Groupon, Inc.
Apr 28, 2016
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Groupon Announces First Quarter 2016 Results

Adds nearly 1 million new customers, boosts AEBITDA Guidance

CHICAGO--(BUSINESS WIRE)-- Groupon, Inc. (NASDAQ: GRPN) today announced financial results for the quarter ended March 31, 2016.

"We started the year making continued strides toward becoming a daily habit in local commerce," said CEO Rich Williams. "We sold the billionth Groupon in the first quarter and gained momentum on each of our strategic priorities, with customer growth and gross profit margin improvements highlighting our progress. Our business fundamentals and operational efficiency keep improving as our marketplace matures to become the largest and most effective of its kind."

First Quarter 2016 Summary

Definitions and reconciliations of all non-GAAP financial measures are included below in the section titled "Non-GAAP Financial Measures" and in the accompanying tables.

Highlights

Share Repurchase

During the first quarter 2016, Groupon repurchased 18,820,000 shares of its Class A common stock for an aggregate purchase price of $63.4 million. Up to $93.6 million of Class A common stock was available for repurchase under Groupon's share repurchase program as of March 31, 2016. In connection with the Company's $250 million senior convertible notes issuance in April 2016, the Board of Directors approved a $200 million increase to its share repurchase program and extended the program through April 2018. The timing and amount of any share repurchases are determined based on market conditions, share price and other factors, and the programs may be discontinued or suspended at any time.

Outlook

Groupon's outlook for 2016 reflects current foreign exchange rates, as well as expected marketing investments, continued progress on increasing Shopping margins, and a reduction of our international footprint. We continue to expect revenue of between $2.75 and $3.05 billion for the full year, and we are increasing the company's expected 2016 adjusted EBITDA range to between $85 million and $135 million.

Groupon Names Mike Randolfi as Chief Financial Officer

In a separate release today, Groupon announced that it has named Mike Randolfi as its new Chief Financial Officer, succeeding interim CFO Brian Kayman.

Conference Call

A conference call will be webcast live today at 4:00 p.m. CDT / 5:00 p.m. EDT, and will be available on Groupon's investor relations website at http://investor.groupon.com. This call will contain forward-looking statements and other material information regarding the Company's financial and operating results.

Groupon encourages investors to use its investor relations website as a way of easily finding information about the company. Groupon promptly makes available on this website, free of charge, the reports that the company files or furnishes with the SEC, corporate governance information (including Groupon's Global Code of Conduct), and select press releases and social media postings. Groupon uses its investor relations site (investor.groupon.com) and its blog (https://www.groupon.com/blog) as a means of disclosing material non-public information and for complying with its disclosure obligations under Reguation FD.

Non-GAAP Financial Measures

In addition to financial results reported in accordance with U.S. generally accepted accounting principles (U.S. GAAP), we have provided the following non-GAAP financial measures in this release and the accompanying tables: foreign exchange rate neutral operating results, adjusted EBITDA, non-GAAP net income attributable to common stockholders, non-GAAP earnings per share and free cash flow. These non-GAAP financial measures, which are presented on a continuing operations basis, are intended to aid investors in better understanding Groupon's current financial performance and its prospects for the future as seen through the eyes of management. We believe that these non-GAAP financial measures facilitate comparisons with our historical results and with the results of peer companies who present similar measures (although other companies may define non-GAAP measures differently than we define them, even when similar terms are used to identify such measures). However, non-GAAP financial measures are not intended to be a substitute for those reported in accordance with U.S. GAAP. For reconciliations of these measures to the most applicable financial measures under U.S. GAAP, see ''Non-GAAP Reconciliation Schedules'' and ''Supplemental Financial Information and Business Metrics'' included in the tables accompanying this release.

We exclude the following items from one or more of our non-GAAP financial measures:

Stock-based compensation. We exclude stock-based compensation because it is primarily non-cash in nature and we believe that non-GAAP financial measures excluding this item provide meaningful supplemental information about our operating performance and liquidity.

Acquisition-related expense (benefit), net. Acquisition-related expense (benefit), net is comprised of the change in the fair value of contingent consideration arrangements and external transaction costs related to business combinations, primarily consisting of legal and advisory fees. The composition of our contingent consideration arrangements and the impact of those arrangements on our operating results vary over time based on a number of factors, including the terms of our business combinations and the timing of those transactions. We exclude acquisition-related expense (benefit), net because we believe that non-GAAP financial measures excluding this item provide meaningful supplemental information about our operating performance and facilitate comparisons to our historical operating results.

Depreciation and amortization. We exclude depreciation and amortization expenses because they are non-cash in nature and we believe that non-GAAP financial measures excluding these items provide meaningful supplemental information about our operating performance and liquidity.

Interest and Other Non-Operating Items. Interest and other non-operating items include: interest income, interest expense, gains and losses related to minority investments, and foreign currency gains and losses. We exclude interest and other non-operating items from certain of our non-GAAP financial measures because we believe that excluding these items provides meaningful supplemental information about our core operating performance and facilitates comparisons to our historical operating results.

Items That Are Unusual in Nature or Infrequently Occurring. During the three months ended March 31, 2016, items that we believe to be unusual in nature or infrequently occurring were charges related to our restructuring program. We exclude items that are unusual in nature or infrequently occurring because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons to our historical results.

Descriptions of the non-GAAP financial measures included in this release and the accompanying tables are as follows:

Foreign exchange rate neutral operating results show our current period operating results as if foreign currency exchange rates had remained the same as those in effect in the prior-year period. We present foreign exchange rate neutral information to facilitate comparisons to our historical operating results.

Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, acquisition-related expense (benefit), net and items that are unusual in nature or infrequently occurring. Our definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key measure used by our management and Board of Directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors.

Non-GAAP net income (loss) attributable to common stockholders and non-GAAP earnings (loss) per share adjust our net income (loss) attributable to common stockholders and earnings (loss) per share to exclude the impact of:

We believe that excluding these items from our measures of non-GAAP net income (loss) attributable to common stockholders and non-GAAP earnings (loss) per share provides useful supplemental information for evaluating our operating performance and facilitates comparisons to our historical results by eliminating items that are non-cash in nature, relate to discrete events or are otherwise not indicative of the core operating performance of our ongoing business.

Free cash flow is a non-GAAP financial measure that comprises net cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software from continuing operations. We use free cash flow to conduct and evaluate our business because, although it is similar to cash flow from operations, we believe that it typically represents a more useful measure of cash flows because purchases of fixed assets, software developed for internal-use and website development costs are necessary components of our ongoing operations. Free cash flow is not intended to represent the total increase or decrease in Groupon's cash balance for the applicable period.

Note on Forward-Looking Statements

The statements contained in this release that refer to plans and expectations for the next quarter, the full year or the future are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve a number of risks and uncertainties, and actual results could differ materially from those discussed. The words "may," will," should," "could," "expect," anticipate," "believe," "estimate," intend," "continue" and other similar expressions are intended to identify forward-looking statements. The risks and uncertainties that could cause our results to differ materially from those included in the forward-looking statements include, but are not limited to, volatility in our revenue and operating results; risks related to our business strategy, including our strategy to grow our local marketplaces, marketing strategy and spend and the productivity of those marketing investments and the impact of our shift away from lower margin products in our Goods category; effectively dealing with challenges arising from our international operations, including fluctuations in currency exchange rates; retaining existing customers and adding new customers, including as we increase our marketing spend and shift away from lower margin products in our Goods category; retaining and adding high quality merchants; cyber security breaches; incurring expenses as we expand our business; competing successfully in our industry; maintaining favorable payment terms with our business partners; providing a strong mobile experience for our customers; delivery and routing of our emails; product liability claims; managing inventory and order fulfillment risks; integrating our technology platforms; litigation; managing refund risks; retaining, attracting and integrating members of our executive team; difficulties, delays or our inability to successfully complete all or part of the announced restructuring actions or to realize the operating efficiencies and other benefits of such restructuring actions; higher than anticipated restructuring charges or changes in the timing of such restructuring charges; completing and realizing the anticipated benefits from acquisitions, dispositions, joint ventures and strategic investments; tax liabilities; tax legislation; compliance with domestic and foreign laws and regulations, including the CARD Act and regulation of the Internet and e-commerce; classification of our independent contractors; maintaining our information technology infrastructure; protecting our intellectual property; maintaining a strong brand; seasonality; customer and merchant fraud; payment-related risks; our ability to raise capital if necessary and our outstanding indebtedness; global economic uncertainty; the impact of our ongoing strategic review and any potential strategic alternatives we may choose to pursue; our senior convertible notes; and our ability to complete and realize the anticipated benefits from the hedge and warrant transactions. For additional information regarding these and other risks and uncertainties, we urge you to refer to the factors included under the headings "Risk Factors" and ''Management's Discussion and Analysis of Financial Condition and Results of Operations'' in the company's Annual Report on Form 10-K for the year ended December 31, 2015, Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 and our other filings with the Securities and Exchange Commission, copies of which may be obtained by visiting the company's Investor Relations web site at http://investor.groupon.com or the SEC's web site at www.sec.gov. Groupon's actual results could differ materially from those predicted or implied and reported results should not be considered an indication of future performance.

You should not rely upon forward-looking statements as predictions of future events. Although Groupon believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither the company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. The forward-looking statements reflect Groupon's expectations as of April 28, 2016. Groupon undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in its expectations.

About Groupon

Groupon (NASDAQ: GRPN) is building the daily habit in local commerce, offering a vast mobile and online marketplace where people discover and save on amazing things to do, see, eat and buy. By enabling real-time commerce across local businesses, travel destinations, consumer products and live events, shoppers can find the best a city has to offer.

Groupon is redefining how small businesses attract and retain customers by providing them with customizable and scalable marketing tools and services to profitably grow their businesses.

To download Groupon's top-rated mobile apps, visit www.groupon.com/mobile. To search for great deals or subscribe to Groupon emails, visit www.groupon.com. To learn more about the company's merchant solutions and how to work with Groupon, visit www.groupon.com/merchant.

 
Groupon, Inc.
Summary Consolidated and Segment Results
(in thousands, except share and per share amounts)
(unaudited)
         
The financial results of Ticket Monster are presented as discontinued operations in the accompanying condensed consolidated financial statements and tables for the three months ended March 31, 2015. All prior period financial information and operational metrics have been retrospectively adjusted to reflect this presentation.
 
 
Y/Y %
Growth
Three Months Ended March 31,   Y/Y % excluding
  2016     2015  

Growth

FX Effect(2)

FX(2)

Gross Billings (1):
North America $ 937,074 $ 893,977 4.8 % $ (708 ) 4.9 %
EMEA 392,227 459,189 (14.6 ) % (13,120 ) (11.7 ) %
Rest of World   142,709     198,835   (28.2 ) %   (21,873 ) (17.2 ) %
Consolidated gross billings $ 1,472,010   $ 1,552,001   (5.2 ) % $ (35,701 ) (2.9 ) %
 
Revenue:
North America $ 500,813 $ 479,882 4.4 % $ (154 ) 4.4 %
EMEA 188,970 216,220 (12.6 ) % (6,268 ) (9.7 ) %
Rest of World   42,188     54,254   (22.2 ) %   (7,702 ) (8.0 ) %
Consolidated revenue $ 731,971   $ 750,356   (2.5 ) % $ (14,124 ) (0.6 ) %
 
Income (loss) from operations $ (47,333 ) $ 5,295 (993.9 ) % $ (229 ) (989.6 ) %
 
Income (loss) from continuing operations $ (45,596 ) $ (16,739 )
 
Income (loss) from discontinued operations, net of tax $ $ 6,284
 
Net income (loss) attributable to Groupon, Inc. $ (49,119 ) $ (14,273 )
 
Basic net income (loss) per share:
Continuing operations $ (0.08 ) $ (0.03 )
Discontinued operations   -     0.01  
Basic net income (loss) per share $ (0.08 ) $ (0.02 )
 
Diluted net income (loss) per share:
Continuing operations $ (0.08 ) $ (0.03 )
Discontinued operations   -     0.01  
Diluted net income (loss) per share $ (0.08 ) $ (0.02 )
 
Weighted average number of shares outstanding
Basic 582,751,678 676,382,937
Diluted 582,571,678 676,382,937
 
(1)   Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.
(2) Represents the change in financial measures that would have resulted had average exchange rates in the reporting period been the same as those in effect during the three months ended March 31, 2015.
 
Groupon, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
           
Three Months Ended March 31,
2016    

2015 (1)

Operating activities
Net income (loss) $ (45,596 ) $ (10,455 )
Less: Income (loss) from discontinued operations, net of tax       6,284  
Income (loss) from continuing operations (45,596 ) (16,739 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property, equipment and software 30,143 26,266
Amortization of acquired intangible assets 4,654 5,934
Stock-based compensation 30,756 35,144
Restructuring-related long-lived asset impairments 45
Deferred income taxes (2,310 ) 22
(Gain) loss, net from changes in fair value of contingent consideration 3,442 (279 )
Loss from changes in fair value of investments 1,100
Change in assets and liabilities, net of acquisitions:
Restricted cash 505 3,245
Accounts receivable (3,223 ) (8,901 )
Prepaid expenses and other current assets 20,940 (2,513 )
Accounts payable (2,850 ) 2,244
Accrued merchant and supplier payables (112,425 ) (17,034 )
Accrued expenses and other current liabilities 10,848 (2,470 )
Other, net   (12,754 )   18,688  
Net cash provided by (used in) operating activities from continuing operations (76,725 ) 43,607
Net cash provided by (used in) operating activities from discontinued operations       (24,355 )
Net cash provided by (used in) operating activities   (76,725 )   19,252  
 
Net cash provided by (used in) investing activities from continuing operations (20,778 ) (19,443 )
Net cash provided by (used in) investing activities from discontinued operations       (624 )
Net cash provided by (used in) investing activities   (20,778 )   (20,067 )
   
Net cash provided by (used in) financing activities   (78,015 )   (35,838 )
 
Effect of exchange rate changes on cash and cash equivalents, including cash classified within current assets held for sale   10,668     (30,199 )
Net increase (decrease) in cash and cash equivalents, including cash classified within current assets held for sale (164,850 ) (66,852 )
Less: Net increase (decrease) in cash classified within current assets held for sale       (25,722 )
Net increase (decrease) in cash and cash equivalents (164,850 ) (41,130 )
Cash and cash equivalents, beginning of period   853,362     1,016,634  
Cash and cash equivalents, end of period $ 688,512   $ 975,504  
(1)   The Company adopted the guidance in Accounting Standards Update ("ASU") 2016-09, Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting, on January 1, 2016. ASU 2016-09 requires that all income tax-related cash flows resulting from share-based payments be reported as operating activities in the statement of cash flows. Previously, income tax benefits at settlement of an award were reported as a reduction to operating cash flows and an increase to financing cash flows to the extent that those benefits exceeded the income tax benefits reported in earnings during the award's vesting period. The Company has elected to apply that change in cash flow classification on a retrospective basis, which has resulted in a $2.9 million increase to net cash provided by operating activities and a corresponding increase to net cash used in financing activities in the condensed consolidated statement of cash flows for the period ended March 31, 2015, as compared to the amounts previously reported.
 
Groupon, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)
       
Three Months Ended March 31,
2015 2014
Revenue:
Third party and other $ 334,568 $ 360,121
Direct   397,403     390,235  
Total revenue   731,971     750,356  
Cost of revenue:
Third party and other 46,781 51,697
Direct   345,862     351,253  
Total cost of revenue   392,643     402,950  
Gross profit   339,328     347,406  
Operating expenses:
Marketing 89,765 52,533
Selling, general and administrative 280,988 289,847
Restructuring charges 12,444
Acquisition-related expense (benefit), net   3,464     (269 )
Total operating expenses   386,661     342,111  
Income (loss) from operations (47,333 ) 5,295
Other income (expense), net (1)   3,486     (19,927 )
Income (loss) from continuing operations before provision (benefit) for income taxes (43,847 ) (14,632 )
Provision (benefit) for income taxes   1,749     2,107  
Income (loss) from continuing operations (45,596 ) (16,739 )
Income (loss) from discontinued operations, net of tax       6,284  
Net income (loss) (45,596 ) (10,455 )
Net income attributable to noncontrolling interests   (3,523 )   (3,818 )
Net income (loss) attributable to Groupon, Inc. $ (49,119 ) $ (14,273 )
 
Basic net income (loss) per share:
Continuing operations $ (0.08 ) $ (0.03 )
Discontinued operations   -     0.01  
Basic net income (loss) per share $ (0.08 ) $ (0.02 )
 
Diluted net income (loss) per share:
Continuing operations $ (0.08 ) $ (0.03 )
Discontinued operations   -     0.01  
Diluted net income (loss) per share $ (0.08 ) $ (0.02 )
 
Weighted average number of shares outstanding
Basic 582,751,678 676,382,937
Diluted 582,571,678 676,382,937
 
(1)   Other income (expense), net includes foreign currency gains (losses) of $6.5 million and $(19.5) million for the three months ended March 31, 2016 and 2015, respectively.
 
Groupon, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
       
March 31, 2016 December 31, 2015
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 688,512 $ 853,362
Accounts receivable, net 73,471 68,175
Prepaid expenses and other current assets   134,831     153,705  
Total current assets 896,814 1,075,242
Property, equipment and software, net 193,036 198,897
Goodwill 291,747 287,332
Intangible assets, net 32,769 36,483
Investments (including $162.5 million and $163.7 million at March 31, 2016 and December 31, 2015, respectively, at fair value) 177,553 178,236
Deferred income taxes 4,254 3,454
Other non-current assets   22,507     16,620  
Total Assets $ 1,618,680   $ 1,796,264  
Liabilities and Equity
Current liabilities:
Accounts payable $ 21,970 $ 24,590
Accrued merchant and supplier payables 674,153 776,211
Accrued expenses and other current liabilities   406,578     402,724  
Total current liabilities 1,102,701 1,203,525
Deferred income taxes 6,937 8,612
Other non-current liabilities   123,371     113,540  
Total Liabilities   1,233,009     1,325,677  
Commitments and contingencies
Stockholders' Equity
Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized, 720,766,970 shares issued and 573,478,805 shares outstanding at March 31, 2016 and 717,387,446 shares issued and 588,919,281 shares outstanding at December 31, 2015 72 72
Class B common stock, par value $0.0001 per share, 10,000,000 shares authorized, 2,399,976 shares issued and outstanding at March 31, 2016 and December 31, 2015
Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized, no shares issued and outstanding at March 31, 2016 and December 31, 2015

Additional paid-in capital 1,997,930 1,964,453
Treasury stock, at cost, 147,288,165 shares at March 31, 2016 and 128,468,165 shares at December 31, 2015 (708,490 ) (645,041 )
Accumulated deficit (953,542 ) (901,292 )
Accumulated other comprehensive income (loss)   48,354     51,206  
Total Groupon, Inc. Stockholders' Equity 384,324 469,398
Noncontrolling interests   1,347     1,189  
Total Equity   385,671     470,587  
Total Liabilities and Equity $ 1,618,680   $ 1,796,264  
 
Groupon, Inc.
Segment Information
(in thousands)
(unaudited)
       
Three Months Ended March 31,
2016 2015
North America
Gross billings (1) $ 937,074 $ 893,977
Revenue $ 500,813 $ 479,882
Segment cost of revenue and operating expenses (2) (3)   512,261     455,216  
Segment operating income (2) $ (11,448 ) $ 24,666
Segment operating income as a percent of segment gross billings (1.2 )% 2.8 %
Segment operating income as a percent of segment revenue (2.3 )% 5.1 %
 
EMEA
Gross billings (1) $ 392,227 $ 459,189
Revenue $ 188,970 $ 216,220
Segment cost of revenue and operating expenses (2) (3)   183,054     196,568  
Segment operating income (2) $ 5,916 $ 19,652
Segment operating income as a percent of segment gross billings 1.5 % 4.3 %
Segment operating income as a percent of segment revenue 3.1 % 9.1 %
 
Rest of World
Gross billings (1) $ 142,709 $ 198,835
Revenue $ 42,188 $ 54,254
Segment cost of revenue and operating expenses (2) (3)   49,974     58,402  
Segment operating loss (2) $ (7,786 ) $ (4,148 )
Segment operating loss as a percent of segment gross billings (5.5 )% (2.1 )%
Segment operating loss as a percent of segment revenue (18.5 )% (7.6 )%
 
(1)   Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.
(2) Segment cost of revenue and operating expenses and segment operating income (loss) exclude stock-based compensation and acquisition-related expense (benefit), net.
(3) Segment cost of revenue and operating expenses for the three months ended March 31, 2016 includes restructuring charges of $2.9 million in North America (which excludes $2.6 million of stock-based compensation), $3.5 million in EMEA and $3.4 million in Rest of World.
 
Groupon, Inc.
Non-GAAP Reconciliation Schedules
(in thousands, except share and per share amounts)
(unaudited)
     
Adjusted EBITDA, non-GAAP earnings attributable to common stockholders and non-GAAP earnings per share are non-GAAP financial measures. The Company reconciles Adjusted EBITDA to the most comparable U.S. GAAP financial measure, "Net income (loss) from continuing operations" for the periods presented and the Company reconciles non-GAAP earnings per share to the most comparable U.S. GAAP financial measure, "Diluted net income (loss) per share," for the periods presented.
 
The following is a quarterly reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, "Income (loss) from continuing operations."
 
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
Income (loss) from continuing operations $ (16,739 ) $ (15,267 ) $ (24,613 ) $ (32,552 ) $ (45,596 )
Adjustments:
Stock-based compensation (1) 35,144 38,467 35,432 32,691 27,976
Depreciation and amortization 32,200 31,372 35,635 33,763 34,797
Acquisition-related expense (benefit), net (269 ) 505 1,064 557 3,464
Restructuring charges 24,146 5,422 12,444
Gain on disposition of business (13,710 )
Prepaid marketing write-off 6,690
Securities litigation expense 37,500
Non-operating expense (income), net 19,927 (2,941 ) 8,160 3,393 (3,486 )
Provision (benefit) for income taxes   2,107     8,982     (53,970 )   23,736     1,749  
Total adjustments   89,109     76,385     80,947     99,562     76,944  
Adjusted EBITDA $ 72,370   $ 61,118   $ 56,334   $ 67,010   $ 31,348  
 
(1) Includes stock-based compensation classified within cost of revenue, marketing expense, and selling, general and administrative expense. Non-operating expense (income), net, includes $0.02 million, $0.1 million, $0.2 million and $0.2 million of additional stock-based compensation for the three months ended June 30, 2015, September 30, 2015, December 31, 2015 and March 31, 2016, respectively. Restructuring charges includes $2.6 million of additional stock-based compensation for the three months ended March 31, 2016.
 
The following is a reconciliation of net income (loss) attributable to common stockholders to non-GAAP net income (loss) attributable to common stockholders and a reconciliation of diluted net income (loss) per share to non-GAAP net income (loss) per share for the three months ended March 31, 2016:
 

Three Months Ended
March 31, 2016

Net income (loss) attributable to common stockholders $ (49,119 )

 

Stock-based compensation (1) 28,208
Amortization of acquired intangible assets 4,654
Acquisition-related expense (benefit), net 3,464
Restructuring charges 12,444
Intercompany foreign currency losses (gains) and reclassifications of translation adjustments to earnings (2) (5,470 )
Loss from changes in fair value of investments 1,100
Income tax effect of above adjustments   88  
Non-GAAP net income (loss) attributable to common stockholders $ (4,631 )
 
Diluted shares 582,751,678
Incremental diluted shares    
Adjusted diluted shares   582,751,678  
 
Diluted net income (loss) per share (0.08 )
Impact of stock-based compensation, amortization of acquired intangible assets, acquisition-related expense (benefit), net, intercompany foreign currency losses (gains), items that are unusual in nature and infrequently occurring and related tax effects   0.07  
Non-GAAP net income (loss) per share $ (0.01 )
 
(1) Excludes $2.6 million of stock-based compensation classified within restructuring charges.
(2) For the three months ended March 31, 2016, a $1.5 million cumulative translation loss was reclassified to earnings as a result of the Company's exit from certain countries as part of its restructuring plan.
 
Foreign exchange rate neutral operating results are non-GAAP financial measures. The Company reconciles foreign exchange rate neutral operating results to the most comparable U.S. GAAP financial measures, "Gross billings," "Revenue" and "Income (loss) from continuing operations," respectively, for the periods presented. The Company reconciles "foreign exchange rate neutral Gross billings growth" and "foreign exchange rate neutral Revenue growth" to year-over-year growth rates for the most comparable U.S. GAAP financial measures, "Gross billings growth" and "Revenue growth," respectively, for the periods presented
 
The effect on the Company's gross billings, revenue and income (loss) from changes in exchange rates versus the U.S. Dollar for the three months ended March 31, 2016 was as follows:
 
Three Months Ended March 31, 2016 Three Months Ended March 31, 2016
At Avg. Q1 2015 Exchange Rate As At Avg. Q4 2015 Exchange Rate As

Rates (1)

Effect(2)

Reported

Rates (3)

Effect(2)

Reported
Gross billings $ 1,507,711 $ (35,701 ) $ 1,472,010 $ 1,478,984 $ (6,974 ) $ 1,472,010
Revenue 746,095 (14,124 ) 731,971 734,872 (2,901 ) 731,971
Income (loss) from operations $ (47,104 ) $ (229 ) $ (47,333 ) $ (46,447 ) $ (886 ) $ (47,333 )
 
(1) Represents the financial statement balances that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three months ended March 31, 2015.
(2) Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable prior periods.
(3) Represents the financial statement balances that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three months ended December 31, 2015.
 
The following is a quarterly reconciliation of foreign exchange rate neutral Gross billings growth from the comparable quarterly periods of the prior year to reported Gross billings growth from the comparable quarterly periods of the prior year.
 
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
EMEA Gross billings growth, excluding FX 7 % 9 % (1 ) % (2 ) % (12 ) %
FX Effect   (18 )   (19 )     (14 )     (11 )     (3 )
EMEA Gross billings growth (11 ) % (10 ) % (15 ) % (13 ) % (15 ) %
 
Rest of World Gross billings growth, excluding FX (1 ) % 6 % % (7 ) % (17 ) %
FX Effect   (11 )   (15 )     (19 )     (14 )     (11 )
Rest of World Gross billings growth (12 ) % (9 ) % (19 ) % (21 ) % (28 ) %
 
Consolidated Gross billings growth, excluding FX 10 % 10 % 6 % 4 % (3 ) %
FX Effect   (8 )   (8 )     (8 )     (5 )     (2 )
Consolidated Gross billings growth 2 % 2 % (2 ) % (1 ) % (5 ) %
 
The following is a quarterly reconciliation of foreign exchange rate neutral Revenue growth from the comparable quarterly periods of the prior year to reported Revenue growth from the comparable quarterly periods of the prior year.
 
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
EMEA Revenue growth, excluding FX 13 % 9 % 2 % 3 % (10 ) %
FX Effect   (19 )   (19 )     (15 )     (12 )     (3 )
EMEA Revenue growth (6 ) % (10 ) % (13 ) % (9 ) % (13 ) %
 
Rest of World Revenue growth, excluding FX (8 ) % (4 ) % (5 ) % (8 ) % (8 ) %
FX Effect   (10 )   (14 )     (18 )     (15 )     (14 )
Rest of World Revenue growth (18 ) % (18 ) % (23 ) % (23 ) % (22 ) %
 
Consolidated Revenue growth, excluding FX 10 % 11 % 7 % 9 % (1 ) %
FX Effect   (7 )   (8 )     (7 )     (5 )     (1 )
Consolidated Revenue growth 3 % 3 % % 4 % (2 ) %
 
The effect on North America's gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended March 31, 2016 was as follows:
         
Y/Y%
Exchange Growth
At Avg. Q1 Rate March 31, 2016 March 31, 2015 Y/Y % excluding

2015 Rates (1)

Effect (2)

As Reported As Reported Growth FX
Local:
Third party and other $ 540,038 $ (415 ) $ 539,623 $ 512,558 5.3 % 5.4 %
 
Travel:
Third party   103,473   (83 )   103,390   96,678 6.9 % 7.0 %
Total services 643,511 (498 ) 643,013 609,236 5.5 % 5.6 %
 
Goods:
Third party 8,515 (210 ) 8,305 6,360 30.6 % 33.9 %
Direct   285,756       285,756   278,381 2.6 % 2.6 %
Total 294,271 (210 ) 294,061 284,741 3.3 % 3.3 %
             
Total gross billings $ 937,782   $ (708 )   $ 937,074   $ 893,977 4.8 % 4.9 %
 
The effect on EMEA's gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended March 31, 2016 was as follows:
 
Y/Y%
Exchange Growth
At Avg. Q1 Rate March 31, 2016 March 31, 2015 Y/Y % excluding

2015 Rates (1)

Effect (2)

As Reported As Reported Growth FX
Local:
Third party and other $ 180,262 $ (6,229 ) $ 174,033 $ 217,598 (20.0 ) % (17.2 ) %
 
Travel:
Third party   59,189   (1,988 )   57,201   65,065 (12.1 ) % (9.0 ) %
Total services 239,451 (8,217 ) 231,234 282,663 (18.2 ) % (15.3 ) %
 
Goods:
Third party 57,626 (1,853 ) 55,773 69,537 (19.8 ) % (17.1 ) %
Direct   108,270   (3,050 )   105,220   106,989 (1.7 ) % 1.2 %
Total 165,896 (4,903 ) 160,993 176,526 (8.8 ) % (6.0 ) %
             
Total gross billings $ 405,347   $ (13,120 )   $ 392,227   $ 459,189 (14.6 ) % (11.7 ) %
 
The effect on Rest of World's gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended March 31, 2016 was as follows:
 
Y/Y%
Exchange Growth
At Avg. Q1 Rate March 31, 2016 March 31, 2015 Y/Y % excluding

2015 Rates (1)

Effect (2)

As Reported As Reported Growth FX
Local:
Third party and other $ 86,569 $ (11,275 ) $ 75,294 $ 99,735 (24.5 ) % (13.2 ) %
 
Travel:
Third party   28,918   (4,990 )   23,928   32,946 (27.4 ) % (12.2 ) %
Total services 115,487 (16,265 ) 99,222 132,681 (25.2 ) % (13.0 ) %
 
Goods:
Third party 40,658 (3,598 ) 37,060 61,289 (39.5 ) % (33.7 ) %
Direct   8,437   (2,010 )   6,427   4,865 32.1 % 73.4 %
Total 49,095 (5,608 ) 43,487 66,154 (34.3 ) % (25.8 ) %
             
Total gross billings $ 164,582   $ (21,873 )   $ 142,709   $ 198,835 (28.2 ) % (17.2 ) %
 
The effect on consolidated gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended March 31, 2016 was as follows:
 
Y/Y%
Exchange Growth
At Avg. Q1 Rate March 31, 2016 March 31, 2015 Y/Y % excluding

2015 Rates (1)

Effect (2)

As Reported As Reported Growth FX
Local:
Third party and other $ 806,869 $ (17,919 ) $ 788,950 $ 829,891 (4.9 ) % (2.8 ) %
 
Travel:
Third party   191,580   (7,061 ) $ 184,519   194,689 (5.2 ) % (1.6 ) %
Total services 998,449 (24,980 ) 973,469 1,024,580 (5.0 ) % (2.6 ) %
 
Goods:
Third party 106,799 (5,661 ) 101,138 137,186 (26.3 ) % (22.2 ) %
Direct   402,463   (5,060 )   397,403   390,235 1.8 % 3.1 %
Total 509,262 (10,721 ) 498,541 527,421 (5.5 ) % (3.4 ) %
             
Total gross billings $ 1,507,711   $ (35,701 )   $ 1,472,010   $ 1,552,001 (5.2 ) % (2.9 ) %
 
(1)   Represents the financial statement balances that would have resulted had average exchange rates in the reporting period been the same as those in effect during the three months ended March 31, 2016.
(2) Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable prior year period.
 
Groupon, Inc.

Supplemental Financial Information and Business Metrics (9)(11)

(financial data in thousands; active customers in millions)
(unaudited)
 
 
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
Segments
North America Segment:
Gross Billings (1):
Local (2) Gross Billings $ 512,558 $ 499,378 $ 481,608 $ 531,154 $ 539,623
Travel Gross Billings   96,678     102,908     101,801     89,389     103,390  
Gross Billings - Services 609,236 602,286 583,409 620,543 643,013
Gross Billings - Goods   284,741     293,970     285,794     429,818     294,061  
Total Gross Billings $ 893,977   $ 896,256   $ 869,203   $ 1,050,361   $ 937,074  
Year-over-year growth 14 % 12 % 12 % 11 % 5 %
% Third Party and Other 69 % 68 % 68 % 60 % % 70 % %
% Direct 31 % 32 % 32 % 40 % % 30 % %
Gross Billings Trailing Twelve Months (TTM) $ 3,415,687 $ 3,513,098 $ 3,608,015 $ 3,709,797 $ 3,752,894
 
Revenue (3):
Local Revenue $ 180,864 $ 172,461 $ 163,786 $ 184,201 $ 192,153
Travel Revenue   19,989     21,958     21,394     18,390     20,914  
Revenue - Services 200,853 194,419 185,180 202,591 213,067
Revenue - Goods   279,029     286,863     278,751     420,056     287,746  
Total Revenue $ 479,882   $ 481,282   $ 463,931   $ 622,647   $ 500,813  
Year-over-year growth 11 % 14 % 11 % 13 % 4 %
% Third Party and Other 42 % 41 % 40 % 33 % % 43 % %
% Direct 58 % 59 % 60 % 67 % % 57 % %
Revenue TTM $ 1,873,281 $ 1,930,632 $ 1,976,069 $ 2,047,742 $ 2,068,673
 
Gross Profit (4):
Local Gross Profit $ 154,776 $ 147,574 $ 138,798 $ 159,745 $ 164,018
% of North America Local Gross Billings 30.2 % 29.6 % 28.8 % 30.1 % 30.4 %
Travel Gross Profit 15,791 18,385 17,644 15,207 15,712
% of North America Travel Gross Billings   16.3   %   17.9   %   17.3 % %   17.0 % %   15.2 % %
Gross Profit - Services 170,567 165,959 156,442 174,952 179,730
% of North America Services Gross Billings 28.0 % 27.6 % 26.8 % 28.2 % 28.0 %
Gross Profit - Goods 23,923 30,598 34,801 44,329 36,213
% of North America Goods Gross Billings   8.4   %   10.4   %   12.2   %   10.3   %   12.3   %
Total Gross Profit $ 194,490   $ 196,557   $ 191,243   $ 219,281   $ 215,943  
Year-over-year growth 8 % 9 % 9 % 12 % 11 %
% Third Party and Other 88 % 85 % 83 % 81 % 84 %
% Direct 12 % 15 % 17 % 19 % 16 %
% of North America Total Gross Billings 21.8 % 21.9 % 22.0 % 20.9 % 23.0 %
 
EMEA Segment:
Gross Billings:
Local Gross Billings $ 217,598 $ 198,553 $ 182,540 $ 197,445 $ 174,033
Travel Gross Billings   65,065     59,544     64,916     59,836     57,201  
Gross Billings - Services 282,663 258,097 247,456 257,281 231,234
Gross Billings - Goods   176,526     175,439     167,026     229,866     160,993  
Total Gross Billings $ 459,189   $ 433,536   $ 414,482   $ 487,147   $ 392,227  
Year-over-year growth (11 ) % (10 ) % (15 ) % (13 ) % (15 ) %
Year-over-year growth, excluding FX 7 % 9 % (1 ) % (2 )% % (12 ) %
% Third Party and Other 77 % 76 % 75 % 70 % % 73 % %
% Direct 23 % 24 % 25 % 30 % % 27 % %

Gross Billings TTM

$ 1,992,408 $ 1,942,689 $ 1,867,748 $ 1,794,354 $ 1,727,392
 
Revenue:
Local Revenue $ 82,536 $ 75,543 $ 70,781 $ 73,225 $ 61,886
Travel Revenue   14,717     13,100     13,561     11,681     11,178  
Revenue - Services 97,253 88,643 84,342 84,906 73,064
Revenue - Goods   118,967     115,404     114,945     163,420     115,906  
Total Revenue $ 216,220   $ 204,047   $ 199,287   $ 248,326   $ 188,970  
Year-over-year growth (6 ) % (10 ) % (13 ) % (9 ) % (13 ) %
Year-over-year growth, excluding FX 13 % 9 % 2 % 3 % (10 ) %
% Third Party and Other 51 % 48 % 48 % 41 % % 44 %
% Direct 49 % 52 % 52 % 59 % % 56 %
Revenue TTM $ 946,457 $ 922,814 $ 892,029 $ 867,880 $ 840,630
 
Gross Profit:
Local Gross Profit $ 77,356 $ 70,270 $ 66,288 $ 68,966 $ 58,263
% of EMEA Local Gross Billings 35.5 % 35.4 % 36.3 % 0.3 % 33.5 %
Travel Gross Profit 12,400 11,939 12,323 10,732 10,215
% of EMEA Travel Gross Billings   19.1   %   20.1   %   19.0   %   17.9   %   17.9   %
Gross Profit - Services 89,756 82,209 78,611 79,698 68,478
% of EMEA Services Gross Billings 31.8 % 31.9 % 31.8 % 31.0 % 29.6 %
Gross Profit - Goods 25,481 21,878 24,905 43,026 26,412
% of EMEA Goods Gross Billings   14.4   %   12.5   %   14.9   %   18.7   %   16.4   %
Total Gross Profit $ 115,237   $ 104,087   $ 103,516   $ 122,724   $ 94,890  
Year-over-year growth (18 ) % (26 ) % (21 ) % (14 ) % (18 ) %
% Third Party and Other 87 % 86 % 86 % 77 % 82 %
% Direct 13 % 14 % 14 % 23 % 18 %
% of EMEA Total Gross Billings 25.1 % 24.0 % 25.0 % 25.2 % 24.2 %
 
Rest of World Segment:
Gross Billings:
Local Gross Billings $ 99,735 $ 100,403 $ 92,972 $ 83,430 $ 75,294
Travel Gross Billings   32,946     31,263     30,709     25,369     23,928  
Gross Billings - Services 132,681 131,666 123,681 108,799 99,222
Gross Billings - Goods   66,154     67,555     60,168     60,685     43,487  
Total Gross Billings $ 198,835   $ 199,221   $ 183,849   $ 169,484   $ 142,709  
Year-over-year growth (12 ) % (9 ) % (19 ) % (21 ) % (28 ) %
Year-over-year growth, excluding FX (1 ) % 6 % % (7 )% % (17 ) %
% Third Party and Other 98 % 97 % 96 % 95 % % 95 % %
% Direct 2 % 3 % 4 % 5 % % 5 % %

Gross Billings TTM

$ 861,032 $ 840,243 $ 797,454 $ 751,389 $ 695,263
 
Revenue:
Local Revenue $ 30,281 $ 28,499 $ 26,372 $ 22,229 $ 22,082
Travel Revenue   6,495     6,363     6,135     5,098     5,049  
Revenue - Services 36,776 34,862 32,507 27,327 27,131
Revenue - Goods   17,478     18,204     17,870     18,870     15,057  
Total Revenue $ 54,254   $ 53,066   $ 50,377   $ 46,197   $ 42,188  
Year-over-year growth (18 ) % (18 ) % (23 ) % (23 ) % (22 ) %
Year-over-year growth, excluding FX (8 ) % (4 ) % (5 ) % (8 ) % (8 ) %
% Third Party and Other 91 % 87 % 86 % 82 % 85 %
% Direct 9 % 13 % 14 % 18 % 15 %
Revenue TTM $ 244,326 $ 232,802 $ 217,476 $ 203,894 $ 191,828
 
Gross Profit:
Local Gross Profit $ 26,161 $ 24,567 $ 22,568 $ 18,889 $ 18,771
% of Rest of World Local Gross Billings 26.2 % 24.5 % 24.3 % 22.6 % 24.9 %
Travel Gross Profit 4,906 5,012 4,859 4,040 3,997
% of Rest of World Travel Gross Billings   14.9   %   16.0   %   15.8   %   15.9   %   16.7   %
Gross Profit - Services 31,067 29,579 27,427 22,929 22,768
% of Rest of World Services Gross Billings 23.4 % 22.5 % 22.2 % 21.1 % 22.9 %
Gross Profit - Goods 6,612 6,784 6,726 6,806 5,727
% of Rest of World Goods Gross Billings   10.0   %   10.0   %   11.2   %   11.2   %   13.2   %
Total Gross Profit $ 37,679   $ 36,363   $ 34,153   $ 29,735   $ 28,495  
Year-over-year growth (16 ) % (20 ) % (28 ) % (23 ) % (24 ) %
% Third Party and Other 99 % 99 % 99 % 99 % 100 %
% Direct 1 % 1 % 1 % 1 % %
% of Rest of World Total Gross Billings 18.9 % 18.3 % 18.6 % 17.5 % 20.0 %
 
Consolidated Results of Operations:
Gross Billings:
Local Gross Billings $ 829,891 $ 798,334 $ 757,120 $ 812,029 $ 788,950
Travel Gross Billings   194,689     193,715     197,426     174,594     184,519  
Gross Billings - Services 1,024,580 992,049 954,546 986,623 973,469
Gross Billings - Goods   527,421     536,964     512,988     720,369     498,541  
Total Gross Billings $ 1,552,001   $ 1,529,013   $ 1,467,534   $ 1,706,992   $ 1,472,010  
Year-over-year growth 2 % 2 % (2 ) % (1 ) % (5 ) %
Year-over-year growth, excluding FX 10 % 10 % 6 % 4 % (3 ) %
% Third Party and Other 75 % 74 % 74 % 66 % 73 % %
% Direct 25 % 26 % 26 % 34 % 27 % %
Gross Billings TTM $ 6,269,127 $ 6,296,030 $ 6,273,217 $ 6,255,540 $ 6,175,549
Year-over-year growth 7 % 6 % 3 % % % (1 )% %
 
Revenue:
Local Revenue $ 293,681 $ 276,503 $ 260,939 $ 279,655 $ 276,121
Travel Revenue   41,201     41,421     41,090     35,169     37,141  
Revenue - Services 334,882 317,924 302,029 314,824 313,262
Revenue - Goods   415,474     420,471     411,566     602,346     418,709  
Total Revenue $ 750,356   $ 738,395   $ 713,595   $ 917,170   $ 731,971  
Year-over-year growth 3 % 3 % % 4 % (2 ) %
Year-over-year growth, excluding FX 10 % 11 % 7 % 9 % (1 ) %
% Third Party and Other 48 % 46 % 46 % 38 % 46 %
% Direct 52 % 54 % 54 % 62 % 54 %
Revenue TTM $ 3,064,064 $ 3,086,248 $ 3,085,574 $ 3,119,516 $ 3,101,131
Year-over-year growth 13 % 10 % 5 % 3 % 1 %
 
Gross Profit:
Local Gross Profit $ 258,293 $ 242,411 $ 227,654 $ 247,600 $ 241,052
% of Consolidated Local Gross Billings 31.1 % 30.4 % 30.1 % 30.5 % 30.6 %
Travel Gross Profit 33,097 35,336 34,826 29,979 29,924
% of Consolidated Travel Gross Billings   17.0   %   18.2   %   17.6   %   17.2   %   16.2   %
Gross Profit - Services 291,390 277,747 262,480 277,579 270,976
% of Consolidated Services Gross Billings 28.4 % 28.0 % 27.5 % 28.1 % 27.8 %
Gross Profit - Goods 56,016 59,260 66,432 94,161 68,352
% of Consolidated Goods Gross Billings   10.6   %   11.0   %   13.0   %   13.1   %   13.7   %
Total Gross Profit $ 347,406   $ 337,007   $ 328,912   $ 371,740   $ 339,328  
Year-over-year growth (5 ) % (8 ) % (7 ) % (2 ) % (2 ) %
% Third Party and Other 89 % 87 % 85 % 81 % 85 %
% Direct 11 % 13 % 15 % 19 % 15 %
% of Total Consolidated Gross Billings 22.4 % 22.0 % 22.4 % 21.8 % 23.1 %
 
Marketing $ 52,533 $ 57,007 $ 61,587 $ 83,208 $ 89,765
Selling, general and administrative $ 289,847 $ 288,721 $ 326,248 $ 287,976 $ 280,988
Adjusted EBITDA $ 72,370 $ 61,118 $ 56,334 $ 67,010 $ 33,923
% of Total Consolidated Gross Billings 4.7 % 4.0 % 3.8 % 3.9 % 2.3 %
% of Total Consolidated Revenue 9.6 % 8.3 % 7.9 % 7.3 % 4.6 %
 
Free cash flow is a non-GAAP financial measure. The following is a reconciliation of free cash flow to the most comparable U.S. GAAP financial measure, "Net cash provided by (used in) operating activities from continuing operations."
 
Q1 2015 (10) Q2 2015 (10) Q3 2015 (10) Q4 2015 (10) Q1 2016
 
Net cash provided by (used in) operating activities from continuing operations $ 43,607 $ 13,325 $ (7,640 ) $ 250,455 $ (76,725 )
Purchases of property and equipment and capitalized software from continuing operations   (18,294 )   (22,452 )   (27,735 )   (15,507 )   (19,952 )
Free cash flow $ 25,313 $ (9,127 ) $ (35,375 ) $ 234,948 $ (96,677 )
 
Net cash provided by (used in) operating activities from continuing operations (TTM) $ 320,803 $ 358,576 $ 325,971 $ 299,747 $ 179,415
Purchases of property and equipment and capitalized software from continuing operations (TTM)   (85,761 )   (79,501 )   (88,598 )   (83,988 )   (85,646 )
Free cash flow (TTM) $ 235,042 $ 279,075 $ 237,373 $ 215,759 $ 93,769
 
Net cash provided by (used in) investing activities from continuing operations $ (19,443 ) $ (28,541 ) $ (98,028 ) $ (31,238 ) $ (20,778 )
Net cash provided by (used in) financing activities $ (35,838 ) $ (141,557 ) $ (14,793 ) $ (323,597 ) $ (78,015 )
 
Net cash provided by (used in) investing activities from continuing operations (TTM) $ (105,821 ) $ (102,205 ) $ (181,187 ) $ (177,250 ) $ (178,585 )
Net cash provided by (used in) financing activities (TTM) $ (198,627 ) $ (221,354 ) $ (216,683 ) $ (515,785 ) $ (557,962 )
 
Other Metrics:
Active Customers (6)
North America 24.6 24.9 25.2 25.9 26.9
EMEA 15.3 15.5 15.4 15.4 15.3
Rest of World   8.2     8.2     8.0     7.6     7.2  
Total Active Customers 48.1 48.6 48.6 48.9 49.4
 
TTM Gross Billings / Average Active Customer (7)
North America $ 147 $ 148 $ 148 $ 149 $ 146
EMEA 134 130 123 117 113
Rest of World 101 98 99 96 90
Consolidated 135 133 132 130 127
 
Global headcount as of March 31, 2016 and 2015 was as follows:
 
Q1 2015 Q1 2016
Sales (8) 4,429 3,711
% North America

30 %

34 %

% EMEA

42 %

42 %

% Rest of World

28 %

24 %

Other 6,386 5,551
Total Headcount 10,815 9,262
(1)   Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.
(2) Local represents deals from local merchants, deals with national merchants, and deals through local events. Other revenue transactions include advertising, payment processing and commission revenue.
(3) Includes third party revenue, direct revenue and other revenue. Third party revenue is related to sales for which the Company acts as a marketing agent for the merchant. This revenue is recorded on a net basis. Direct revenue is primarily related to the sale of products for which the Company is the merchant of record. These revenues are accounted for on a gross basis, with the cost of inventory included in cost of revenue. Other revenue primarily consists of commission revenue, payment processing revenue and advertising revenue.
(4) Represents third party revenue, direct revenue and other revenue reduced by cost of revenue.
(5) Represents the change in financial measures that would have resulted had average exchange rates in the reporting periods been the same as those in effect in the prior year periods.
(6) Reflects the total number of unique user accounts who have purchased a voucher or product from us during the trailing twelve months.
(7) Reflects the total gross billings generated in the trailing twelve months per average active customer over that period.
(8) Includes merchant sales representatives, as well as sales support from continuing operations.
(9) Financial information and other metrics exclude Ticket Monster, which has been classified as discontinued operations. The Company sold a controlling stake in Ticket Monster in May 2015.
(10) The Company adopted the guidance in ASU 2016-09 on January 1, 2016. ASU 2016-09 requires that all income tax-related cash flows resulting from share-based payments be reported as operating activities in the statement of cash flows. Previously, income tax benefits at settlement of an award were reported as a reduction to operating cash flows and an increase to financing cash flows to the extent that those benefits exceeded the income tax benefits reported in earnings during the award's vesting period. The Company has elected to apply that change in cash flow classification on a retrospective basis, which has resulted in adjustments to net cash provided by (used in) operating activities, net cash used in financing activities, and free cash flow for the three-month and trailing twelve-month periods ended March 31, 2015, June 30, 2015, September 30, 2015 and December 31, 2015.
(11) The definition, methodology and appropriateness of each of our supplemental metrics is reviewed periodically. As a result, metrics are subject to removal and/or change.
 

Groupon, Inc.
Investor Relations
Tom Grant
312-999-3098
ir@groupon.com
or
Public Relations
Bill Roberts
312-459-5191

Source: Groupon, Inc.

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