Groupon (GRPN) shares surged 43% on Wednesday after the discount coupon provider reported better-than-expected fourth-quarter earnings and issued an upbeat forecast for 2025.
The company rebounded strongly after a challenging third quarter, with CEO Dusan Senkypl highlighting significant improvements in North American local billings and the company’s first positive free cash flow since the pandemic.
For the fourth quarter, Groupon posted adjusted EBITDA of $18.7 million, surpassing the $17.9 million estimate from analysts surveyed by Visible Alpha. While revenue declined 5% year-over-year to $130.4 million, it still exceeded analyst projections of $127.7 million. North American local billings grew by 8% to $276.4 million, indicating a turnaround in its core market.
Upbeat Guidance for 2025 Boosts Investor Confidence
Groupon provided an optimistic outlook for 2025, forecasting revenue between $493 million and $500 million, with adjusted EBITDA expected to range from $70 million to $75 million. Both figures topped Bloomberg's consensus estimates of $491.3 million and $74.8 million, respectively. The company also projects at least $41 million in free cash flow for the year, reinforcing investor confidence in its recovery trajectory.
Senkypl acknowledged the difficulties faced in the third quarter, citing disruptions from tech migrations that impacted performance. However, he emphasized that the company now sees encouraging signs of sustained growth. North America’s Q4 gross billings rose 3%, offsetting an 11% decline in international billings. Active customers stood at 15.4 million, remaining flat sequentially but down 6% year-over-year.
Despite these positive indicators, Groupon reported a net loss of $50.6 million ($1.20 per share) compared to a profit of $27.7 million ($0.76 per share) in the same period last year. The decline was attributed to falling revenue, rising operating costs, and a $44.4 million other expense.
Groupon Positions Itself for Growth in 2025
Senkypl acknowledged the difficulties faced in the third quarter, citing disruptions from tech migrations that impacted performance. However, he emphasized that the company now sees encouraging signs of sustained growth. North America’s Q4 gross billings rose 3%, offsetting an 11% decline in international billings. Active customers stood at 15.4 million, remaining flat sequentially but down 6% year-over-year.
Despite these positive indicators, Groupon reported a net loss of $50.6 million ($1.20 per share) compared to a profit of $27.7 million ($0.76 per share) in the same period last year. The decline was attributed to falling revenue, rising operating costs, and a $44.4 million other expense.
Groupon Positions Itself for Growth in 2025
Groupon’s latest guidance suggests a stronger footing heading into 2025. The company expects full-year revenue to remain flat or grow up to 2%, countering prior analyst expectations of a decline. First-quarter revenue is projected to be between $114 million and $117 million, aligning with FactSet’s consensus estimate of $115.98 million.
The company’s turnaround efforts focus on strengthening its North American operations, where it continues to see momentum. While challenges remain, particularly in international markets, Groupon’s improved financial position and strategic initiatives suggest a path toward sustainable growth.
Despite Wednesday’s rally, Groupon shares remain down approximately 30% over the past 12 months. However, with an improving business outlook and a commitment to operational efficiency, investors are betting on the company’s ability to sustain its recovery in the year ahead.
The company’s turnaround efforts focus on strengthening its North American operations, where it continues to see momentum. While challenges remain, particularly in international markets, Groupon’s improved financial position and strategic initiatives suggest a path toward sustainable growth.
Despite Wednesday’s rally, Groupon shares remain down approximately 30% over the past 12 months. However, with an improving business outlook and a commitment to operational efficiency, investors are betting on the company’s ability to sustain its recovery in the year ahead.
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