Groupon, Inc.
Jul 27, 2016
PDF
Add to Briefcase

Groupon Announces Second Quarter 2016 Results

Adds nearly 1.1 million new customers and accelerates Local billings growth to 9% in North America; increases full-year outlook

CHICAGO--(BUSINESS WIRE)-- Groupon, Inc. (NASDAQ: GRPN) today announced financial results for the quarter ended June 30, 2016.

"We continued to see strong traction in customer acquisition as we added more than 1 million new customers -- the most in more than two years," said CEO Rich Williams. "We're excited with the progress of our marketing programs to date and their effectiveness in introducing millions more people to our marketplace."

Second 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 second quarter 2016, Groupon repurchased 6,796,170 shares of its Class A common stock for an aggregate purchase price of $24.4 million. Up to $269.3 million of Class A common stock was available for repurchase under Groupon's share repurchase program as of June 30, 2016. The timing and amount of any share repurchases are determined based on market conditions, share price and other factors, and the program may be discontinued or suspended at any time.

Outlook

Groupon's outlook for 2016 reflects current foreign exchange rates, as well as expected marketing investments, stabilizing trends in Shopping, and cost benefits associated with our streamlining initiatives. We are updating our revenue guidance to between $3.00 and $3.10 billion for the full year, and we are increasing our expected 2016 Adjusted EBITDA range to between $140.0 million and $165.0 million.

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 Regulation FD.

Non-GAAP Financial Measures

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

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

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

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

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

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

Items That Are Unusual in Nature or Infrequently Occurring. During the three months ended June 30, 2016, items that we believe to be unusual in nature or infrequently occurring were gains from business dispositions and charges related to our restructuring plan. 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.

Income Tax Effect of Items Excluded from Non-GAAP Financial Measures. We determine the income tax effect of items excluded from our measures of non-GAAP net income (loss) attributable to common stockholders and non-GAAP earnings (loss) per share by performing a tax provision calculation using pre-tax income (loss) amounts that have been adjusted to exclude those items in the respective jurisdictions to which they relate. The difference between the income tax expense (benefit) determined on that basis and our reported income tax expense (benefit) represents the income tax effect of the excluded items.

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

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

Adjusted EBITDA is a non-GAAP performance measure that we define as net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, acquisition-related expense (benefit), net, and 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 performance 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 are non-GAAP performance measures that adjust our net income (loss) attributable to common stockholders and earnings (loss) per share to exclude the impact of:

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

Free cash flow is a non-GAAP liquidity 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 and any potential adverse impact from the United Kingdom's likely exit from the European Union; 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 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 quarters ended March 31, 2016 and June 30, 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 July 27, 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 and six months ended June 30, 2015. All prior period financial information and operational metrics have been retrospectively adjusted to reflect this presentation.
 
 
Three Months Ended June 30,

Y/Y % Growth

FX Effect(2)

Y/Y % Growth excluding FX(2)

Six Months Ended June 30, Y/Y % Growth FX Effect(2) Y/Y % Growth excluding

FX(2)

2016 2015 2016 2015
Gross Billings(1):
North America $ 966,254 $ 896,256 7.8 % $ (394 ) 7.9 % $ 1,903,328 $ 1,790,233 6.3 % $ (1,102 ) 6.4 %
EMEA 381,309 433,536 (12.0 ) % 897 (12.3 ) % 773,536 892,725 (13.4 ) % (12,224 ) (12.0 ) %
Rest of World   145,319     199,221   (27.1 ) %   (11,953 ) (21.1 ) %   288,028     398,056   (27.6 ) %   (33,826 ) (19.1 ) %
Consolidated gross billings $ 1,492,882   $ 1,529,013   (2.4 ) % $ (11,450 ) (1.6 ) % $ 2,964,892   $ 3,081,014   (3.8 ) % $ (47,152 ) (2.2 ) %
 
Revenue:
North America $ 516,922 $ 481,282 7.4 % $ (110 ) 7.4 % $ 1,017,735 $ 961,164 5.9 % $ (264 ) 5.9 %
EMEA 198,305 204,047 (2.8 ) % 1,362 (3.5 ) % 387,275 420,267 (7.9 ) % (4,908 ) (6.7 ) %
Rest of World   40,803     53,066   (23.1 ) %   (4,898 ) (13.9 ) %   82,991     107,320   (22.7 ) %   (12,600 ) (10.9 ) %
Consolidated revenue $ 756,030   $ 738,395   2.4 % $ (3,646 ) 2.9 % $ 1,488,001   $ 1,488,751   (0.1 ) % $ (17,772 ) 1.1 %
 
Income (loss) from operations $ (43,169 ) $ (9,226 ) (367.9 ) % $ (213 ) (365.6 ) % $ (90,502 ) $ (3,931 ) (2,202.3 ) % $ (443 ) (2,191.0 ) %
 
Income (loss) from continuing operations $ (51,731 ) $ (15,267 ) $ (97,327 ) $ (32,006 )
 
Income (loss) from discontinued operations, net of tax $ $ 127,179 $ $ 133,463
 
Net income (loss) attributable to Groupon, Inc. $ (54,904 ) $ 109,084 $ (104,023 ) $ 94,811
 
Basic net income (loss) per share:
Continuing operations $ (0.10 ) $ (0.03 ) $ (0.18 ) $ (0.06 )
Discontinued operations       0.19         0.20  
Basic net income (loss) per share $ (0.10 ) $ 0.16   $ (0.18 ) $ 0.14  
 
Diluted net income (loss) per share:
Continuing operations $ (0.10 ) $ (0.03 ) $ (0.18 ) $ (0.06 )
Discontinued operations       0.19         0.20  
Diluted net income (loss) per share $ (0.10 ) $ 0.16   $ (0.18 ) $ 0.14  
 
Weighted average number of shares outstanding
Basic 576,903,004 671,630,169 579,827,341 674,006,553
Diluted 576,903,004 671,630,169 579,827,341 674,006,553
(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 and six months ended June 30, 2015.
 
Groupon, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
               
Three Months Ended June 30,   Six Months Ended June 30,
2016   2015   2016   2015
Operating activities
Net income (loss) $ (51,731 ) $ 111,912 $ (97,327 ) $ 101,457
Less: Income (loss) from discontinued operations, net of tax       127,179         133,463  
Income (loss) from continuing operations (51,731 ) (15,267 ) (97,327 ) (32,006 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property, equipment and software 29,709 27,500 59,852 53,766
Amortization of acquired intangible assets 4,581 3,872 9,235 9,806
Stock-based compensation 37,552 38,485 68,308 73,629
Restructuring-related long-lived asset impairments 45
Gains on business dispositions (9,339 ) (9,339 )
Deferred income taxes (2,838 ) (72 ) (5,148 ) (50 )
(Gain) loss, net from changes in fair value of contingent consideration 850 (424 ) 4,292 (703 )
(Gain) loss from changes in fair value of investments 4,607 (450 ) 5,707 (450 )
Amortization of debt discount on convertible senior notes 2,396 2,396
Change in assets and liabilities, net of acquisitions:
Restricted cash (1,198 ) (82 ) (693 ) 3,163
Accounts receivable 4,428 (1,381 ) 1,205 (10,282 )
Prepaid expenses and other current assets (54,468 ) (3,934 ) (33,528 ) (6,447 )
Accounts payable (4,307 ) (8,559 ) (7,157 ) (6,315 )
Accrued merchant and supplier payables (13,037 ) (33,499 ) (125,462 ) (50,533 )
Accrued expenses and other current liabilities (6,913 ) 8,515 3,935 6,045
Other, net   5,698     (1,379 )   (7,056 )   17,309  
Net cash provided by (used in) operating activities from continuing operations (54,010 ) 13,325 (130,735 ) 56,932
Net cash provided by (used in) operating activities from discontinued operations       6,982         (17,373 )
Net cash provided by (used in) operating activities   (54,010 )   20,307     (130,735 )   39,559  
 
Net cash provided by (used in) investing activities from continuing operations (18,853 ) (28,541 ) (39,631 ) (47,984 )
Net cash provided by (used in) investing activities from discontinued operations       245,094         244,470  
Net cash provided by (used in) investing activities   (18,853 )   216,553     (39,631 )   196,486  
       
Net cash provided by (used in) financing activities   169,225     (141,557 )   91,210     (177,395 )
 
Effect of exchange rate changes on cash and cash equivalents, including cash classified within current assets held for sale   (4,742 )   9,784     5,926     (20,415 )
Net increase (decrease) in cash and cash equivalents, including cash classified within current assets held for sale 91,620 105,087 (73,230 ) 38,235
Less: Net increase (decrease) in cash classified within current assets held for sale       (29,557 )       (55,279 )
Net increase (decrease) in cash and cash equivalents 91,620 134,644 (73,230 ) 93,514
Cash and cash equivalents, beginning of period   688,512     975,504     853,362     1,016,634  
Cash and cash equivalents, end of period $ 780,132   $ 1,110,148   $ 780,132   $ 1,110,148  
(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 increases of $3.3 million and $6.2 million to net cash provided by operating activities and corresponding increases to net cash used in financing activities in the condensed consolidated statement of cash flows for the three and six months ended June 30, 2015, respectively, 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 June 30, Six Months Ended June 30,
2016 2015 2015 2014
Revenue:
Third party and other $ 318,129 $ 340,846 $ 652,697 $ 700,967
Direct   437,901     397,549     835,304     787,784  
Total revenue   756,030     738,395     1,488,001     1,488,751  
Cost of revenue:
Third party and other 43,800 47,545 90,581 99,242
Direct   378,642     353,843     724,504     705,096  
Total cost of revenue   422,442     401,388     815,085     804,338  
Gross profit   333,588     337,007     672,916     684,413  
Operating expenses:
Marketing 91,993 57,007 181,758 109,540
Selling, general and administrative 277,168 288,721 558,156 578,568
Restructuring charges 16,085 28,529
Gains on business dispositions (9,339 ) (9,339 )
Acquisition-related expense (benefit), net   850     505     4,314     236  
Total operating expenses   376,757     346,233     763,418     688,344  
Income (loss) from operations (43,169 ) (9,226 ) (90,502 ) (3,931 )
Other income (expense), net (1)   (10,761 )   2,941     (7,275 )   (16,986 )
Income (loss) from continuing operations before provision (benefit) for income taxes (53,930 ) (6,285 ) (97,777 ) (20,917 )
Provision (benefit) for income taxes   (2,199 )   8,982     (450 )   11,089  
Income (loss) from continuing operations (51,731 ) (15,267 ) (97,327 ) (32,006 )
Income (loss) from discontinued operations, net of tax       127,179         133,463  
Net income (loss) (51,731 ) 111,912 (97,327 ) 101,457
Net income attributable to noncontrolling interests   (3,173 )   (2,828 )   (6,696 )   (6,646 )
Net income (loss) attributable to Groupon, Inc. $ (54,904 ) $ 109,084   $ (104,023 ) $ 94,811  
 
Basic net income (loss) per share:
Continuing operations $ (0.10 ) $ (0.03 ) $ (0.18 ) $ (0.06 )
Discontinued operations       0.19         0.20  
Basic net income (loss) per share $ (0.10 ) $ 0.16   $ (0.18 ) $ 0.14  
 
Diluted net income (loss) per share:
Continuing operations $ (0.10 ) $ (0.03 ) $ (0.18 ) $ (0.06 )
Discontinued operations       0.19         0.20  
Diluted net income (loss) per share $ (0.10 ) $ 0.16   $ (0.18 ) $ 0.14  
 
Weighted average number of shares outstanding
Basic 576,903,004 671,630,169 579,827,341 674,006,553
Diluted 576,903,004 671,630,169 579,827,341 674,006,553
(1) Other income (expense), net includes foreign currency gains (losses) of $(1.3 million) and $2.5 million for the three months ended June 30, 2016 and 2015, respectively, and gains (losses) of $5.1 million and $(17.0 million) for the six months ended June 30, 2016 and 2015, respectively.
 
Groupon, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
   
June 30, 2016 December 31, 2015
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 780,132 $ 853,362
Accounts receivable, net 68,974 68,175
Prepaid expenses and other current assets 190,053 153,705
Total current assets   1,039,159     1,075,242  
Property, equipment and software, net 184,742 198,897
Goodwill 289,289 287,332
Intangible assets, net 29,549 36,483
Investments (including $157,934 and $163,675 at June 30, 2016 and December 31, 2015, respectively, at fair value) 181,051 178,236
Deferred income taxes 4,219 3,454
Other non-current assets   23,433     16,620  
Total Assets $ 1,751,442   $ 1,796,264  
Liabilities and Equity
Current liabilities:
Accounts payable $ 17,573 $ 24,590
Accrued merchant and supplier payables 655,617 776,211
Accrued expenses and other current liabilities   403,932     402,724  
Total current liabilities 1,077,122 1,203,525
Deferred income taxes 6,941 8,612
Other non-current liabilities   124,051     113,540  
Total Liabilities   1,382,129     1,325,677  
Commitments and contingencies
Stockholders' Equity
Class A common stock, par value $0.0001 per share, 2,000,000,000 shares authorized, 726,864,414 shares issued and 572,780,079 shares outstanding at June 30, 2016 and 717,387,446 shares issued and 588,919,281 shares outstanding at December 31, 2015 73 72
Class B common stock, par value $0.0001 per share, 10,000,000 shares authorized, 2,399,976 shares issued and outstanding at June 30, 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 June 30, 2016 and December 31, 2015
Additional paid-in capital 2,070,537 1,964,453
Treasury stock, at cost, 154,084,335 shares at June 30, 2016 and 128,468,165 shares at December 31, 2015 (732,901 ) (645,041 )
Accumulated deficit (1,008,446 ) (901,292 )
Accumulated other comprehensive income (loss)   39,292     51,206  
Total Groupon, Inc. Stockholders' Equity 368,555 469,398
Noncontrolling interests   758     1,189  
Total Equity   369,313     470,587  
Total Liabilities and Equity $ 1,751,442   $ 1,796,264  
 
Groupon, Inc.
Segment Information
(in thousands)
(unaudited)
       
Three Months Ended June 30, Six Months Ended June 30,
2016 2015 2016 2015
North America
Gross billings (1) $ 966,254 $ 896,256 $ 1,903,328 $ 1,790,233
Revenue 516,922 481,282 1,017,735 961,164

Segment cost of revenue and operating expenses (2)(3)

  515,434     454,413     1,027,695     909,629  

Segment operating income (2)

$ 1,488 $ 26,869 $ (9,960 ) $ 51,535
Segment operating income as a percent of segment gross billings 0.2 % 3.0 % (0.5 )% 2.9 %
Segment operating income as a percent of segment revenue 0.3 % 5.6 % (1.0 )% 5.4 %
 
EMEA
Gross billings (1) $ 381,309 $ 433,536 $ 773,536 $ 892,725
Revenue 198,305 204,047 387,275 420,267

Segment cost of revenue and operating expenses (2)(3)

  194,548     194,378     377,602     390,946  

Segment operating income (2)

$ 3,757 $ 9,669 $ 9,673 $ 29,321
Segment operating income as a percent of segment gross billings 1.0 % 2.2 % 1.3 % 3.3 %
Segment operating income as a percent of segment revenue 1.9 % 4.7 % 2.5 % 7.0 %
 
Rest of World
Gross billings (1) $ 145,319 $ 199,221 $ 288,028 $ 398,056
Revenue 40,803 53,066 82,991 107,320

Segment cost of revenue and operating expenses (2)(3)

  50,989     59,858     100,963     118,260  

Segment operating loss (2)

$ (10,186 ) $ (6,792 ) $ (17,972 ) $ (10,940 )
Segment operating loss as a percent of segment gross billings (7.0 )% (3.4 )% (6.2 )% (2.7 )%
Segment operating loss as a percent of segment revenue (25.0 )% (12.8 )% (21.7 )% (10.2 )%
(1) Represents the total dollar value of customer purchases of goods and services, excluding applicable taxes and net of estimated refunds.
(2) Segment cost of revenue and operating expenses and segment operating income (loss) exclude stock-based compensation and acquisition-related expense (benefit), net.
(3) Segment cost of revenue and operating expenses for the three months ended June 30, 2016 includes restructuring charges of $2.8 million in North America, $10.6 million in EMEA (which excludes $2.1 million of stock-based compensation) and $0.6 million in Rest of World (which excludes $0.02 million of stock-based compensation). Segment cost of revenue and operating expenses for the six months ended June 30, 2016 includes restructuring charges of $5.8 million in North America (which excludes $2.6 million of stock-based compensation), $14.0 million in EMEA (which excludes $2.1 million of stock-based compensation) and $3.9 million in Rest of World (which excludes $0.02 million of stock-based compensation).
 
Groupon, Inc.
Non-GAAP Reconciliation Schedules
(in thousands, except share and per share amounts)
(unaudited)
     
Adjusted EBITDA, non-GAAP earnings attributable to common stockholders and non-GAAP earnings per share are non-GAAP performance measures. The Company reconciles Adjusted EBITDA to the most comparable U.S. GAAP performance measure, "Net income (loss) from continuing operations" for the periods presented and the Company reconciles non-GAAP earnings per share to the most comparable U.S. GAAP performance measure, "Diluted net income (loss) per share," for the periods presented.
 
The following is a quarterly reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP performance measure, "Income (loss) from continuing operations."
 
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
Income (loss) from continuing operations $ (15,267 ) $ (24,613 ) $ (32,552 ) $ (45,596 ) $ (51,731 )
Adjustments:
Stock-based compensation (1) 38,467 35,432 32,691 27,976 35,244
Depreciation and amortization 31,372 35,635 33,763 34,797 34,290
Acquisition-related expense (benefit), net 505 1,064 557 3,464 850
Restructuring charges 24,146 5,422 12,444 16,085
Gains on business dispositions (13,710 ) (9,339 )
Prepaid marketing write-off 6,690
Securities litigation expense 37,500
Non-operating expense (income), net (2,941 ) 8,160 3,393 (3,486 ) 10,761
Provision (benefit) for income taxes   8,982     (53,970 )   23,736     1,749     (2,199 )
Total adjustments   76,385     80,947     99,562     76,944     85,692  
Adjusted EBITDA $ 61,118   $ 56,334   $ 67,010  

 

$ 31,348   $ 33,961  
 
(1) Represents stock-based compensation recorded within cost of revenue, marketing expense, and selling, general and administrative expense. Non-operating expense (income), net, includes $0.02 million, $0.1 million, $0.2 million, $0.2 million and $0.2 million of additional stock-based compensation for the three months ended June 30, 2015, September 30, 2015, December 31, 2015, March 31, 2016 and June 30, 2016, respectively. Restructuring charges includes $2.6 million and $2.1 million of additional stock-based compensation for the three months ended March 31, 2016 and June 30, 3016, respectively.
 
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 and six months ended June 30, 2016:
 
Three Months Ended June 30, 2016 Six Months Ended June 30, 2016
Net income (loss) attributable to common stockholders $ (54,904 ) $ (104,023 )
Stock-based compensation (1) 35,392 63,600
Amortization of acquired intangible assets 4,581 9,235
Acquisition-related expense (benefit), net 850 4,314
Restructuring charges 16,085 28,529
Gains on business dispositions (9,339 ) (9,339 )
Intercompany foreign currency losses (gains) and reclassifications of translation adjustments to earnings (2) 356 (5,114 )
Loss from changes in fair value of investments 4,607 5,707
Income tax effect of above adjustments (6,778 ) (6,690 )
Amortization of debt discount on convertible senior notes 2,396 2,396
Income from discontinued operations, net of tax        
Non-GAAP net income (loss) attributable to common stockholders $ (6,754 ) $ (11,385 )
 
Diluted shares 576,903,004 579,827,341
Incremental diluted shares        
Adjusted diluted shares   576,903,004     579,827,341  
 
Diluted net income (loss) per share $ (0.10 ) $ (0.18 )
Per share impact of adjustments and related tax effects   0.09     0.16  
Non-GAAP net income (loss) per share $ (0.01 ) $ (0.02 )
 
(1) Excludes $2.1 and $4.7 million of stock-based compensation classified within restructuring charges for the three and six months ended June 30, 2016, respectively.
(2) For the three and six months ended June 30, 2016, net cumulative translation gains of $1.8 million and $0.3 million were reclassified to earnings as a result of the Company's exit from certain countries as part of its restructuring plan.
  The following is a reconciliation of the Company's annual outlook for Adjusted EBITDA to the Company's outlook for the most comparable U.S. GAAP performance measure, "Net income (loss)."
 
Year Ending December 31, 2016
Expected net income (loss) range $(166,504) to $(143,504)
Expected adjustments:
Stock-based compensation 120,000
Depreciation and amortization 140,000
Acquisition-related expense (benefit), net 4,314
Restructuring charges 28,529
Gains on business dispositions (9,339)
Non-operating expense (income), net 16,000
Provision (benefit) for income taxes 7,000 to 9,000
Total expected adjustments 306,504 to 308,504
Expected Adjusted EBITDA range $140,000 to $165,000
 

The outlook provided above does not reflect the potential impact of any additional restructuring actions that we may decide to pursue, business acquisitions or dispositions, changes in the fair values of investments or contingent consideration, foreign currency gains or losses or other unusual or non-recurring items that may occur during the second half of 2016.

 
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 June 30, 2016 was as follows:
 
Three Months Ended June 30, 2016 Three Months Ended June 30, 2016
At Avg. Q2 2015

Rates (1)

Exchange Rate

Effect(2)

As

Reported

At Avg. Q1 2016

Rates (3)

Exchange Rate

Effect (2)

As

Reported

Gross billings $ 1,504,332 $ (11,450 ) $ 1,492,882 $ 1,478,616 $ 14,266 $ 1,492,882
Revenue 759,676 (3,646 ) 756,030 749,993 6,037 756,030
Income (loss) from operations $ (42,956 ) $ (213 ) $ (43,169 ) $ (42,364 ) $ (805 ) $ (43,169 )
 
The effect on the Company's gross billings, revenue and income (loss) from operations from changes in exchange rates versus the U.S. Dollar for the six months ended June 30, 2016 was as follows:
 
Six Months Ended June 30, 2016 Six Months Ended June 30, 2016
At Avg. Q2 2015 YTD

Rates (1)

Exchange Rate

Effect (2)

As Reported At Avg. Q4'15-Q1'16

Rates (3)

Exchange Rate

Effect (2)

As Reported
Gross billings $ 3,012,044 $ (47,152 ) $ 2,964,892 $ 2,957,600 $ 7,292 $ 2,964,892
Revenue 1,505,773 (17,772 ) 1,488,001 1,484,866 3,135 1,488,001
Income (loss) from operations $ (90,059 ) $ (443 ) $ (90,502 ) $ (88,811 ) $ (1,691 ) $ (90,502 )
 
(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 and six months ended June 30, 2015.
(2) Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable prior periods.
(3) Represents the financial statement balances that would have resulted had average exchange rates in the reporting periods been the same as those in effect during the three and six months ended March 31, 2016.
 
The following is a quarterly reconciliation of foreign exchange rate neutral Gross billings growth from the comparable quarterly periods of the prior year to reported Gross billings growth from the comparable quarterly periods of the prior year.
 
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
EMEA Gross billings growth, excluding FX 9 % (1 ) % (2 ) % (12 ) % (12 ) %
FX Effect   (19 )     (14 )     (11 )     (3 )      
EMEA Gross billings growth (10 ) % (15 ) % (13 ) % (15 ) % (12 ) %
 
Rest of World Gross billings growth, excluding FX 6 % % (7 ) % (17 ) % (21 ) %
FX Effect   (15 )     (19 )     (14 )     (11 )     (6 )
Rest of World Gross billings growth (9 ) % (19 ) % (21 ) % (28 ) % (27 ) %
 
Consolidated Gross billings growth, excluding FX 10 % 6 % 4 % (3 ) % (2 ) %
FX Effect   (8 )     (8 )     (5 )     (2 )      
Consolidated Gross billings growth 2 % (2 ) % (1 ) % (5 ) % (2 ) %
 
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.
 
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
EMEA Revenue growth, excluding FX 9 % 2 % 3 % (10 ) % (3 ) %
FX Effect   (19 )     (15 )     (12 )     (3 )      
EMEA Revenue growth (10 ) % (13 ) % (9 ) % (13 ) % (3 ) %
 
Rest of World Revenue growth, excluding FX (4 ) % (5 ) % (8 ) % (8 ) % (14 ) %
FX Effect   (14 )     (18 )     (15 )     (14 )     (9 )
Rest of World Revenue growth (18 ) % (23 ) % (23 ) % (22 ) % (23 ) %
 
Consolidated Revenue growth, excluding FX 11 % 7 % 9 % (1 ) % 3 %
FX Effect   (8 )     (7 )     (5 )     (1 )     (1 )
Consolidated Revenue growth 3 % % 4 % (2 ) % 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 June 30, 2016 was as follows:
       
At Avg. Q2

2015 Rates (1)

Exchange

Rate

Effect (2)

June 30, 2016

As Reported

June 30, 2015

As Reported

Y/Y %

Growth

Y/Y% Growth excluding FX
 
Local:
Third party and other $ 542,675 $ (236 ) $ 542,439 $ 499,378 8.6 % 8.7 %
 
Travel:
Third party   105,435   (47 )   105,388     102,908 2.4 % 2.5 %
Total services 648,110 (283 ) 647,827 602,286 7.6 % 7.6 %
 
Goods:
Third party 9,520 (111 ) 9,409 8,778 7.2 % 8.5 %
Direct   309,018       309,018     285,192 8.4 % 8.4 %
Total 318,538 (111 ) 318,427 293,970 8.3 % 8.4 %
             
Total gross billings $ 966,648   $ (394 )   $ 966,254     $ 896,256 7.8 % 7.9 %
 
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 June 30, 2016 was as follows:
 
At Avg. Q2

2015 Rates (1)

Exchange

Rate

Effect (2)

June 30, 2016

As Reported

June 30, 2015

As Reported

Y/Y %

Growth

Y/Y% Growth excluding FX
 
Local:
Third party and other $ 166,913 $ (1,623 ) $ 165,290 $ 198,553 (16.8 ) % (15.9 ) %
 
Travel:
Third party   52,166   714     52,880     59,544 (11.2 ) % (12.4 ) %
Total services 219,079 (909 ) 218,170 258,097 (15.5 ) % (15.1 ) %
 
Goods:
Third party 41,686 (210 ) 41,476 69,737 (40.5 ) % (40.2 ) %
Direct   119,647   2,016     121,663     105,702 15.1 % 13.2 %

Total

161,333 1,806 163,139 175,439 (7.0 ) % (8.0 ) %
             
Total gross billings $ 380,412   $ 897     $ 381,309     $ 433,536 (12.0 ) % (12.3 ) %
 
The effect on Rest of World's gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended June 30, 2016 was as follows:
 
At Avg. Q2

2015 Rates (1)

Exchange

Rate

Effect (2)

June 30, 2016

As Reported

June 30, 2015

As Reported

Y/Y %

Growth

Y/Y% Growth excluding FX
 
Local:
Third party and other $ 90,610 $ (6,029 ) $ 84,581 $ 100,403 (15.8 ) % (9.8 ) %
 
Travel:
Third party   24,840   (2,540 )   22,300     31,263 (28.7 ) % (20.5 ) %

Total services

115,450 (8,569 ) 106,881 131,666 (18.8 ) % (12.3 ) %
 
Goods:
Third party 32,678 (1,460 ) 31,218 60,900 (48.7 ) % (46.3 ) %
Direct   9,144   (1,924 )   7,220     6,655 8.5 % 37.4 %
Total 41,822 (3,384 ) 38,438 67,555 (43.1 ) % (38.1 ) %
             
Total gross billings $ 157,272   $ (11,953 )   $ 145,319     $ 199,221 (27.1 ) % (21.1 ) %
 
The effect on consolidated gross billings by category from changes in foreign exchange rates versus the U.S. Dollar for the three months ended June 30, 2016 was as follows:
 

At Avg. Q2

2015 Rates (1)

Exchange

Rate

Effect (2)

June 30, 2016

As Reported

June 30, 2015

As Reported

Y/Y %

Growth

Y/Y% Growth excluding FX
 
Local:
Third party and other $ 800,198 $ (7,888 ) $ 792,310 $ 798,334 (0.8 ) % 0.2 %
 
Travel:
Third party   182,441   (1,873 ) $ 180,568     193,715 (6.8 ) % (5.8 ) %
Total services 982,639 (9,761 ) 972,878 992,049 (1.9 ) % (0.9 ) %
 
Goods:
Third party 83,884 (1,781 ) 82,103 139,415 (41.1 ) % (39.8 ) %
Direct   437,809   92     437,901     397,549 10.2 % 10.1 %
Total 521,693 (1,689 ) 520,004 536,964 (3.2 ) % (2.8 ) %
             
Total gross billings $ 1,504,332   $ (11,450 )   $ 1,492,882     $ 1,529,013 (2.4 ) % (1.6 ) %
 
(1) Represents the financial statement balances that would have resulted had average exchange rates in the reporting period been the same as those in effect during the three months ended June 30, 2015.
(2) Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable prior year period.
 
 
 
The following is a reconciliation of same country gross billings growth for the three months ended June 30, 2016 from the prior year period:
June 30 2016 June 30 2015 Y/Y % Growth
 
 
Gross Billings as Reported $ 1,492,882 $ 1,529,013 -2.4 %
Less: Gross billings from countries where groupon no longer operates       (50,115 )
Same country gross billings $ 1,492,882   $ 1,478,898   0.9 %
 
 
The following is a reconciliation of foreign exchange rate neutral same country revenue growth for our international operations for the three months ended June 30, 2016 from the prior year period:
 
 

June 30 2016

June 30 2015 Y/Y %
 
EMEA and Rest of World segment revenue as reported $ 239,108 $ 257,113 -7.0 %
Less: Revenue from countries where Groupon no longer operates (15,911 )
Exchange rate effect (1)   3,536    
EMEA and Rest of World segment revenue on a foreign exchange rate neutral same country basis $ 242,644   $ 241,202   0.6 %
 

(1) Represents the increase or decrease in reported amounts resulting from changes in exchange rates from those in effect in the comparable prior

year period.

Groupon, Inc.
Supplemental Financial Information and Business Metrics (9)(11)
(financial data in thousands; active customers in millions)
(unaudited)
 
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
Segments
North America Segment:
Gross Billings (1):
Local (2) Gross Billings $ 499,378 $ 481,608 $ 531,154 $ 539,623 $ 542,439
Travel Gross Billings   102,908     101,801     89,389     103,390     105,388  
Gross Billings - Services 602,286 583,409 620,543 643,013 647,827
Gross Billings - Goods   293,970     285,794     429,818     294,061     318,427  
Total Gross Billings $ 896,256   $ 869,203   $ 1,050,361   $ 937,074   $ 966,254  
Year-over-year growth 12 % 12 % 11 % 5 % 8 %
% Third Party and Other 68 % 68 % 60 % 70 % 68 %
% Direct 32 % 32 % 40 % 30 % 32 %
Gross Billings Trailing Twelve Months (TTM) $ 3,513,098 $ 3,608,015 $ 3,709,797 $ 3,752,894 $ 3,822,892
 
Revenue (3):
Local Revenue $ 172,461 $ 163,786 $ 184,201 $ 192,153 $ 184,139
Travel Revenue   21,958     21,394     18,390     20,914       21,401  
Revenue - Services 194,419 185,180 202,591 213,067 205,540
Revenue - Goods   286,863     278,751     420,056     287,746     311,382  
Total Revenue $ 481,282   $ 463,931   $ 622,647   $ 500,813   $ 516,922  
Year-over-year growth 14 % 11 % 13 % 4 % 7 %
% Third Party and Other 41 % 40 % 33 % 43 % 40 %
% Direct 59 % 60 % 67 % 57 % 60 %
Revenue TTM $ 1,930,632 $ 1,976,069 $ 2,047,742 $ 2,068,673 $ 2,104,313
 
Gross Profit (4):
Local Gross Profit $ 147,574 $ 138,798 $ 159,745 $ 164,018 $ 158,812
% of North America Local Gross Billings 29.6 % 28.8 % 30.1 % 30.4 % 29.3 %
Travel Gross Profit 18,385 17,644 15,207 15,712 16,334
% of North America Travel Gross Billings   17.9   %   17.3   %   17.0   %   15.2   %   15.5   %
Gross Profit - Services 165,959 156,442 174,952 179,730 175,146
% of North America Services Gross Billings 27.6 % 26.8 % 28.2 % 28.0 % 27.0 %
Gross Profit - Goods 30,598 34,801 44,329 36,213 42,028
% of North America Goods Gross Billings   10.4   %   12.2   %   10.3   %   12.3   %   13.2   %
Total Gross Profit $ 196,557   $ 191,243   $ 219,281   $ 215,943   $ 217,174  
Year-over-year growth 9 % 9 % 12 % 11 % 10 %
% Third Party and Other 85 % 83 % 81 % 84 % 82 %
% Direct 15 % 17 % 19 % 16 % 18 %
% of North America Total Gross Billings 21.9 % 22.0 % 20.9 % 23.0 % 22.5 %
 
EMEA Segment:
Gross Billings:
Local Gross Billings $ 198,553 $ 182,540 $ 197,445 $ 174,033 $ 165,290
Travel Gross Billings   59,544     64,916     59,836     57,201     52,880  
Gross Billings - Services 258,097 247,456 257,281 231,234 218,170
Gross Billings - Goods   175,439     167,026     229,866     160,993     163,139  
Total Gross Billings $ 433,536   $ 414,482   $ 487,147   $ 392,227   $ 381,309  
Year-over-year growth (10 ) % (15 ) % (13 ) % (15 ) % (12 ) %
Year-over-year growth, excluding FX 9 % (1 ) % (2 ) % (12 ) % (12 ) %
% Third Party and Other 76 % 75 % 70 % 73 % 68 %
% Direct 24 % 25 % 30 % 27 % 32 %
Gross Billings TTM $ 1,942,689 $ 1,867,748 $ 1,794,354 $ 1,727,392 $ 1,675,165
 
Revenue:
Local Revenue $ 75,543 $ 70,781 $ 73,225 $ 61,886 $ 60,616
Travel Revenue   13,100     13,561     11,681     11,178     10,709  
Revenue - Services 88,643 84,342 84,906 73,064 71,325
Revenue - Goods   115,404     114,945     163,420     115,906     126,980  
Total Revenue $ 204,047   $ 199,287   $ 248,326   $ 188,970   $ 198,305  
Year-over-year growth (10 ) % (13 ) % (9 ) % (13 ) % (3 ) %
Year-over-year growth, excluding FX 9 % 2 % 3 % (10 ) % (3 ) %
% Third Party and Other 48 % 48 % 41 % 44 % 39 %
% Direct 52 % 52 % 59 % 56 % 61 %
Revenue TTM $ 922,814 $ 892,029 $ 867,880 $ 840,630 $ 834,888
 
Gross Profit:
Local Gross Profit $ 70,270 $ 66,288 $ 68,966 $ 58,263 $ 56,849
% of EMEA Local Gross Billings 35.4 % 36.3 % 34.9 % 33.5 % 34.4 %
Travel Gross Profit 11,939 12,323 10,732 10,215 9,784
% of EMEA Travel Gross Billings   20.1   %   19.0   %   17.9   %   17.9   %   18.5   %
Gross Profit - Services 82,209 78,611 79,698 68,478 66,633
% of EMEA Services Gross Billings 31.9 % 31.8 % 31.0 % 29.6 % 30.5 %
Gross Profit - Goods 21,878 24,905 43,026 26,412 23,525
% of EMEA Goods Gross Billings   12.5   %   14.9   %   18.7   %   16.4   %   14.4   %
Total Gross Profit $ 104,087   $ 103,516   $ 122,724   $ 94,890   $ 90,158  
Year-over-year growth (26 ) % (21 ) % (14 ) % (18 ) % (13 ) %
% Third Party and Other 86 % 86 % 77 % 82 % 79 %
% Direct 14 % 14 % 23 % 18 % 21 %
% of EMEA Total Gross Billings 24.0 % 25.0 % 25.2 % 24.2 % 23.6 %
 
Rest of World Segment:
Gross Billings:
Local Gross Billings $ 100,403 $ 92,972 $ 83,430 $ 75,294 $ 84,581
Travel Gross Billings   31,263     30,709     25,369     23,928     22,300  
Gross Billings - Services 131,666 123,681 108,799 99,222 106,881
Gross Billings - Goods   67,555     60,168     60,685     43,487     38,438  
Total Gross Billings $ 199,221   $ 183,849   $ 169,484   $ 142,709   $ 145,319  
Year-over-year growth (9 ) % (19 ) % (21 ) % (28 ) % (27 ) %
Year-over-year growth, excluding FX 6 % % (7 ) % (17 ) % (21 ) %
% Third Party and Other 97 % 96 % 95 % 95 % 95 %
% Direct 3 % 4 % 5 % 5 % 5 %

Gross Billings TTM

$ 840,243 $ 797,454 $ 751,389 $ 695,263 $ 641,361
 
Revenue:
Local Revenue $ 28,499 $ 26,372 $ 22,229 $ 22,082 $ 22,461
Travel Revenue   6,363     6,135     5,098     5,049     4,321  
Revenue - Services 34,862 32,507 27,327 27,131 26,782
Revenue - Goods   18,204     17,870     18,870     15,057     14,021  
Total Revenue $ 53,066   $ 50,377   $ 46,197   $ 42,188   $ 40,803  
Year-over-year growth (18 ) % (23 ) % (23 ) % (22 ) % (23 ) %
Year-over-year growth, excluding FX (4 ) % (5 ) % (8 ) % (8 ) % (14 ) %
% Third Party and Other 87 % 86 % 82 % 85 % 82 %
% Direct 13 % 14 % 18 % 15 % 18 %
Revenue TTM $ 232,802 $ 217,476 $ 203,894 $ 191,828 $ 179,565
 
Gross Profit:
Local Gross Profit $ 24,567 $ 22,568 $ 18,889 $ 18,771 $ 18,739
% of Rest of World Local Gross Billings 24.5 % 24.3 % 22.6 % 24.9 % 22.2 %
Travel Gross Profit 5,012 4,859 4,040 3,997 3,240
% of Rest of World Travel Gross Billings   16.0   %   15.8   %   15.9   %   16.7   %   14.5   %
Gross Profit - Services 29,579 27,427 22,929 22,768 21,979
% of Rest of World Services Gross Billings 22.5 % 22.2 % 21.1 % 22.9 % 20.6 %
Gross Profit - Goods 6,784 6,726 6,806 5,727 4,277
% of Rest of World Goods Gross Billings   10.0   %   11.2   %   11.2   %   13.2   %   11.1   %
Total Gross Profit $ 36,363   $ 34,153   $ 29,735   $ 28,495   $ 26,256  
Year-over-year growth (20 ) % (28 ) % (23 ) % (24 ) % (28 ) %
% Third Party and Other 99 % 99 % 99 % 100 % 99 %
% Direct 1 % 1 % 1 % % 1 %
% of Rest of World Total Gross Billings 18.3 % 18.6 % 17.5 % 20.0 % 18.1 %
 
Consolidated Results of Operations:
Gross Billings:
Local Gross Billings $ 798,334 $ 757,120 $ 812,029 $ 788,950 $ 792,310
Travel Gross Billings   193,715     197,426     174,594     184,519     180,568  
Gross Billings - Services 992,049 954,546 986,623 973,469 972,878
Gross Billings - Goods   536,964     512,988     720,369     498,541     520,004  
Total Gross Billings $ 1,529,013   $ 1,467,534   $ 1,706,992   $ 1,472,010   $ 1,492,882  
Year-over-year growth 2 % (2 ) % (1 ) % (5 ) % (2 ) %
Year-over-year growth, excluding FX 10 % 6 % 4 % (3 ) % (2 ) %
% Third Party and Other 74 % 74 % 66 % 73 % 71 %
% Direct 26 % 26 % 34 % 27 % 29 %
Gross Billings TTM $ 6,296,030 $ 6,273,217 $ 6,255,540 $ 6,175,549 $ 6,139,418
Year-over-year growth 6 % 3 % % (1 ) % (2 ) %
 
Revenue:
Local Revenue $ 276,503 $ 260,939 $ 279,655 $ 276,121 $ 267,216
Travel Revenue   41,421     41,090     35,169     37,141     36,431  
Revenue - Services 317,924 302,029 314,824 313,262 303,647
Revenue - Goods   420,471     411,566     602,346     418,709     452,383  
Total Revenue $ 738,395   $ 713,595   $ 917,170   $ 731,971   $ 756,030  
Year-over-year growth 3 % % 4 % (2 ) % 2 %
Year-over-year growth, excluding FX 11 % 7 % 9 % (1 ) % 3 %
% Third Party and Other 46 % 46 % 38 % 46 % 42 %
% Direct 54 % 54 % 62 % 54 % 58 %
Revenue TTM $ 3,086,248 $ 3,085,574 $ 3,119,516 $ 3,101,131 $ 3,118,766
Year-over-year growth 10 % 5 % 3 % 1 % %
 
Gross Profit:
Local Gross Profit $ 242,411 $ 227,654 $ 247,600 $ 241,052 $ 234,400
% of Consolidated Local Gross Billings 30.4 % 30.1 % 30.5 % 30.6 % 29.6 %
Travel Gross Profit 35,336 34,826 29,979 29,924 29,358
% of Consolidated Travel Gross Billings   18.2   %   17.6   %   17.2   %   16.2   %   16.3   %
Gross Profit - Services 277,747 262,480 277,579 270,976 263,758
% of Consolidated Services Gross Billings 28.0 % 27.5 % 28.1 % 27.8 % 27.1 %
Gross Profit - Goods 59,260 66,432 94,161 68,352 69,830
% of Consolidated Goods Gross Billings   11.0   %   13.0   %   13.1   %   13.7   %   13.4   %
Total Gross Profit $ 337,007   $ 328,912   $ 371,740   $ 339,328   $ 333,588  
Year-over-year growth (8 ) % (7 ) % (2 ) % (2 ) % (1 ) %
% Third Party and Other 87 % 85 % 81 % 85 % 82 %
% Direct 13 % 15 % 19 % 15 % 18 %
% of Total Consolidated Gross Billings 22.0 % 22.4 % 21.8 % 23.1 % 22.3 %
 
Marketing $ 57,007 $ 61,587 $ 83,208 $ 89,765 $ 91,993
Selling, general and administrative $ 288,721 $ 326,248 $ 287,976 $ 280,988 $ 277,168
Income (loss) from continuing operations $ (15,267 ) $ (24,613 ) $ (32,552 ) $ (45,596 ) $ (51,731 )
Adjusted EBITDA $ 61,118 $ 56,334 $ 67,010 $ 31,348 $ 33,961
% of Total Consolidated Gross Billings 4.0 % 3.8 % 3.9 % 2.1 % 2.3 %
% of Total Consolidated Revenue 8.3 % 7.9 % 7.3 % 4.3 % 4.5 %
 
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."
 
Q2 2015 (10) Q3 2015 (10) Q4 2015 (10) Q1 2016 Q2 2016
 
Net cash provided by (used in) operating activities from continuing operations $ 13,325 $ (7,640 ) $ 250,455 $ (76,725 ) $ (54,010 )
Purchases of property and equipment and capitalized software from continuing operations   (22,452 )   (27,735 )   (15,507 )   (19,952 )   (16,395 )
Free cash flow $ (9,127 ) $ (35,375 ) $ 234,948 $ (96,677 ) $ (70,405 )
 
Net cash provided by (used in) operating activities from continuing operations (TTM) $ 358,576 $ 325,971 $ 299,747 $ 179,415 $ 112,080
Purchases of property and equipment and capitalized software from continuing operations (TTM)   (79,501 )   (88,598 )   (83,988 ) $ (85,646 )   (79,589 )
Free cash flow (TTM) $ 279,075 $ 237,373 $ 215,759 $ 93,769 $ 32,491
 
Net cash provided by (used in) investing activities from continuing operations $ (28,541 ) $ (98,028 ) $ (31,238 ) (20,778 ) (18,853 )
Net cash provided by (used in) financing activities $ (141,557 ) $ (14,793 ) $ (323,597 ) (78,015 ) 169,225
 
Net cash provided by (used in) investing activities from continuing operations (TTM) $ (102,205 ) $ (181,187 ) $ (177,250 ) (178,585 ) (168,897 )
Net cash provided by (used in) financing activities (TTM) $ (221,354 ) $ (216,683 ) $ (515,785 ) (557,962 ) (247,180 )
 
Other Metrics:
Active Customers (6)