Groupon — Second Quarter 2026 Earnings Summary

Financial Performance

• Global revenue decreased 1% year-over-year; global billings decreased 1% (down 1% on an FX-neutral basis).
• North America local revenue decreased 2% and local billings decreased 1%.
• International local revenue increased 8% and local billings increased 2% (down 1% FX-neutral); excluding Giftcloud, international local revenue increased 9% and billings increased 5%.
• Loss from continuing operations was $1.5 million, compared to income of $20.6 million in the prior year period.
• Adjusted EBITDA was $14.8 million, compared to $15.6 million in the prior year period.
• Operating cash inflow from continuing operations was $18.1 million.
• Free cash flow was positive $15.0 million.
• Cash and cash equivalents totaled $226.3 million as of June 30, 2026.
• The company recorded $3.2 million in restructuring charges in the second quarter under its 2026 Restructuring Plan.

Guidance and Future Outlook

• Q3 2026 billings guidance is +4% to +6% year-over-year.
• Q3 2026 revenue guidance is $128 million to $130 million.
• Q3 2026 Adjusted EBITDA guidance is $19 million to $21 million.
• Q3 2026 free cash flow is expected to be negative.
• Full year 2026 billings guidance is +3% to +5% year-over-year.
• Full year 2026 revenue guidance is $513 million to $523 million.
• Full year 2026 Adjusted EBITDA guidance is $75 million to $80 million.
• Full year 2026 free cash flow is expected to be at least $60 million.
• Management expects growth to accelerate in the second half of 2026, citing momentum entering the third quarter.

Business Segments and Product Lines

• Active customers grew 2% year-over-year to 16.1 million, with growth in both North America and International Local categories.
• Unit sales were 8.5 million, down 7% year-over-year, driven by lower transaction volume in North America and International, partially offset by an increase in average order value.
• North America performance was impacted by softness in Health, Beauty & Wellness, partially offset by strength in Things to Do and recovery in organic and managed channels.
• International performance was driven by improved organic performance from the new consumer platform and expanded seasonally relevant supply in major cities, led by Health, Beauty & Wellness and Things to Do.
• Project Foundry, an AI-native transformation, is nearing completion with conversion improving on nearly every surface.
• The company scaled new personalization and trust and quality capabilities across its consumer platform.
• Organic channels returned to growth and managed channels continued to improve.

Market and Competitive Landscape

• The company noted softness in the Health, Beauty & Wellness sector within North America.
• Management highlighted competition in the industry and the need to retain and add high-quality merchants and third-party business partners.

Risks and Challenges

• Risks include the ability to execute the go-forward strategy and realize benefits of the AI-native transformation.
• Potential adverse effects from AI strategy deployment on operations, merchants, and customers.
• Volatility in operating results and challenges arising from international operations, including currency exchange rate fluctuations.
• Global economic uncertainty, including inflationary pressures.
• Risks related to cybersecurity breaches, payment-related risks, and customer/merchant fraud.
• Regulatory compliance risks, including privacy laws (GDPR, CPRA) and classification of independent contractors.
• Risks associated with outstanding indebtedness (2027 Notes and 2030 Notes) and access to capital.

Management Commentary and Tone

• CEO Dusan Senkypl stated that Project Foundry is the most consequential work underway and expressed being "extremely pleased with the progress" made just over four months into the initiative.
• Management acknowledged Q2 fell slightly short on the top line but expressed confidence in the outlook for the second half of 2026.
• The tone indicated confidence in strategic bets, citing organic channel growth, managed channel improvements, and scaling personalization.

Other Key Points

• The 2026 Restructuring Plan is underway and on track, with payroll actions estimated to result in $20.0 million to $25.0 million in annualized cost savings.
• The Company estimates total pre-tax restructuring charges of $7.0 million to $13.0 million, with a majority of headcount reductions expected by the end of the third quarter.
• A conference call regarding these results was scheduled for August 7, 2026.
• The company filed its Form 10-Q with the SEC.