Groupon GRPN reported earnings of 18 cents per share in the first quarter of 2025, which beat the Zacks Consensus Estimate by 190%. The company had incurred a loss of 33 cents per share in the year-ago quarter.
The company’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, delivering a negative average surprise of 394.50%.
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Revenues of $117.2 million beat the consensus estimate by 1.46%. The figure decreased 4.8% on a year-over-year basis.
Region-wise, North America’s revenues of $91.11 million beat the consensus mark by 2% and declined 3.2% year over year. International revenues of $26.07 million missed the consensus mark by 3.09% and decreased 9.9% year over year (7.9% excluding the foreign exchange effect).
Groupon, Inc. Price, Consensus and EPS Surprise
Groupon, Inc. price-consensus-eps-surprise-chart | Groupon, Inc. Quote
GRPN’s Quarterly Details
Local revenues of $108.4 million beat the Zacks Consensus Estimate by 3.28% and declined 2.6% year over year. North America Local revenues decreased 0.6%, while International Local revenues declined 9.4% year over year.
Consolidated Travel revenues of $5.05 million missed the consensus mark by 21.57% and decreased 20.5% year over year. North America Travel revenues decreased 20.4% year over year. International Travel revenues declined 20.7% in the reported quarter (17.4% excluding the foreign exchange effect).
On a consolidated basis, Goods revenues of $3.78 million missed the consensus mark by 10.33% and declined 31.6% year over year. North America Goods revenues declined 50.9% and International Goods revenues decreased 4.7%, excluding the foreign exchange effect, on a year-over-year basis.
GRPN’s Customer Metrics
At the end of the first quarter, Groupon had approximately 15.5 million active customers compared with 16.1 million at the end of the year-ago quarter. However, the metric beat the Zacks Consensus Estimate by 5.66%.
The company had approximately 10.5 million active customers based in North America, beating the consensus mark by 6.38%. GRPN had 5 million active international customers, beating the consensus mark by 4.17%.
Operating Details of GRPN
In the first quarter, Groupon’s consolidated gross profit fell 3.9% from the year-ago period’s levels to $106.3 million. North America gross profit fell 1.5% and International gross profit declined 9.4%, excluding the foreign exchange effect, on a year-over-year basis.
Gross margin expanded 90 basis points to 90.7%.
Selling, general and administrative expenses fell 6% year over year to $69.84 million. Marketing expenses increased 19.5% year over year to $34.4 million.
The company reported a GAAP operating profit of $1.88 million compared with a profit of $7.37 million in the year-ago quarter. Also, adjusted EBITDA declined 21.5% to $15.3 million.
GRPN’s Balance Sheet & Cash Flow
Groupon exited the quarter with cash and cash equivalents of $226.8 million, down from $228.8 million as of Dec. 31, 2024.
In the first quarter, the operating cash inflow was the same as the cash inflow of $67 million in the prior quarter.
Groupon reported a free cash outflow of $3.8 million against $63.2 million of free cash inflow reported in the previous quarter.
GRPN’s Guidance
For the second quarter of 2025, the company expects revenues in the band of $121-$123 million, indicating a 3-1% year-over-year decline. The Zacks Consensus Estimate for first-quarter 2025 revenues is pegged at $121.39 million, indicating a 2.59% year-over-year decline.
Adjusted EBITDA is expected to be between $14 million and $17 million.
Groupon expects a flat free cash flow for the second quarter.
For 2025, the company expects revenues between $493 million and $500 million, indicating a year-over-year growth of 0-2%.
Adjusted EBITDA is expected to be between $70 million and $75 million.
Groupon expects a positive free cash flow of at least $41 million for 2025.
Zacks Rank and Stocks to Consider
Currently, GRPN carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Retail-Wholesale sector are Alibaba BABA, Costco Wholesale COST and Canada Goose GOOS, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Alibaba have gained 48.4% year to date. It is set to report fourth-quarter fiscal 2025 results on May 15.
Shares of COST have gained 10% year to date. It is slated to report third-quarter fiscal 2025 results on May 29.
Shares of GOOS have lost 14% year to date. It is set to report fourth-quarter fiscal 2025 results on May 21.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
