Groupon, Inc.

What they do

Groupon operates two segments, North America and International, and three categories: Local, Goods and Travel. It earns commissions by selling goods or services on behalf of third-party merchants, and also earns commissions when customers use digital coupons accessed through its properties. Consumers access the marketplace through mobile apps and primarily localized groupon.com sites, and approximately 84% of global transactions in 2025 were completed on mobile devices.

Revenue drivers

• Local — Experiences and services from local and national merchants, including things to do, beauty and wellness, food and drink, home and automotive services; includes other revenue primarily generated through local and national merchant relationships.
• Goods — Commissions from transactions in which third-party merchants sell products through Groupon marketplaces, spanning electronics, sporting goods, jewelry, toys, household items and apparel.
• Travel — Travel experiences at discounted and market rates, including hotels, airfare and package deals; some customers book directly through Groupon sites and apps, while others must contact the merchant directly after purchasing a voucher.

Recent performance

Second quarter 2026 global revenue and billings each fell 1% year-over-year, with North America Local revenue down 2% and International Local revenue up 8%. Active customers grew 2% to 16.1 million, while unit sales fell 7% to 8.5 million. Loss from continuing operations was $1.5 million versus income of $20.6 million a year earlier, and Adjusted EBITDA was $14.8 million versus $15.6 million. Operating cash inflow from continuing operations was $18.1 million and free cash flow was $15.0 million. Cash and cash equivalents were $226.3 million at June 30, 2026.

Strategy

The company is executing Project Foundry, an AI-native redesign of how Groupon operates, and says the new consumer platform rollout nears completion with conversion improving on nearly every surface. It is investing in product and engineering to build API architecture, AI-ready search and checkout, and internal AI tools. Priorities include smarter discovery, deeper personalization, and growth in organic and managed channels. A May 2026 restructuring plan is underway, with payroll actions estimated to produce $20.0 million to $25.0 million in annualized cost savings.

Risks

• Strategy execution — Groupon states its strategy may be unsuccessful and may not achieve expected benefits, which could negatively affect its business, financial condition and results of operations.
• Restructuring disruption — The company warns future restructuring plans could disrupt operations and that it may not realize some or all anticipated benefits in the expected timeframe or at all.
• Customer and merchant retention — Groupon says its future success depends on attracting and retaining high-quality merchants and partners, and that failing to retain existing or acquire new customers would harm operating results.
• Internal control weaknesses — Groupon previously identified material weaknesses in internal control over financial reporting and warns that failure to maintain effective controls could impair accurate and timely financial reporting.

Outlook

For Q3 2026, management guides billings growth of 4% to 6% and revenue of $128 million to $130 million, with Adjusted EBITDA of $19 million to $21 million. For full-year 2026, it guides billings growth of 3% to 5%, revenue of $513 million to $523 million, Adjusted EBITDA of $75 million to $80 million, and free cash flow of at least $60 million. Management said Q2 fell slightly short on the top line but that it entered the third quarter with momentum and expects growth to accelerate in the second half.