in revenue, cost of revenue and operating expenses; rates of long-term growth; working capital levels; and income tax rates. Valuations are performed by management or third-party valuation specialists under management's supervision, where appropriate.
Further, when measuring fair value based on discounted 55 cash flows, we make assumptions about risk-adjusted discount rates, including the weighted average cost of capital; rates of increase in revenue, cost of revenue and operating expenses; rates of long-term growth; working capital levels; and income tax rates.
We believe that the estimated fair values used in impairment tests are based on reasonable assumptions that marketplace participants would use. However, such assumptions are inherently uncertain and actual results could differ materially from those estimates.
Valuations are performed by management or third-party valuation specialists under management's supervision, where appropriate. We believe that the estimated fair values used in impairment tests are based on reasonable assumptions that marketplace participants would use. However, such assumptions are inherently uncertain and actual results could differ materially from those estimates.
Our net cash flows from operating, investing and financing activities for the years ended December 31, 2023 and 2022 were as follows (in thousands): Year Ended December 31, 2023 2022 Cash provided by (used in): Operating activities $ (77,985) $ (135,987) Investing activities (1,397) (38,845) Financing activities $ (35,690) $ (34,407) Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by operating activities, less purchases of property and equipment and capitalized software.
See Item 1, Note 14, Income Taxes, for additional information. 52 Our net cash flows from operating, investing and financing activities for the years ended December 31, 2024 and 2023 were as follows (in thousands): Year Ended December 31, 2024 2023 Cash provided by (used in): Operating activities $ 55,894 $ (77,985) Investing activities (6,812) (1,397) Financing activities $ 47,790 $ (35,690) Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by operating activities, less purchases of property and equipment and capitalized software.
(2) Includes a $25.8 million remeasurement of our investment in SumUp during the year ended December 31, 2023. Refer to Item 8, Note 5, Investments, for additional information. Free cash flow . Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by operating activities less purchases of property and equipment and capitalized software.
Refer to Item 8, Note 5, Investments, for additional information. Free cash flow . Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by operating activities less purchases of property and equipment and capitalized software.
The preparation of Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts and classifications of assets and liabilities, revenue and expenses, and related disclosure of contingent liabilities.
Our significant accounting policies are discussed in Item 8, Note 2, Summary of Significant Accounting Policies , in the notes to the Consolidated Financial Statements. The preparation of Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts and classifications of assets and liabilities, revenue and expenses, and related disclosure of contingent liabilities.
In connection with the Fourth Amendment, we repaid $27.3 million of outstanding borrowings. Prior to entering into the Fourth Amendment, our access to the full capacity of our Credit Agreement was partially restricted and our liquidity impacted accordingly.
Prior to entering into the Fourth Amendment, our access to the full capacity of our Credit Agreement was partially restricted and our liquidity impacted 53 accordingly.
Marketing and Contribution Profit International marketing and contribution profit for the years ended December 31, 2023 and 2022 were as follows (dollars in thousands): Year Ended December 31, % Change 2023 2022 2023 vs 2022 Marketing $ 37,327 $ 45,369 (17.7) % % of Gross Profit 30.7 % 30.5 % Contribution Profit $ 84,344 $ 103,301 (18.4) % Comparison of the Years Ended December 31, 2023 and 2022: International marketing expense decreased for the year ended December 31, 2023 compared with the prior year primarily due to traffic declines and a lower investment in our online marketing spend.
Marketing and Contribution Profit International marketing and contribution profit for the years ended December 31, 2024 and 2023 were as follows (dollars in thousands): Year Ended December 31, % Change 2024 2023 2024 vs 2023 Marketing $ 31,111 $ 37,327 (16.7) % % of Revenue 26.7 % 27.7 % Contribution Profit $ 75,031 $ 84,344 (11.0) % Comparison of the Years Ended December 31, 2024 and 2023: International marketing expense and marketing expense as a percentage of revenue decreased for the year ended December 31, 2024 compared to the prior year period, primarily due to traffic declines and a lower investment in our online marketing spend.
We expect that our consolidated effective tax rate in future periods may continue to differ significantly from the U.S. federal income tax rate as a result of our tax obligations in jurisdictions with profits and valuation allowances in jurisdictions with losses See Item 8, Note 14, Income Taxes , for additional information relating to tax audits and assessments and regulatory and legal developments that may impact our business and results of operations in the future.
We expect that our consolidated effective tax rate in future periods may continue to differ significantly from the U.S. federal income tax rate as a result of our tax obligations in jurisdictions with profits and valuation allowances in jurisdictions with losses.
GAAP, refer to our discussion under Non-GAAP Financial Measures in the Results of Operations section. 39 Operating Metrics • Gross billings is the total dollar value of customer purchases of goods and services. Gross billings is presented net of customer refunds, order discounts and sales and related taxes.
Operating Metrics • Gross billings is the total dollar value of customer purchases of goods and services. Gross billings is presented net of customer refunds, order discounts and sales and related taxes.
The favorable impacts from our 2022 Restructuring Plan were partially offset by improved days payable outstanding from December 31, 2022 to December 31, 2023. Net cash provided by (used in) investing activities For the year ended December 31, 2023, our net cash used in investing activities was $1.4 million as compared with the prior year period of $38.8 million.
Net cash provided by (used in) investing activities For the year ended December 31, 2024, our net cash used in investing activities was $6.8 million as compared with net cash used in investing activities of $1.4 million in the prior period.
Consolidated Provision (Benefit) for Income Taxes Comparison of the Years Ended December 31, 2023 and 2022: Provision (benefit) for income taxes for the years ended December 31, 2023 and 2022 was as follows (dollars in thousands): Year Ended December 31, % Change 2023 2022 2023 vs 2022 Provision (benefit) for income taxes $ 9,508 $ 42,410 (77.6) % Effective tax rate (21.9) % (22.1) % Our U.S.
See Item 8, Note 5, Investments, for additional information. 49 Consolidated Provision (Benefit) for Income Taxes Comparison of the Years Ended December 31, 2024 and 2023: Provision (benefit) for income taxes for the years ended December 31, 2024 and 2023 was as follows (dollars in thousands): Year Ended December 31, % Change 2024 2023 2024 vs 2023 Provision (benefit) for income taxes $ 26,123 $ 9,508 174.7 % Effective tax rate (86.0) % (21.9) % Our U.S.
We were not subject to any early termination penalties under the Credit Agreement. The payment of the Payoff Amount terminated our obligations under the Credit Agreement, except for ordinary and customary survival terms. In addition, we retained access to letters of credit, originally available under the Credit Agreement.
The terms of the Rights Offering permit the Company to use the proceeds for general corporate purposes, including the repayment of debt. We were not subject to any early termination penalties under the Credit Agreement. The payment of the Payoff Amount terminated our obligations under the Credit Agreement, except for ordinary and customary survival terms.
Repurchases will be made in compliance with SEC rules and other legal requirements and may be made, in part, under a Rule 10b5-1 plan, which permits share repurchases when we might otherwise be precluded from doing so.
Repurchases will be made in compliance with SEC rules and other legal requirements and may be made, in part, under a Rule 10b5-1 plan, which permits share repurchases when we might otherwise be precluded from doing so. 54 Contractual Obligations and Commitments For additional information on our commitments for other financing arrangements, future lease payments and purchase obligations, see Item 8, Note 7, Financing Arrangements , Note 8, Leases and Note 9, Commitments and Contingencies, for additional information.
Other income (expense), net for the years ended December 31, 2023 and 2022 was as follows (dollars in thousands): Year Ended December 31, 2023 2022 Other income (expense), net $ (25,174) $ (24,155) 47 Comparison of the Years Ended December 31, 2023 and 2022: The change in Other income (expense), net for the year ended December 31, 2023 compared with the prior year is related to a remeasurement of our investment in SumUp of $25.8 million in the year ended December 31, 2023, We had no similar activity in the prior year period.
Other income (expense), net for the years ended December 31, 2024 and 2023 was as follows (dollars in thousands): Year Ended December 31, 2024 2023 Other income (expense), net $ (39,185) $ (25,174) Comparison of the Years Ended December 31, 2024 and 2023: The change in Other income (expense), net for the year ended December 31, 2024 compared with the prior year period is primarily related to a $40.3 million change in foreign currency gains and losses.
Comparison of the Years ended December 31, 2023 and 2022: Marketing expense and marketing expense as a percentage of gross profit decreased for the year ended December 31, 2023 compared with the prior year due to a decrease in marketing-related payroll costs, traffic declines, and a lower investment in our online marketing spend.
Comparison of the Years ended December 31, 2024 and 2023: Marketing expense and marketing expense as a percentage of gross profit increased for the year ended December 31, 2024 compared with the prior year period, due to an increased investment in our North America performance marketing campaigns.
The following table presents the above financial metrics for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, 2023 2022 Revenue $ 514,910 $ 599,085 Gross profit 450,664 522,824 Adjusted EBITDA 55,453 (15,113) Free cash flow (97,270) (172,155) Operating Expenses • Marketing expense consists primarily of online marketing costs, such as search engine marketing, advertising on social networking sites and affiliate programs, and offline marketing costs, such as television.
For further information and a reconciliation to Net cash provided by (used in) operating activities, refer to our discussion in the Liquidity and Capital Resources section. 42 The following table presents the above financial metrics for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 Revenue $ 492,557 $ 514,910 Gross profit 444,306 450,664 Contribution profit 300,099 340,159 Adjusted EBITDA 69,308 55,453 Free cash flow 40,561 (97,270) Operating Expenses • Marketing expense consists primarily of online marketing costs, such as search engine marketing, advertising on social networking sites and affiliate programs, and offline marketing costs, such as television.
We are focused on improving our marketplace offering and merchant value proposition by exploring opportunities to better balance the needs of merchant partners, customers and Groupon, for example, by offering flexible deal structures. Acquiring and retaining customers .
Merchants can withdraw their offerings from our marketplace at any time, and their willingness to continue offering services through our marketplace depends on the effectiveness of our marketplace offering. We are focused on improving our marketplace offering and merchant value proposition by exploring opportunities to better balance the needs of merchant partners, customers and Groupon. Acquiring and retaining customers .
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. The following is a reconciliation of Adjusted EBITDA to the most comparable U.S.
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. For the foreign VAT assessments, we also considered the fact that we ceased operations in Portugal in 2016 and it is not part of our ongoing business.
In addition, there was an $8.0 million favorable impact on gross billings from year-over-year changes in foreign currency exchange rates. 45 Financial Metrics International segment revenue, cost of revenue and gross profit for the years ended December 31, 2023 and 2022 were as follows (dollars in thousands): Year Ended December 31, % Change 2023 2022 2023 vs 2022 Revenue Local $ 111,543 $ 128,295 (13.1) % Goods 14,961 23,742 (37.0) Travel 8,454 10,779 (21.6) Total revenue $ 134,958 $ 162,816 (17.1) Cost of revenue Local $ 9,903 $ 10,647 (7.0) % Goods 2,305 2,080 10.8 Travel 1,079 1,419 (24.0) Total cost of revenue $ 13,287 $ 14,146 (6.1) Gross profit Local $ 101,640 $ 117,648 (13.6) % Goods 12,656 21,662 (41.6) Travel 7,375 9,360 (21.2) Total gross profit $ 121,671 $ 148,670 (18.2) Gross margin (1) 26.8 % 27.8 % % of Consolidated revenue 26.2 % 27.2 % % of Consolidated cost of revenue 20.7 18.5 % of Consolidated gross profit 27.0 28.4 (1) Represents the percentage of gross billings that we retained after deducting the merchant's share from gross billings.
In addition, there was a $3.4 million favorable impact on gross billings from year-over-year changes in foreign currency exchange rates. 47 Financial Metrics International segment revenue, cost of revenue and gross profit for the years ended December 31, 2024 and 2023 were as follows (dollars in thousands): Year Ended December 31, % Change 2024 2023 2024 vs 2023 Revenue Local $ 99,333 $ 111,543 (10.9) % Goods 10,929 14,961 (27.0) Travel 6,223 8,454 (26.4) Total revenue $ 116,485 $ 134,958 (13.7) Cost of revenue Local $ 7,889 $ 9,903 (20.3) % Goods 1,691 2,305 (26.6) Travel 763 1,079 (29.3) Total cost of revenue $ 10,343 $ 13,287 (22.2) Gross profit Local $ 91,444 $ 101,640 (10.0) % Goods 9,238 12,656 (27.0) Travel 5,460 7,375 (26.0) Total gross profit $ 106,142 $ 121,671 (12.8) % of Consolidated revenue 23.6 % 26.2 % % of Consolidated cost of revenue 21.4 20.7 % of Consolidated gross profit 23.9 27.0 Comparison of the Years Ended December 31, 2024 and 2023: International revenue, cost of revenue and gross profit decreased by $18.5 million, $2.9 million and $15.5 million for the year ended December 31, 2024 compared with the prior year period.
On January 22, 2024, we announced the closing of our $80.0 million fully backstopped Rights Offering for shares of our Common Stock, par value $0.0001 per share. Pursuant to the terms of the Rights Offering, 7,079,646 shares of Common Stock were purchased at $11.30 per share, generating $80.0 million in gross proceeds to the Company.
Pursuant to the terms of the Rights Offering, 7,079,646 shares of Common Stock were purchased at $11.30 per share, generating $80.0 million in gross proceeds to the Company. On February 12, 2024, we prepaid the Payoff Amount to terminate all commitments to extend further credit under the Credit Agreement using our $80.0 million in proceeds received from the Rights Offering.
Those measures are intended to facilitate comparisons to our historical performance. 49 The following table represents the effect on our Consolidated Statements of Operations from changes in exchange rates versus the U.S. dollar for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, 2023 Year Ended December 31, 2022 At Avg. 2022 Rates (1) Exchange Rate Effect (2) As Reported At Avg. 2021 Rates (1) Exchange Rate Effect (2) As Reported Gross billings $ 1,637,091 $ 7,967 $ 1,645,058 $ 1,888,919 $ (66,017) $ 1,822,902 Revenue 512,576 2,334 514,910 617,559 (18,474) 599,085 Cost of revenue 64,014 232 64,246 77,813 (1,552) 76,261 Gross profit 448,562 2,102 450,664 539,746 (16,922) 522,824 Marketing 109,600 905 110,505 154,803 (5,572) 149,231 Selling, general and administrative 347,683 2,722 350,405 499,905 (18,530) 481,375 Goodwill impairment — — — 39,518 (4,094) 35,424 Long-lived asset impairment — — — 13,704 (1,445) 12,259 Restructuring charges 8,183 (177) 8,006 12,884 (534) 12,350 Income (loss) from operations $ (16,904) $ (1,348) $ (18,252) $ (181,068) $ 13,253 $ (167,815) (1) Represents the financial statement balances that would have resulted had exchange rates in the reporting period been the same as those in effect in the prior year period.
Those measures are intended to facilitate comparisons to our historical performance. 51 The following table represents the effect on our Consolidated Statements of Operations from changes in exchange rates versus the U.S. dollar for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 Year Ended December 31, 2023 At Avg. 2023 Rates (1) Exchange Rate Effect (2) As Reported At Avg. 2022 Rates (1) Exchange Rate Effect (2) As Reported Gross billings $ 1,554,825 $ 3,378 $ 1,558,203 $ 1,637,091 $ 7,967 $ 1,645,058 Revenue 491,600 957 492,557 512,576 2,334 514,910 Cost of revenue 48,201 50 48,251 64,014 232 64,246 Gross profit 443,399 907 444,306 448,562 2,102 450,664 Marketing 144,144 63 144,207 109,600 905 110,505 Selling, general and administrative 294,628 771 295,399 347,683 2,722 350,405 Restructuring charges 959 107 1,066 8,183 (177) 8,006 (Gain) on sale of assets (5,160) — (5,160) — — — Income (loss) from operations $ 8,828 $ (34) $ 8,794 $ (16,904) $ (1,348) $ (18,252) (1) Represents the financial statement balances that would have resulted had exchange rates in the reporting period been the same as those in effect in the prior year period.
North America marketing and contribution profit for the years ended December 31, 2023 and 2022 were as follows (dollars in thousands): Year Ended December 31, % Change 2023 2022 2023 vs 2022 Marketing $ 73,178 $ 103,862 (29.5) % % of Gross Profit 22.2 % 27.8 % Contribution Profit $ 255,815 $ 270,292 (5.4) % Comparison of the Years Ended December 31, 2023 and 2022: North America marketing expense and marketing expense as a percentage of gross profit decreased for the year ended December 31, 2023 compared with the prior year primarily driven by a decrease in marketing-related payroll, traffic declines, and a lower investment in our online marketing spend. 43 North America contribution profit decreased for the year ended December 31, 2023 compared with the prior year primarily due to a decrease in gross profit. 44 International Operating Metrics International segment gross billings, units and TTM active customers for the years ended December 31, 2023 and 2022 were as follows (in thousands, except percentages): Year Ended December 31, % Change 2023 2022 2023 vs 2022 Gross billings Local $ 380,797 $ 402,192 (5.3) % Goods 80,062 123,863 (35.4) Travel 42,953 58,637 (26.7) Total gross billings $ 503,812 $ 584,692 (13.8) Units Local 13,032 14,381 (9.4) % Goods 2,866 5,210 (45.0) Travel 241 361 (33.2) Total units 16,139 19,952 (19.1) TTM Active customers 6,210 7,503 (17.2) % Comparison of the Years Ended December 31, 2023 and 2022: International gross billings, units and TTM active customers decreased by $80.9 million, 3.8 million and 1.3 million for the year ended December 31, 2023 compared with the prior year.
Marketing and Contribution Profit North America marketing and contribution profit for the years ended December 31, 2024 and 2023 were as follows (dollars in thousands): Year Ended December 31, % Change 2024 2023 2024 vs 2023 Marketing $ 113,096 $ 73,178 54.5 % % of Revenue 30.1 % 19.3 % Contribution Profit $ 225,068 $ 255,815 (12.0) % Comparison of the Years Ended December 31, 2024 and 2023: North America marketing expense and marketing expense as a percentage of revenue increased for the year ended December 31, 2024 compared with the prior year period, primarily driven by an increased investment in our performance marketing campaigns. 45 North America contribution profit decreased for the year ended December 31, 2024 compared with the prior year period, primarily due to an increase in marketing expense. 46 International Operating Metrics International segment gross billings, units and TTM active customers for the years ended December 31, 2024 and 2023 were as follows (in thousands, except percentages): Year Ended December 31, % Change 2024 2023 2024 vs 2023 Gross billings Local $ 332,795 $ 380,797 (12.6) % Goods 60,530 80,062 (24.4) Travel 32,106 42,953 (25.3) Total gross billings $ 425,431 $ 503,812 (15.6) Units Local 10,764 13,032 (17.4) % Goods 1,688 2,866 (41.1) Travel 180 241 (25.2) Total units 12,632 16,139 (21.7) TTM Active customers 5,143 6,210 (17.2) % Comparison of the Years Ended December 31, 2024 and 2023: International gross billings, units and TTM active customers decreased by $78.4 million, 3.5 million and 1.1 million for the year ended December 31, 2024 compared with the prior year period.
For the years ended December 31, 2023 and 2022, special charges and credits included charges related to our 2022 and 2020 restructuring plans 48 and goodwill and long-lived asset impairments.
For the years ended December 31, 2024 and 2023, special charges and credits included charges related to our Italy, 2022 and 2020 Restructuring Plans, gain on sale of assets and foreign VAT assessments.
The year-over-year change was primarily driven by $32.2 million in payments of borrowings under our revolving credit facility during the year ended December 31, 2023 compared with $40.0 million in proceeds and $65.0 million in payments during the year ended December 31, 2022, In March 2023, we entered into the Fourth Amendment to the Credit Agreement, which reduced borrowing capacity under our senior secured revolving credit facility from $150.0 million to $75.0 million.
Matters related to the Rights Offering and Credit Agreement In March 2023, we entered into the Fourth Amendment to the Credit Agreement, which reduced borrowing capacity under our senior secured revolving credit facility from $150.0 million to $75.0 million. In connection with the Fourth Amendment, we repaid $27.3 million of outstanding borrowings.
We will continue to monitor the impact of macroeconomic conditions on our business. 41 Results of Operations North America Operating Metrics North America segment gross billings, units and TTM active customers for the years ended December 31, 2023 and 2022 were as follows (in thousands, except percentages): Year Ended December 31, % Change 2023 2022 2023 vs 2022 Gross billings Local $ 971,313 $ 1,019,960 (4.8) % Goods 88,987 133,262 (33.2) Travel 80,946 84,988 (4.8) Total gross billings $ 1,141,246 $ 1,238,210 (7.8) Units Local 21,483 24,986 (14.0) % Goods 3,412 5,289 (35.5) Travel 334 387 (13.6) Total units 25,229 30,662 (17.7) TTM Active customers 10,291 11,277 (8.7) % Comparison of the Years Ended December 31, 2023 and 2022: North America gross billings, units and TTM active customers decreased by $97.0 million, 5.4 million and 1.0 million for the year ended December 31, 2023 compared with the prior year.
To minimize the impact of macroeconomic conditions on our business, we are focusing on building long-term relationships with local merchants to enhance our inventory selection, improving the customer experience through inventory curation and expanding convenience in order to drive customer demand and purchase frequency. 43 Results of Operations North America Operating Metrics North America segment gross billings, units and TTM active customers for the years ended December 31, 2024 and 2023 were as follows (in thousands, except percentages): Year Ended December 31, % Change 2024 2023 2024 vs 2023 Gross billings Local $ 999,836 $ 971,313 2.9 % Goods 53,589 88,987 (39.8) Travel 79,347 80,946 (2.0) Total gross billings $ 1,132,772 $ 1,141,246 (0.7) Units Local 21,805 21,483 1.5 % Goods 1,882 3,412 (44.8) Travel 321 334 (3.9) Total units 24,008 25,229 (4.8) TTM Active customers 10,289 10,291 — % Comparison of the Years Ended December 31, 2024 and 2023: North America gross billings and units decreased by $8.5 million and 1.2 million, while TTM active customers remained flat for the year ended December 31, 2024 compared with the prior year period.
See Item 8, Note 7, Financing Arrangements for additional information regarding the Credit Agreement and Item 8, Note 10 , Stockholders' Equity (Deficit) for additional information regarding the Rights Offering. The accompanying Consolidated Financial Statements are prepared in accordance with U.S.
In addition, we retained access to letters of credit, originally available under the Credit Agreement. See Item 8, Note 7, Financing Arrangements, for additional information regarding the Credit Agreement and Item 8, Note 10 , Stockholders' Equity (Deficit), for additional information regarding the Rights Offering.
Consolidated Operating Expenses Operating expenses for the years ended December 31, 2023 and 2022 were as follows (dollars in thousands): Year Ended December 31, % Change 2023 2022 2023 vs 2022 Marketing $ 110,505 $ 149,231 (26.0) % Selling, general and administrative (1) 350,405 481,375 (27.2) Goodwill impairment — 35,424 (100.0) Long-lived asset impairment — 12,259 (100.0) Restructuring and related charges 8,006 12,350 (35.2) Total Operating expenses $ 468,916 $ 690,639 (32.1) % of Gross profit: Marketing 24.5 % 28.5 % Selling, general and administrative 77.8 % 92.1 % (1) The years ended December 31, 2023 and 2022 includes $14.3 million and $28.6 million of stock-based compensation expense and $26.2 million and $30.1 million of dep reciation and amortization expense.
International contribution profit decreased for the year ended December 31, 2024 compared with the prior year period, primarily due to a decrease in revenue. 48 Consolidated Operating Expenses Operating expenses for the years ended December 31, 2024 and 2023 were as follows (dollars in thousands): Year Ended December 31, % Change 2024 2023 2024 vs 2023 Marketing $ 144,207 $ 110,505 30.5 % Selling, general and administrative (1) 295,399 350,405 (15.7) Restructuring and related charges 1,066 8,006 (86.7) (Gain) on sale of assets (5,160) — — Total operating expenses $ 435,512 $ 468,916 (7.1) % of Gross profit: Marketing 32.5 % 24.5 % Selling, general and administrative 66.5 % 77.8 % (1) The years ended December 31, 2024 and 2023 include $26.6 million and $14.3 million of stock-based compensation expense and $17.0 million and $26.2 million of dep reciation and amortization expense.
See note 9, Commitments and Contingencies and Note 13, Restructuring and Related Charges for additional information. Includes $3.0 million of right-of-use assets - operating leases impairment for the year ended December 31, 2022. Refer to Item 8, Note 8, Leases and Note 13, Restructuring and Related Charges, for additional information.
Refer to Item 8, Note 11, Compensation Arrangements, for additional information. (2) Includes a settlement of $4.25 million related to our sublease to Uptake for the year ended December 31, 2023. Refer to Item 8, Note 9, Commitments and Contingencies and Item 8, Note 13, Restructuring and Related Charges, for additional information.
The year-over-year change was primarily driven by proceeds from the sale of SumUp of $18.9 million and fewer purchases of property and equipment and capitalized software during the year ended December 31, 2023.
The change is primarily driven by proceeds from the sale of SumUp of $18.9 million in the prior year period, with no comparable activity in the current year period, partially offset by $9.1 million of net proceeds from the sale intangible assets and fewer purchases of property and equipment and capitalized software during the year.
Revenue also includes commissions we earn when customers make purchases with retailers using digital coupons accessed through our digital properties. • Gross profit reflects the net margin we earn after deducting our Cost of revenue from our Revenue. • Adjusted EBITDA is a non-GAAP financial measure that we define as Net income (loss) excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, and other special charges and credits, including items that are unusual in nature or infrequently occurring.
See Item 8, Note 18, Segment and Geographical Information , for additional information. • Adjusted EBITDA is a non-GAAP financial measure that we define as Net income (loss) excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, and other special charges and credits, including items that are unusual in nature or infrequently occurring.
These declines were primarily attributable to a decline in our Goods category and an overall decrease in demand.
The Local category decrease was primarily attributable to the exit of our Local business in Italy and a decline in site traffic. The decline in our Goods and Travel categories were primarily attributable to an overall decline in site traffic.
(2) Represents the increase or decrease in the reported amount resulting from changes in exchange rates from those in effect in the prior year period.
(2) Represents the increase or decrease in the reported amount resulting from changes in exchange rates from those in effect in the prior year period. Liquidity and Capital Resources Our principal source of liquidity is our cash balance totaling $228.8 million as of December 31, 2024.
Our net cash used in operating activities has improved year-over-year, from $78.0 million and $136.0 million for the years ended December 31, 2023 and December 31, 2022, with net cash provided by operating activities of $54.5 million and $15.9 million for the three months ended December 31, 2023 and December 31, 2022.
Net cash provided by (used in) operating activities For the year ended December 31, 2024, our net cash provided by operating activities was $55.9 million as compared with net cash used in operating activities of $78.0 million in the prior period.
Critical Accounting Estimates Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP. Our significant accounting policies are discussed in Item 8, Note 2, Summary of Significant Accounting Policies , in the notes to the Consolidated Financial Statements.
Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as of December 31, 2024. Critical Accounting Estimates Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP.
See Item 8, Note 13, Restructuring and Related Charges , for additional information. How We Measure Our Business We use several operating and financial metrics to assess the progress of our business and make decisions on where to allocate capital, time and technology investments. Certain of the financial metrics are reported in accordance with U.S.
How We Measure Our Business We use several operating and financial metrics to assess the progress of our business and make strategic decisions. Certain of the financial metrics are reported in accordance with GAAP and certain of those metrics are considered non-GAAP financial measures.
Marketing expense as a percentage of gross profit remained relatively flat for the year ended December 31, 2023 compared with the prior year. 46 International contribution profit decreased for the year ended December 31, 2023 compared with the prior year primarily due to a decrease in gross profit.
SG&A and SG&A as a percentage of gross profit decreased for the year ended December 31, 2024 compared with the prior year period, primarily due to a decrease in cloud computing costs and a reduction in headcount as a result of our 2022 Restructuring Plan.
Our cash balances fluctuate significantly throughout the year based on many variables, including changes in gross billings, the timing of payments to merchants and suppliers and the mix of transactions between Goods and Local. 50 Net cash provided by (used in) operating activities For the year ended December 31, 2023, our net cash used in operating activities was $78.0 million as compared with the prior year period of $136.0 million.
Our cash balances fluctuate significantly throughout the year based on many variables, including changes in gross billings and the timing of payments to merchants and suppliers.
We plan to grow our revenue by building long-term relationships with local merchants to strengthen our inventory selection and by enhancing the customer experience through inventory curation and improved convenience in order to drive customer demand and purchase frequency. 2022 Cost Savings Plan In August 2022, we initiated the 2022 Cost Savings Plan, including the first phase initiated August 2022, the second January 2023 and the third July 2023, which is designed to reduce our expense structure and align with our go-forward business and financial objectives.
We plan to grow our revenue by building long-term relationships with local merchants to strengthen our online selection and by enhancing the customer reach through experience curation and improved convenience in order to drive customer demand and purchase frequency. We are investing significant resources in making our platform more efficient, stable and agile.
In addition, free cash flow reflects the impact of the timing difference between when we are paid by customers and when we pay merchants and suppliers. Therefore, we believe it is important to view free cash flow as a complement to our Consolidated Statements of Cash Flows. For a reconciliation of free cash flow to the most comparable U.S.
Therefore, we believe it is important to view free cash flow as a complement to our Consolidated Statements of Cash Flows. For a reconciliation of free cash flow to the most comparable GAAP financial measure, see Liquidity and Capital Resources below. Foreign currency exchange rate neutral operating results .
Accordingly, management has concluded that there is no longer substantial doubt about our ability to continue as a going concern. As of December 31, 2023, we had $40.4 million in cash held by our international subsidiaries, which is primarily denominated in Euros, British Pounds Sterling, Canadian dollars, Indian Rupees, Polish Zloty, Swiss Franc, and, to a lesser extent, Australian dollars.
Other Liquidity and Capital Resource matters As of December 31, 2024, we had $85.7 million in cash held by our international subsidiaries, which is primarily denominated in British Pounds Sterling, Euros, Indian Rupees and Australian dollars.
GAAP financial measure, Net income (loss) for the years ended December 31, 2023 and 2022 (dollars in thousands): Year Ended December 31, 2023 2022 Net income (loss) $ (52,934) $ (234,380) Adjustments: Stock-based compensation 14,481 30,006 Depreciation and amortization 51,218 62,663 Restructuring and related charges (1) 8,006 12,350 Goodwill impairment — 35,424 Long-lived asset impairment — 12,259 Other (income) expense, net (2) 25,174 24,155 Provision (benefit) for income taxes 9,508 42,410 Total adjustments 108,387 219,267 Adjusted EBITDA $ 55,453 $ (15,113) (1) Includes a settlement of $4.25 million related to Uptake for the year ended December 31, 2023.
We have not engaged in any revenue-generating or payroll-related activity in Portugal since ceasing those operations nor do we intend to engage in these activities in that jurisdiction in the future. 50 The following is a reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure, Net income (loss) for the years ended December 31, 2024 and 2023 (dollars in thousands): Year Ended December 31, 2024 2023 Net income (loss) $ (56,514) $ (52,934) Adjustments: Stock-based compensation (1) 26,734 14,481 Depreciation and amortization 30,900 51,218 Restructuring and related charges (2) 1,066 8,006 (Gain) on sale of assets (5,160) — Foreign VAT assessments (3) 6,974 — Other (income) expense, net (4) 39,185 25,174 Provision (benefit) for income taxes 26,123 9,508 Total adjustments 125,822 108,387 Adjusted EBITDA $ 69,308 $ 55,453 (1) Stock-based compensation excludes expense related to the 2024 Executive PSUs that are required to be settled in cash.
Restructuring and related charges decreased for the year ended December 31, 2023 compared with the prior year, primarily due to impairment recognized in the year ended December 31, 2022 related to our right-of-use assets - operating leases for our 2020 Restructuring Plan. We had no similar activity in the current year period.
Restructuring and related charges decreased for the year ended December 31, 2024 compared with the prior year period, primarily due to a decrease in severance and benefit costs related to our 2022 Restructuring Plan, partially offset by an increase in charges related to the Italy Restructuring Plan. See Item 8, Note 13, Restructuring and Related Charges, for additional information.
The cash outflow in the year ended December 31, 2023 ha s improved compared to the prior year period due to our cost cutting measures as a result of the impacts of our 2022 Restructuring Plan initiated in August 2022.
The improved cash flow from operating activities is primarily due to a reduction in headcount as a result of the impacts of our 2022 Restructuring Plan.
Removed
The 2022 Cost Savings Plan included the 2022 Restructuring Plan, as well as other planned savings to be achieved through other actions, such as future reductions in our facilities footprint at natural lease terminations (or by exercising existing options in leases), renegotiating contractual arrangements with certain service providers and continuing to make elective decisions to eliminate vacant positions rather than rehire.
Added
By improving our technology, our customer base can enjoy a modernized experience along with seamless execution of new product innovation, improved customer experience and customer satisfaction. Our platform migrations are strategic investments in our ability to innovate faster, serve merchants better, and create more engaging experiences for our customers.
Removed
The 2022 Restructuring Plan is expected to include an overall reduction of approximately 1,150 positions globally, with the majority of these reductions completed as of March 31, 2023 and the remainder expected to occur by the end of 2024. In connection with these actions, we expect to record total pre-tax charges of $22.0 million to $24.1 million.
Added
Revenue also includes commissions we earn when customers make purchases with retailers using digital coupons accessed through our digital properties. • Gross profit reflects the net margin we earn after deducting our Cost of revenue from our Revenue. • Contribution Profit is our measure of segment profitability, defined as net revenues less cost of sales and marketing expense.
Removed
A majority of the pre-tax charges are expected to be paid in cash and relate to employee severance and compensation benefits, with an immaterial amount of charges related to other exit costs. We have incurred total pretax charges of $21.4 million since the inception of the 2022 Restructuring Plan.
Added
As a result of favorable refund rates and our supply transformation efforts, our Local category experienced growth in gross billings, active customers and units.
Removed
For further 40 information and a reconciliation to Net cash provided by (used in) operating activities, refer to our discussion in the Liquidity and Capital Resources section.
Added
As a result of favorable refund rates and our supply transformation efforts, our Local category experienced revenue growth. The Local category growth is offset by a de-emphasis on our Goods category evidenced by a decrease of our Goods active customers that resulted in fewer unit sales and lower gross billings year over year.
Removed
Merchants can withdraw their offerings from our marketplace at any time, and their willingness to continue offering services through our marketplace depends on the effectiveness of our marketplace offering.
Added
The decrease in cost of revenue is primarily due to a decrease in amortization of internally-developed software relating to customer-facing applications. Gross profit increased due to revenue remaining relatively flat and a decrease in cost of revenue.
Removed
Comparison of the Years Ended December 31, 2023 and 2022: North America revenue, cost of revenue and gross profit decreased by $56.3 million, $11.2 million and $45.2 million for the year ended December 31, 2023 compared with the prior year.
Added
The Local category decrease was primarily attributable to the exit of our Local business in Italy and a decline in site traffic. The decline in our Goods and Travel categories were primarily attributable to an overall decline in site traffic.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur costs are subject to inflationary pressures, and if those pressures become significant, we may not be able to offset such higher costs through price increases or other cost efficiency measures. Our inability or failure to do so could harm our business, financial condition and results of operations. 55
Biggest changeAdditionally, periods of increased inflation could negatively impact our business by driving up our operating costs. Our costs are subject to inflationary pressures, and if those pressures become significant, we may not be able to offset such higher costs through price increases or other cost efficiency measures.
We use a current market pricing model to assess the changes in the value of the U.S. dollar on foreign currency denominated monetary assets and liabilities. The primary assumption used in this model is a hypothetical 10% weakening or strengthening of the U.S. dollar against those currency exposures as of December 31, 2023 and 2022.
We use a current market pricing model to assess the changes in the value of the U.S. dollar on foreign currency denominated monetary assets and liabilities. The primary assumption used in this model is a hypothetical 10% weakening or strengthening of the U.S. dollar against those currency exposures as of December 31, 2024 and 2023.
Foreign Currency Exchange Risk We transact business in various foreign currencies other than the U.S. dollar, principally the Euro, British pound sterling, Canadian dollar, Indian Rupee, Polish Zloty, Swiss Franc, and, to a lesser extent, Australian dollar, which exposes us to foreign currency risk.
Foreign Currency Exchange Risk We transact business in various foreign currencies other than the U.S. dollar, principally the Euro, British pound sterling, Canadian dollar, Indian Rupee, Polish Zloty, Czech Koruna, and, to a lesser extent, Swiss Franc and Australian dollar, which exposes us to foreign currency risk.
Interest Rate Risk Our cash balance as of December 31, 2023 consists of bank deposits so exposure to market risk for changes in interest rates is limited.
Interest Rate Risk Our cash balance as of December 31, 2024 consists of bank deposits so exposure to market risk for changes in interest rates is limited.
For the year ended December 31, 2023, we derived approximately 26.2% of our revenue from our International segment. Revenue and related expenses generated from our international operations are generally denominated in the local currencies of the corresponding countries. The functional currencies of our subsidiaries that either operate or support these markets are generally the same as the corresponding local currencies.
For the year ended December 31, 2024, we derived approximately 23.6% of our revenue from our International segment. Revenue and related expenses generated from our international operations are generally denominated in the local currencies of the corresponding countries. The functional currencies of our subsidiaries that either operate or support these markets are generally the same as the corresponding local currencies.
This compares with a $111.9 million working capital deficit subject to foreign currency exposure as of December 31, 2022, for which a 10% adverse change would have resulted in a potential increase in this working capital deficit of $11.2 million.
This compares with a $21.7 million working capital deficit subject to foreign currency exposure as of December 31, 2023, for which a 10% adverse change would have resulted in a potential increase in this working capital deficit of $2.2 million.
As of December 31, 2023, our net working capital deficit (defined as current assets less current liabilities) from subsidiaries that are subject to foreign currency translation risk was $21.7 million. The potential increase in this working capital deficit from a hypothetical 10% adverse change in quoted foreign currency exchange rates would be $2.2 million.
As of December 31, 2024, our net working capital surplus (defined as current assets less current liabilities) from subsidiaries that are subject to foreign currency translation risk was $8.3 million. The potential increase in this working capital surplus from a hypothetical 10% adverse change in quoted foreign currency exchange rates would be $0.8 million.
We expect such discretionary spend limitations to continue, and if we do not see increased overall demand for discounted goods and services to help offset these limitations on individual merchants and customers, our business, financial condition and results of operations could be adversely impacted. Additionally, increased inflation could negatively impact our business by driving up our operating costs.
Inflation Risk Our business is affected by changes to our merchants' and customers' discretionary spend. We expect such discretionary spend limitations to continue, and if we do not see increased overall demand for discounted goods and services to help offset these limitations on individual merchants and customers, our business, financial condition and results of operations could be adversely impacted.
The 2026 Notes have an aggregate principal amount of $230.0 million (see Item 8, Note 7, Financing Arrangements ) and bear interest at a fixed rate, so we have no financial statement impact from changes in interest rates.
The 2026 Notes and 2027 Notes have an aggregate principal amount of $53.7 million and $197.3 million, respectively, and bear interest at a fixed rate, so we have no financial statement impact from changes in interest rates.
However, changes in market interest rates impact the fair value of the 2026 Notes along with other variables such as our credit spreads and the market price and volatility of our Common Stock. Our Credit Agreement provided for aggregate principal borrowings of up to $75.0 million.
However, changes in market interest rates impact the fair value of the 2026 Notes and 2027 Notes along with other variables such as our credit spreads and the market price and volatility of our Common Stock. See Item 8, Note 7, Financing Arrangements, for additional information.
Removed
As of December 31, 2023, we had $42.8 million of borrowings outstanding and $25.2 million of outstanding letters of credit under the Credit Agreement. See Item 7, Liquidity and Capital Resources, for additional information.
Added
Our inability or failure to do so could harm our business, financial condition and results of operations. 57
Removed
Because borrowings under the Credit Agreement bear interest at a variable rate, we are exposed to market risk relating to changes in interest rates if we borrow under the Credit Agreement. We have $9.5 million of lease obligations as of December 31, 2023.
Removed
Interest rates on existing leases typically do not change unless there is a modification to a lease agreement and, as such, we do not believe that the interest rate risk on the lease obligations is significant. Inflation Risk In light of the current inflationary environment, our business is being affected by changes to our merchants' and customers' discretionary spend.

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