Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
  1. Homepage
  2. Equities
  3. United States
  4. Nasdaq
  5. Groupon, Inc.
  6. News
  7. Summary
    GRPN   US3994732069

GROUPON, INC.

(GRPN)
  Report
Delayed Quote. Delayed Nasdaq - 12/01 04:00:00 pm
19.97 USD   -3.34%
09:49aGroupon Appoints Kedar Deshpande as New CEO
DJ
09:24aGroupon Names Kedar Deshpande Chief Executive
MT
09:11aGROUPON : Appoints Kedar Deshpande as Chief Executive Officer - Form 8-K
PU
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector news

GROUPON : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

08/05/2021 | 04:10pm EST
The following discussion and analysis of our financial condition and results of
operations should be read together with our condensed consolidated financial
statements and related notes included under Part I, Item 1 of this Quarterly
Report on Form 10-Q. This discussion contains forward-looking statements about
our business and operations. Our actual results may differ materially from those
we currently anticipate as a result of many factors, including those we describe
under Part II, Item 1A, Risk Factors, and elsewhere in this Quarterly Report.
See Part I, Forward-Looking Statements, for additional information.
Overview
Groupon is a global scaled two-sided marketplace that connects consumers to
merchants. Consumers access our marketplace through our mobile applications and
our websites, primarily localized groupon.com sites in many countries. We
operate in two segments, North America and International, and operate in three
categories, Local, Goods and Travel. See Item 1, Note 13, Segment Information,
for additional information.
Currently, we generate product and service revenue from the following business
operations.
Service Revenue from Local, Travel, and Goods Categories: Service revenue
primarily represents the net commissions earned from selling goods or services
on behalf of third-party merchants. Service revenue is reported on a net basis
as the purchase price collected from the customer less the portion of the
purchase price that is payable to the third-party merchant. We also earn
commissions when customers make purchases with retailers using digital coupons
listed on our localized groupon.com sites.
Product Revenue from Goods Category: We generate product revenue from sales of
our first-party Goods merchandise inventory. For product revenue transactions,
we are the primary party responsible for providing the merchandise to the
customer, we have inventory risk and we have discretion in establishing prices.
As such, product revenue is reported on a gross basis as the purchase price
received from the customer. Product revenue, including associated shipping
revenue, is recognized when the merchandise is delivered to the customer. We
transitioned to a third-party marketplace in North America in 2020, and we began
to transition to a third-party marketplace in International in the second
quarter 2021. In a third-party marketplace model, our merchants generally assume
inventory and refund risk, therefore, following the transition, we expect our
Goods category to primarily generate revenue on a net basis within service
revenue.
Strategy
Our mission is to be the destination for experiences where consumers discover
fun things to do and local businesses thrive. Our strategic priorities are to
expand our Local inventory and modernize our marketplace by improving the
merchant and customer experiences.
To grow Local supply, we are focused on leveraging three types of inventory:
Deals with fewer restrictions, a new lower discount inventory product called
Offers, and Market Rate supply. To validate our strategic hypothesis that more
inventory would result in improved gross billings and unit performance, in
mid-2020 we launched an inventory test in four North America markets and at the
conclusion of the six-month test, we began scaling elements of our inventory
strategy more broadly throughout our marketplace in 2021. In North America, we
are scaling the removal of Deal repeat purchase restrictions to all merchants
and we are launching Offers to Beauty & Wellness merchants.
To support our strategic priority of improving the merchant and customer
experience, we are executing on initiatives to reduce friction and make it
easier for our customers to find, buy, and redeem a Groupon. In the second
quarter 2021, we started to roll out a new customer experience to North America
users, which we believe will drive engagement, conversion, and customer purchase
frequency over time. On the merchant side, we are continuing to build out tools
that will help us be a better partner to our merchants, including our
self-service tool, advertising products and booking tool features.
COVID-19, Restructuring and Cost Reduction
Since March 2020, the COVID-19 pandemic has led to a significant decrease in
consumer demand, a decrease in customer redemptions and elevated refund levels
due to changes in consumer behavior and actions taken by governments to control
the spread of COVID-19, including quarantines, travel restrictions, as well as
business restrictions and shutdowns. The COVID-19 pandemic has had an adverse
impact on our financial condition, results of operations and cash flows, which
included impairments of our goodwill and long-lived assets in 2020.
In April 2020, the Board approved a multi-phase restructuring plan related to
our previously-announced strategic shift and as part of the cost cutting
measures implemented in response to the impact of COVID-19 on our business. We
expect to incur total pretax charges of up to $105.0 million in connection with
our restructuring plan through the end of 2021. We have incurred cumulative
Restructuring and related charges of $86.5 million since the inception of the
restructuring plan in April 2020. Once fully implemented, we expect our
restructuring plan to result in $225.0 million in annualized cost savings.
During the three and six months ended June 30, 2021, we recorded $14.2 million
and $21.7 million in pretax charges in connection with our restructuring
actions. See Item 1, Note 9, Restructuring and Related Charges, for additional
information.
In March 2021, we entered into the Amended Credit Agreement to extend covenant
relief through the fourth quarter 2021. See Item 1, Note 5, Financing
Arrangements, for additional information. We plan to continue to actively manage
and optimize our cash balances and liquidity, working capital and operating
expenses, although there can be no assurances that we will be able to do so.
Recovery from the COVID-19 pandemic could be volatile and prolonged given the
unprecedented and continuously-evolving nature of the situation and the
emergence and spread of new variants such as the Delta variant. The future
impact of COVID-19 on our business, results of operations, financial condition
and liquidity is highly uncertain and will ultimately depend on future
developments, including the magnitude and duration of the pandemic, the
protective measures taken to reduce its spread, and the vaccine supply and
demand. We will continue to monitor the impact of COVID-19 on our business,
particularly in our International segment where restrictions to date have been
more prolonged and stricter than in North America.
How We Measure Our Business
We use several operating and financial metrics to assess the progress of our
business and make decisions on where to allocate capital, time and technology
investments. Certain of the financial metrics are reported in accordance with
U.S. GAAP and certain of those metrics are considered non-GAAP financial
measures. As our business evolves, we may make changes to the key financial and
operating metrics that we use to measure our business. For further information
and reconciliations to the most applicable financial measures under U.S. GAAP,
refer to our discussion under Non-GAAP Financial Measures in the Results of
Operations section.
Operating Metrics
•Gross billings is the total dollar value of customer purchases of goods and
services. Gross billings is presented net of customer refunds, order discounts
and sales and related taxes. The substantial majority of our service revenue
transactions are comprised of sales of vouchers and similar transactions in
which we collect the transaction price from the customer and remit a portion of
the transaction price to the third-party merchant who will provide the related
goods or services. For these transactions, gross billings differs from revenue
reported in our condensed consolidated statements of operations, which is
presented net of the merchant's share of the transaction price. For product
revenue transactions, gross billings is equivalent to product revenue reported
in our condensed consolidated statements of operations. Gross billings is an
indicator of our growth and business performance as it measures the dollar
volume of transactions generated through our marketplaces. Tracking gross
billings on service revenue transactions also allows us to monitor the
percentage of gross billings that we are able to retain after payments to
merchants. However, we are focused on achieving long-term gross profit and
Adjusted EBITDA growth.
•Units are the number of purchases during the reporting period, before refunds
and cancellations, made either through one of our online marketplaces, a
third-party marketplace, or directly with a merchant for
                                       28

--------------------------------------------------------------------------------

which we earn a commission. We do not include purchases with retailers using
digital coupons accessed through our websites or mobile applications in our
units metric. We consider units to be an important indicator of the total volume
of business conducted through our marketplaces. We report units on a gross basis
prior to the consideration of customer refunds and therefore units are not
always a good proxy for gross billings.
•Active customers are unique user accounts that have made a purchase during the
trailing twelve months ("TTM") either through one of our online marketplaces or
directly with a merchant for which we earned a commission. We consider this
metric to be an important indicator of our business performance as it helps us
to understand how the number of customers actively purchasing our offerings is
trending. Some customers could establish and make purchases from more than one
account, so it is possible that our active customer metric may count certain
customers more than once in a given period. We do not include consumers who
solely make purchases with retailers using digital coupons accessed through our
websites or mobile applications in our active customer metric, nor do we include
consumers who solely make purchases of our inventory through third-party
marketplaces with which we partner.
Our gross billings and units for the three and six months ended June 30, 2021
and 2020 were as follows (in thousands):
                        Three Months Ended June 30,               Six Months Ended June 30,
                            2021                  2020              2021              2020
Gross billings    $      607,589               $ 582,723      $   
1,161,561      $ 1,389,122
Units                     16,678                  23,031              34,481           52,798

Our active customers for the trailing twelve months ended June 30, 2021 and 2020 were as follows (in thousands):

                                               Trailing Twelve Months Ended 

June 30,

                                                2021                        

2020

TTM Active Customers (in thousands)           24,946                        

38,025



Financial Metrics
•Revenue is currently earned through product and service revenue transactions.
We earn service revenue from transactions in which we generate commissions by
selling goods or services on behalf of third-party merchants. Service revenue
from those transactions is reported on a net basis as the purchase price
collected from the customer for the offering less an agreed upon portion of the
purchase price paid to the third-party merchant. Service revenue also includes
commissions we earn when customers make purchases with retailers using digital
coupons accessed through our digital properties. We generate product revenue
from our sales of first-party Goods inventory. Our product revenue from these
first-party transactions, which are direct sales of merchandise inventory, is
the purchase price received from the customer. We transitioned to a third-party
marketplace in North America in 2020, and we began to transition to a
third-party marketplace in International in the second quarter 2021. Following
the International transition, we expect our Goods category to primarily generate
revenue on a net basis within service revenue.
•Gross profit reflects the net margin we earn after deducting our cost of
revenue from our revenue. Due to the lack of comparability between product
revenue, which is reported on a gross basis, and service revenue, which
primarily consists of transactions reported on a net basis, we believe that
gross profit is an important measure for evaluating our performance.
•Adjusted EBITDA is a non-GAAP financial 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 other special charges and
credits, including items that are unusual in nature or infrequently occurring.
For further information and a reconciliation to net income (loss) from
continuing operations, refer to our discussion under Non-GAAP Financial Measures
in the Results of Operations section.
                                       29

--------------------------------------------------------------------------------

•Free cash flow is a non-GAAP financial measure that comprises net cash provided
by (used in) operating activities from continuing operations less purchases of
property and equipment and capitalized software. For further information and a
reconciliation to Net cash provided by (used in) operating activities from
continuing operations, refer to our discussion in the Liquidity and Capital
Resources section.
The following table presents the above financial metrics for the three and six
months ended June 30, 2021 and 2020 (in thousands):
                        Three Months Ended June 30,                 Six Months Ended June 30,
                            2021                  2020                 2021                 2020
Revenue           $      265,958               $ 395,646      $      529,775             $ 769,796
Gross profit             193,943                 137,226             360,926               338,473
Adjusted EBITDA           40,963                   1,344              71,335               (21,126)
Free cash flow           (46,785)                 72,791            (105,230)             (174,213)


Operating Expenses
•Marketing expense consists primarily of online marketing costs, such as search
engine marketing, advertising on social networking sites and affiliate programs,
and offline marketing costs, such as television and radio advertising.
Additionally, compensation expense for marketing employees is classified within
marketing expense. We record these costs within Marketing on the condensed
consolidated statements of operations when incurred. From time to time, we have
offerings from well-known national merchants for customer acquisition and
activation purposes, for which the amount we owe the merchant for each voucher
sold exceeds the transaction price paid by the customer. Our gross billings from
those transactions generate no service revenue and our net cost (i.e., the
excess of the amount owed to the merchant over the amount paid by the customer)
is classified as marketing expense. We evaluate marketing expense as a
percentage of gross profit because it gives us an indication of how well our
marketing spend is driving gross profit performance.
•Selling, general and administrative ("SG&A") expenses include selling expenses
such as sales commissions and other compensation expenses for sales
representatives, as well as costs associated with supporting the sales function
such as technology, telecommunications and travel. General and administrative
expenses include compensation expense for employees involved in customer
service, operations, technology and product development, as well as general
corporate functions, such as finance, legal and human resources. Additional
costs in general and administrative include depreciation and amortization, rent,
professional fees, litigation costs, travel and entertainment, recruiting,
office supplies, maintenance, certain technology costs and other general
corporate costs. We evaluate SG&A expense as a percentage of gross profit
because it gives us an indication of our operating efficiency.
•Restructuring and related charges represent severance and benefit costs for
workforce reductions, impairments and other facilities-related costs and
professional advisory fees. See Item 1, Note 9, Restructuring and Related
Charges, for additional information about our restructuring plan.
Factors Affecting Our Performance
Impact of COVID-19. During the COVID-19 pandemic, actions taken by governments
to control the spread of COVID-19, and changes in consumer behavior have had a
negative impact on our business, which relies on customers' purchases of local
experiences, including events and activities, beauty and wellness, travel and
dining. Recovery from the COVID-19 pandemic could be volatile and prolonged
given the unprecedented and continuously-evolving nature of the situation and
the emergence and spread of variants. We will continue to monitor the impact of
COVID-19 on our business, particularly in our International segment where
restrictions to date have been more prolonged and stricter than in North
America.
Attracting and retaining local merchants. As we focus on our local experiences
marketplace, we depend on our ability to attract and retain merchants who are
willing to offer their experiences on our platform. Merchants can generally
withdraw their offerings from our marketplace at any time, and their willingness
to continue offering services through our marketplace depends on the
effectiveness of our marketing and promotional services. Since
                                       30

--------------------------------------------------------------------------------

the widespread economic impacts of COVID-19 began, we continue to prioritize
opportunities to help drive demand for our merchants and highlighting offers
that customers can enjoy right now. As we continue to navigate through the
volatility of the COVID-19 recovery period, we intend to take a market-by-market
approach to attracting and retaining local merchants.
Driving purchase frequency and re-engaging and retaining customers. As the
global economy continues to recover from the pandemic, we are highlighting
inventory that customers can enjoy right now in order to drive purchase
frequency and retain customers. This includes surfacing the relevant inventory
in each market depending on the government restrictions currently in place. We
also continue to focus on expanding inventory through our three inventory
products - Deals with fewer restrictions, Offers, and Market Rate. On the
customer experience side, we continue to improve our websites and mobile
applications; launch innovative products that remove friction from the customer
journey and drive awareness to our supply; and grow our high-quality, bookable
inventory.
                                       31

--------------------------------------------------------------------------------

Results of Operations
North America
Operating Metrics
North America segment gross billings and units for the three and six months
ended June 30, 2021 and 2020 were as follows (dollars in thousands):
                                                Three Months Ended June 30,                                         Six Months Ended June 30,
                                       2021                  2020              % Change                   2021                    2020              % Change
Gross billings
Service gross billings:
Local                            $      337,192          $ 167,455                 101.4  %       $     618,488               $ 560,064                  10.4  %
Goods                                    56,643             30,295                  87.0                125,785                  48,414                 159.8
Travel                                   39,232             11,524                 240.4                 70,692                  45,184                  56.5
Total service gross billings            433,067            209,274                 106.9                814,965                 653,662                 

24.7

Product gross billings - Goods                -            143,239                (100.0)                   626                 225,514                 (99.7)
Total gross billings             $      433,067          $ 352,513                  22.9          $     815,591               $ 879,176                  (7.2)

Units
Local                                     8,873              5,871                  51.1  %              17,139                  20,003                 (14.3) %
Goods                                     2,330              6,996                 (66.7)                 5,411                  10,738                 (49.6)
Travel                                      191                 78                 144.9                    384                     391                  (1.8)
Total units                              11,394             12,945                 (12.0)                22,934                  31,132                 (26.3)

North America TTM active customers for the trailing twelve months ended June 30, 2021 and 2020 were as follows (in thousands):

                                         Trailing Twelve Months Ended June 30,
                                            2021                        2020        % Change
TTM Active customers                                     15,202        22,758        (33.2) %


Comparison of the Three Months Ended June 30, 2021 and 2020:
North America gross billings increased by $80.6 million for the three months
ended June 30, 2021. Units and TTM active customers declined by 1.6 million and
7.6 million for the three months ended June 30, 2021 compared with the prior
year period. The increase in gross billings is primarily due to an increase in
consumer demand and a shift in mix to higher-priced offerings in the Local and
Travel categories in light of COVID-19 impacts on supply. This was partially
offset by a decrease in consumer demand for our Goods category.
Comparison of the Six Months Ended June 30, 2021 and 2020:
North America gross billings and units declined by $63.6 million and 8.2 million
for the six months ended June 30, 2021 compared with the prior year period.
These declines were primarily due to decrease in consumer demand for our Goods
category, partially offset by an increase in demand of higher-priced Local
offerings.
                                       32

--------------------------------------------------------------------------------

Financial Metrics
North America segment revenue, cost of revenue and gross profit for the three
and six months ended June 30, 2021 and 2020 were as follows (dollars in
thousands):
                                                  Three Months Ended June 30,                                          Six Months Ended June 30,
                                      2021                       2020               % Change                 2021                 2020               % Change
Revenue
Service revenue
Local                           $     139,853                $  81,724                   71.1  %       $    265,227           $ 224,384                   18.2  %
Goods                                  12,792                    5,869                  118.0                28,077               9,614                  192.0
Travel                                  8,143                    2,525                  222.5                14,102               8,974                   57.1
Total service revenue                 160,788                   90,118                   78.4               307,406             242,972                   26.5
Product revenue - Goods                     -                  143,239                 (100.0)                  626             225,514                  (99.7)
Total revenue                   $     160,788                $ 233,357                  (31.1)         $    308,032           $ 468,486                  (34.2)

Cost of revenue
Service cost of revenue
Local                           $      15,032                $  10,086                   49.0  %       $     27,980           $  28,887                   (3.1) %
Goods                                   2,023                    1,466                   38.0                 4,252               2,203                   93.0
Travel                                  1,531                      635                  141.1                 2,772               3,122                  (11.2)
Total service cost of revenue          18,586                   12,187                   52.5                35,004              34,212                 

2.3

Product cost of revenue - Goods             -                  119,478                 (100.0)                  458             188,811                  (99.8)
Total cost of revenue           $      18,586                $ 131,665                  (85.9)         $     35,462           $ 223,023                  (84.1)

Gross profit
Service gross profit
Local                           $     124,821                $  71,638                   74.2  %       $    237,247           $ 195,497                   21.4  %
Goods                                  10,769                    4,403                  144.6                23,825               7,411                  221.5
Travel                                  6,612                    1,890                  249.8                11,330               5,852                   93.6
Total service gross profit            142,202                   77,931                   82.5               272,402             208,760                   30.5
Product gross profit - Goods                -                   23,761                 (100.0)                  168              36,703                  (99.5)
Total gross profit              $     142,202                $ 101,692                   39.8          $    272,570           $ 245,463                   11.0

Service margin (1)                       37.1   %                 43.1  %                                      37.7   %            37.2  %

% of Consolidated revenue                60.5   %                 59.0  %                                      58.1   %            60.9  %
% of Consolidated cost of
revenue                                  25.8                     51.0                                         21.0                51.7
% of Consolidated gross profit           73.3                     74.1                                         75.5                72.5


(1)   Represents the percentage of service gross billings that we retained after
deducting the merchant's share from revenue.
Comparison of the Three Months Ended June 30, 2021 and 2020:
North America revenue and cost of revenue decreased by $72.6 million and $113.1
million for the three months ended June 30, 2021 compared with the prior year
period, primarily due to lower Goods gross billings and the transition of Goods
to a third-party marketplace model. In a third-party marketplace model, we
generate service revenue which is presented on a net basis. The Goods revenue
decline was partially offset by higher Local gross billings and revenue.
North America gross profit increased by $40.5 million for the three months ended
June 30, 2021 compared with the prior year period driven by an increase in Local
gross billings, partially offset by a decrease in service margin due to mix of
offerings sold and a decrease in Goods gross billings.
Comparison of the Six Months Ended June 30, 2021 and 2020:
North America revenue and cost of revenue decreased by $160.5 million and $187.6
million for the six months ended June 30, 2021 compared with the prior year
period, primarily due to lower Goods gross billings and
                                       33

--------------------------------------------------------------------------------

the transition of Goods to a third-party marketplace model. In a third-party
marketplace model, we generate service revenue which is presented on a net
basis. The Goods revenue decline was partially offset by higher Local gross
billings and revenue.
North America gross profit increased by $27.1 million for the six months ended
June 30, 2021 compared with the prior year period primarily due to higher Local
gross billings, partially offset by lower Goods gross billings.
                                       34

--------------------------------------------------------------------------------

Marketing and Contribution Profit
We define contribution profit as gross profit less marketing expense. North
America contribution profit for the three and six months ended June 30, 2021 and
2020 were as follows (dollars in thousands):
                                                 Three Months Ended June 30,                                       Six Months Ended June 30,
                                        2021                 2020               % Change                 2021                 2020               % Change
Marketing                         $      33,177           $ 14,076                  135.7  %       $     55,945           $  53,485                    4.6  %
% of Gross profit:                         23.3   %           13.8  %                                      20.5   %            21.8  %

Contribution profit               $     109,025           $ 87,616                   24.4  %       $    216,625           $ 191,978                   12.8  %


Comparison of the Three Months Ended June 30, 2021 and 2020:
North America marketing expense and marketing expense as a percentage of gross
profit increased for the three months ended June 30, 2021 due to the launch of
new brand campaigns in the second quarter 2021 and an increase in consumer
demand as restrictions lifted and Local merchants re-opened.
The increase in our North America contribution profit for the three months ended
June 30, 2021 compared with the prior year period was primarily attributable to
an increase in gross profit, partially offset by an increase in marketing.
Comparison of the Six Months Ended June 30, 2021 and 2020:
North America marketing expense increased for the six months ended June 30, 2021
compared with the prior year period. Marketing expense in the first quarter 2021
decreased compared with the first quarter 2020 due to accelerated traffic
declines, significantly shortened payback thresholds and lower investment in our
offline marketing and brand spend in light of COVID-19. Marketing expense in the
second quarter 2021 increased compared with the second quarter 2020 due to the
drivers discussed above.
The increase in our North America contribution profit for the six months ended
June 30, 2021 compared with the prior year period was primarily due to an
increase in gross profit.
International
Operating Metrics
International segment gross billings and units for the three and six months
ended June 30, 2021 and 2020 were as follows (in thousands):
                                                   Three Months Ended June 30,                                         Six Months Ended June 30,
                                          2021                  2020              % Change                   2021                    2020              % Change
Gross billings
Service gross billings:
Local                               $       89,877          $  61,897                  45.2  %       $     159,551               $ 219,298                 (27.2) %
Goods                                        8,453             19,514                 (56.7)                16,201                  30,171                 (46.3)
Travel                                      16,395              8,769                  87.0                 19,854                  35,600                 (44.2)
Total service gross billings               114,725             90,180                  27.2                195,606                 285,069              

(31.4)

Product gross billings - Goods              59,797            140,030                 (57.3)               150,364                 224,877                 (33.1)
Total gross billings                $      174,522          $ 230,210                 (24.2)         $     345,970               $ 509,946                 (32.2)

Units
Local                                        2,583              2,202                  17.3  %               4,674                   9,046                 (48.3) %
Goods                                        2,598              7,820                 (66.8)                 6,719                  12,307                 (45.4)
Travel                                         103                 64                  60.9                    154                     313                 (50.8)
Total units                                  5,284             10,086                 (47.6)                11,547                  21,666                 (46.7)


                                       35
--------------------------------------------------------------------------------

International TTM active customers for the trailing twelve months ended June 30, 2021 and 2020 were as follows (in thousands):

                                      Trailing Twelve Months Ended June 30,
                                         2021                        2020        % Change
TTM Active customers                                   9,744        15,267        (36.2) %


Comparison of the Three Months Ended June 30, 2021 and 2020:
International gross billings, units and TTM active customers decreased by $55.7
million, 4.8 million and 5.5 million for the three months ended June 30, 2021
compared with the prior year period. These declines were primarily due to a
decrease in consumer demand in the Goods category, partially offset by an
increase in consumer demand for Local, a shift in mix to higher-priced offerings
in Local, and a $16.4 million favorable impact from year-over-year changes in
foreign currency exchange rates.
Comparison of the Six Months Ended June 30, 2021 and 2020:
International gross billings and units decreased by $164.0 million and 10.1
million for the six months ended June 30, 2021 compared with the prior year
period. These declines were primarily due to a decrease in consumer demand in
the Goods category and a decrease in consumer demand in the Local category due
to changes in consumer behavior and actions taken by governments to control the
spread of COVID-19, partially offset by a $31.4 million favorable impact from
year-over-year changes in foreign currency exchange rates.
                                       36

--------------------------------------------------------------------------------

Financial Metrics
International segment revenue, cost of revenue and gross profit for the three
and six months ended June 30, 2021 and 2020 were as follows (dollars in
thousands):
                                                    Three Months Ended June 30,                                          Six Months Ended June 30,
                                        2021                       2020               % Change                 2021                 2020               % Change
Revenue
Service revenue:
Local                             $      40,329                $  18,025                  123.7  %       $     63,518           $  66,693                   (4.8) %
Goods                                     1,580                    3,279                  (51.8)                3,550               5,512                  (35.6)
Travel                                    3,464                      955                  262.7                 4,311               4,228                    2.0
Total service revenue                    45,373                   22,259                  103.8                71,379              76,433                   (6.6)
Product revenue - Goods                  59,797                  140,030                  (57.3)              150,364             224,877                  (33.1)
Total revenue                     $     105,170                $ 162,289                  (35.2)         $    221,743           $ 301,310                  (26.4)

Cost of revenue
Service cost of revenue:
Local                             $       2,137                $   3,182                  (32.8) %       $      3,899           $   7,326                  (46.8) %
Goods                                       134                      722                  (81.4)                  245                 939                  (73.9)
Travel                                      310                      151                  105.3                   444                 680                  (34.7)
Total service cost of revenue             2,581                    4,055                  (36.4)                4,588               8,945               

(48.7)

Product cost of revenue - Goods          50,848                  122,700                  (58.6)              128,799             199,355                  (35.4)
Total cost of revenue             $      53,429                $ 126,755                  (57.8)         $    133,387           $ 208,300                  (36.0)

Gross profit
Service gross profit:
Local                             $      38,192                $  14,843                  157.3  %       $     59,619           $  59,367                    0.4  %
Goods                                     1,446                    2,557                  (43.4)                3,305               4,573                  (27.7)
Travel                                    3,154                      804                  292.3                 3,867               3,548                    9.0
Total service gross profit               42,792                   18,204                  135.1                66,791              67,488                   (1.0)
Product gross profit - Goods              8,949                   17,330                  (48.4)               21,565              25,522                  (15.5)
Total gross profit                $      51,741                $  35,534                   45.6          $     88,356           $  93,010                   (5.0)

Service margin (1)                         39.5   %                 24.7  %                                      36.5   %            26.8  %

% of Consolidated revenue                  39.5   %                 41.0  %                                      41.9   %            39.1  %
% of Consolidated cost of revenue          74.2                     49.0                                         79.0                48.3
% of Consolidated gross profit             26.7                     25.9                                         24.5                27.5


(1)   Represents the percentage of service gross billings that we retained after
deducting the merchant's share from revenue.
Comparison of the Three Months Ended June 30, 2021 and 2020
International revenue and cost of revenue decreased by $57.1 million and $73.3
million for the three months ended June 30, 2021 compared with the prior year
period primarily driven by a decline in Goods gross billings, partially offset
by a favorable impact of $9.7 million on revenue and an unfavorable impact of
$4.7 million on cost of revenue from year-over-year changes in foreign currency
exchange rates.
International gross profit increased by $16.2 million for the three months ended
June 30, 2021 compared with the prior year period primarily driven by higher
service margins due to increases in variable consideration for unredeemed
vouchers, higher Local gross billings, and favorable impacts of $4.9 million
from year-over-year changes in foreign currency exchange rates. This was
partially offset by declines in Goods gross billings.
Comparison of the Six Months Ended June 30, 2021 and 2020
International revenue and cost of revenue decreased by $79.6 million and $74.9
million for the six months ended June 30, 2021 compared with the prior year
period primarily driven by a decline in Goods gross billings,
                                       37

--------------------------------------------------------------------------------

partially offset by a favorable impact of $19.7 million on revenue and an
unfavorable impact of $11.6 million on cost of revenue from year-over-year
changes in foreign currency exchange rates.
International gross profit decreased $4.7 million for the six months ended June
30, 2021 compared with the prior year period primarily due to declines in Local
gross billings due to COVID-19 impacts and declines in Goods gross billings.
This was partially offset by higher service margin largely due to increases in
variable consideration from unredeemed vouchers and favorable impacts of $8.1
million from year-over-year changes in foreign currency exchange rates.
Marketing and Contribution Profit
International marketing and contribution profit for the three and six months
ended June 30, 2021 and 2020 were as follows (dollars in thousands):
                                                 Three Months Ended June 30,                                        Six Months Ended June 30,
                                        2021                2020               % Change                 2021                     2020               % Change
Marketing                         $     10,543           $ 11,166                   (5.6) %       $     21,441                $ 31,887                  (32.8) %
% of Gross profit:                        20.4   %           31.4  %                                      24.3   %                34.3  %

Contribution profit               $     41,198           $ 24,368                   69.1  %       $     66,915                $ 61,123                    9.5  %


Comparison of the Three Months Ended June 30, 2021 and 2020:
International marketing expense declined for the three months ended June 30,
2021 compared with the prior year period primarily due to lower marketing
payroll expense due to restructuring actions. Marketing expense as a percentage
of gross profit declined for the three months ended June 30, 2021 due to
increased consumer demand in Local, an increase in variable consideration from
unredeemed vouchers which benefited gross profit, and lower marketing payroll
expense.
The increase in International contribution profit for the three months ended
June 30, 2021 compared with the prior year period was primarily attributable to
a $16.2 million increase in gross profit.
Comparison of the Six Months Ended June 30, 2021 and 2020:
International marketing expense and marketing expense as a percentage of gross
profit declined for the six months ended June 30, 2021. Marketing expense in the
first quarter 2021 decreased compared with the first quarter 2020 due to
accelerated traffic declines, significantly shortened payback thresholds and
lower investment in our offline marketing and brand spend in light of COVID-19.
Marketing expense in the second quarter 2021 decreased compared with the second
quarter 2020 due to the drivers discussed above.
The increase in International contribution profit for the six months ended June
30, 2021 compared with the prior year period was primarily due to a $10.4
million decrease in marketing expense, partially offset by a $4.7 million
decrease in gross profit.
                                       38

--------------------------------------------------------------------------------

Operating Expenses
Operating expenses for the three and six months ended June 30, 2021 and 2020
were as follows (dollars in thousands):
                                                   Three Months Ended June 30,                                         Six Months Ended June 30,
                                       2021                       2020              % Change                 2021                 2020              % Change
Marketing                        $      43,720                $  25,242                  73.2  %       $     77,386           $  85,372                  (9.4) %
Selling, general and
administrative                         137,969                  143,619                  (3.9)              265,112             350,760                 (24.4)
Goodwill impairment                          -                        -                     -                     -             109,486                (100.0)
Long-lived asset impairment                  -                        -                     -                     -              22,351                (100.0)
Restructuring and related
charges                                 14,245                   40,478                 (64.8)               21,667              40,478                 (46.5)
Total operating expenses         $     195,934                $ 209,339                  (6.4)         $    364,165           $ 608,447                 (40.1)

% of Gross profit:
Marketing                                 22.5   %                 18.4  %                                     21.4   %            25.2  %
Selling, general and
administrative                            71.1   %                104.7  %                                     73.5   %           103.6  %


Comparison of the Three Months Ended June 30, 2021 and 2020:
Marketing expense and marketing expense as a percentage of gross profit
increased for the three months ended June 30, 2021 compared with the prior year
period due to the launch of new brand campaigns in the second quarter 2021 and
an increase in consumer demand as restrictions lifted and Local merchants
re-opened.
SG&A and SG&A as a percentage of gross profit decreased for the three months
ended June 30, 2021 compared with the prior year period primarily due to lower
consulting expenses and a decline in fixed costs as a result of our
restructuring actions, partially offset by a $4.5 million unfavorable impact
from year-over-year changes in foreign currency exchange rates.
Restructuring and related charges decreased for the three months ended June 30,
2021 compared with the prior year period primarily due to lower severance and
benefit costs for workforce reductions, impairments of long-lived assets and
lease terminations and other exit costs resulting from our restructuring
activities. See Item 1, Note 9, Restructuring and Related Charges, for
additional information.
Comparison of the Six Months Ended June 30, 2021 and 2020:
Marketing expense and marketing expense as a percentage of gross profit declined
for the six months ended June 30, 2021 compared with the prior year. Marketing
expense in the first quarter 2021 decreased compared with the first quarter 2020
due to accelerated traffic declines, significantly shortened payback thresholds
and lower investment in our offline marketing and brand spend in light of
COVID-19. Marketing expense in the second quarter 2021 increased compared with
the second quarter 2020 due to the drivers discussed above.
SG&A and SG&A as a percentage of gross profit decreased for the six months ended
June 30, 2021 compared with the prior year period primarily due to lower
consulting expenses and a decline in fixed costs due to restructuring actions,
partially offset by a $9.0 million unfavorable impact from year-over-year
changes in foreign currency exchange rates.
During the first quarter 2020, we performed an interim quantitative assessment
of goodwill and long-lived assets as a result of significant deterioration in
our financial performance due to the impact of COVID-19. As a result, we
recognized goodwill impairment of $109.5 million, that represented the excess of
the EMEA reporting unit's carrying value over its fair value, and long-lived
asset impairment of $22.4 million for the six months ended June 30, 2020. See
Item 1, Note 2, Goodwill and Long-Lived Assets, for additional information.
Restructuring and related charges decreased for the six months ended June 30,
2021 compared with the prior year period primarily due to lower severance and
benefit costs for workforce reductions, impairments of long-lived assets and
lease terminations and other exit costs resulting from our restructuring
activities. See Item 1, Note 9, Restructuring and Related Charges, for
additional information.
                                       39

--------------------------------------------------------------------------------

Other Income (Expense), Net
Other income (expense), net includes interest income, interest expense, gains
and losses on fair value option investments, impairments of investments, loss on
extinguishment of debt and foreign currency gains and losses, primarily
resulting from intercompany balances with our subsidiaries that are denominated
in foreign currencies.
Other income (expense), net for the three and six months ended June 30, 2021 and
2020 were as follows (dollars in thousands):
                                             Three Months Ended June 30,                 Six Months Ended June 30,
                                              2021                  2020                  2021                 2020
Interest income                         $        1,327          $    1,430          $       2,482          $    3,986
Interest expense                                (5,473)             (8,009)               (10,589)            (14,967)
Impairment and other changes in fair
value of investments                             4,245                   -                  4,245              (8,089)
Loss on extinguishment of debt                  (5,090)                  -                 (5,090)                  -
Foreign currency gains (losses), net
and other                                        2,064               4,884                 24,148              (1,612)
Other income (expense), net             $       (2,927)         $   (1,695)         $      15,196          $  (20,682)


Comparison of the Three Months Ended June 30, 2021 and 2020:
The change in Other income (expense), net for the three months ended June 30,
2021 as compared with the prior year period is primarily related to a loss on
extinguishment of debt of $5.1 million, partially offset by the recognition of a
$4.2 million gain from the divestment of our shares in an other equity
investment in the second quarter 2021.
Comparison of the Six Months Ended June 30, 2021 and 2020:
The change in Other income (expense), net for the six months ended June 30, 2021
as compared with the prior year period is primarily related to a change in
foreign currency gains and losses of $25.8 million due to a $32.3 million
cumulative foreign currency translation adjustment gain that was reclassified
into earnings for the six months ended June 30, 2021 as a result of the
substantial liquidation of our subsidiary in Japan as part of our restructuring
actions.
Provision (Benefit) for Income Taxes
Provision (benefit) for income taxes for the three and six months ended June 30,
2021 and 2020 were as follows (dollars in thousands):
                                              Three Months Ended June 30,                                    Six Months Ended June 30,
                                      2021                 2020             % Change               2021               2020              % Change
Provision (benefit) for income
taxes                          $       (1,789)          $  (696)                157.0  %       $     638           $ (6,684)               (109.5) %
Effective tax rate                       36.4   %           0.9  %                                   5.3   %            2.3  %


Comparison of the Three Months Ended June 30, 2021 and 2020:
The effective tax rate for the three months ended June 30, 2021 was impacted by
the benefit of non-taxable items and the U.S. research and development tax
credit. The three months ended June 30, 2021 and 2020 were also impacted by the
pretax losses incurred in jurisdictions that have valuation allowances against
their net deferred tax assets. We expect that our consolidated effective tax
rate in future periods will continue to differ significantly from the U.S.
federal income tax rate as a result of our tax obligations in jurisdictions with
profits and valuation allowances in jurisdictions with losses. See Item 1, Note
10, Income Taxes, for additional information relating to tax audits and
assessments and regulatory and legal developments that may impact our business
and results of operations in the future.
                                       40

--------------------------------------------------------------------------------

Comparison of the Six Months Ended June 30, 2021 and 2020:
The effective tax rate for the six months ended June 30, 2021 was impacted by
the benefit of non-taxable items and the U.S. research and development tax
credit. The six months ended June 30, 2021 and 2020 were also impacted by the
pretax losses incurred in jurisdictions that have valuation allowances against
their net deferred tax assets. The six months ended June 30, 2020 was impacted
by the reversals of reserves for uncertain tax positions due to the closure of
tax audits and by the carryback of federal net operating losses due to the
income tax relief provided by the CARES Act. We expect that our consolidated
effective tax rate in future periods will continue to differ significantly from
the U.S. federal income tax rate as a result of our tax obligations in
jurisdictions with profits and valuation allowances in jurisdictions with
losses. See Item 1, Note 10, Income Taxes, for additional information relating
to tax audits and assessments and regulatory and legal developments that may
impact our business and results of operations in the future.
As of June 30, 2021 and December 31, 2020, we had a valuation allowance recorded
against our U.S. deferred tax assets. Given our U.S. current earnings and
projected future earnings, we believe that there is a reasonable possibility
that within the next six months, sufficient positive evidence may be available
to support the conclusion that a valuation allowance will no longer be required.
Release of the valuation allowance would result in a decrease to income tax
expense in the period the release is recorded. However, the timing and amount of
the valuation allowance release could vary based on the level of profitability
that we are able to achieve.
                                       41

--------------------------------------------------------------------------------

Non-GAAP Financial Measures
In addition to financial results reported in accordance with U.S. GAAP, we have
provided the following non-GAAP financial measures: Adjusted EBITDA, free cash
flow and foreign currency exchange rate neutral operating results. Those
non-GAAP financial measures, which are presented on a continuing operations
basis, are intended to aid investors in better understanding our current
financial performance and prospects for the future as seen through the eyes of
management. We believe that those 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, those non-GAAP financial measures are not
intended to be a substitute for those reported in accordance with U.S. GAAP.
Adjusted EBITDA. Adjusted EBITDA is a non-GAAP performance measure that we
define as 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 other
special charges and credits, including 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 for the allocation of capital.
Accordingly, we believe that Adjusted EBITDA provides useful information to
investors and others in understanding and evaluating our operating results in
the same manner as our management and Board of Directors. However, Adjusted
EBITDA is not intended to be a substitute for Income (loss) from continuing
operations.
We exclude stock-based compensation expense and depreciation and amortization
because they are primarily non-cash in nature and we believe that non-GAAP
financial measures excluding those items provide meaningful supplemental
information about our operating performance and liquidity. 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. For the three and six months ended June 30, 2021, special
charges and credits included charges related to our restructuring plan. For the
three and six months ended June 30, 2020, special charges and credits included
charges related to our restructuring plan, goodwill and long-lived asset
impairments and strategic advisor costs. We exclude special charges and credits
from Adjusted EBITDA because we believe that excluding those items provides
meaningful supplemental information about our core operating performance and
facilitates comparisons with our historical results.
                                       42

--------------------------------------------------------------------------------

The following is a reconciliation of Adjusted EBITDA to the most comparable U.S.
GAAP financial measure, Income (loss) from continuing operations, for the three
and six months ended June 30, 2021 and 2020 (in thousands):
                                                   Three Months Ended June 30,                 Six Months Ended June 30,
                                                    2021                  2020                 2021                 2020

Income (loss) from continuing operations $ (3,129) $ (73,112) $ 11,319 $ (283,972) Adjustments: Stock-based compensation

                               9,738               8,543                16,917              22,558
Depreciation and amortization                         18,971              24,434                35,990              50,343
Acquisition-related expense (benefit), net                 -                   2                     -                   6
Restructuring and related charges (1)                 14,245              40,478                21,667              40,478
Goodwill impairment                                        -                   -                     -             109,486
Long-lived asset impairment                                -                   -                     -              22,351
Strategic advisor costs                                    -                   -                     -               3,626
Other (income) expense, net (2)                        2,927               1,695               (15,196)             20,682
Provision (benefit) for income taxes                  (1,789)               (696)                  638              (6,684)
Total adjustments                                     44,092              74,456                60,016             262,846
Adjusted EBITDA                               $       40,963          $    

1,344 $ 71,335 $ (21,126)



(1)Includes $13.9 million of long-lived asset impairments and $1.4 million of
additional stock-based compensation for both the three and six months ended June
30, 2020.
(2)Includes a $32.3 million cumulative foreign currency translation adjustment
gain that was reclassified into earnings for the six months ended June 30, 2021
as a result of the substantial liquidation of our subsidiary in Japan as part of
our restructuring actions. Refer to Item 1, Note 9, Restructuring and Related
Charges, for additional information.
Free cash flow. Free cash flow is a non-GAAP liquidity measure that comprises
net cash provided by operating activities from continuing operations less
purchases of property and equipment and capitalized software. We use free cash
flow to conduct and evaluate our business because, although it is similar to
cash flow from continuing 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 our cash balance for the applicable
period.
Free cash flow has limitations due to the fact that it does not represent the
residual cash flow available for discretionary expenditures. In addition, free
cash flow reflects the impact of the timing difference between when we are paid
by customers and when we pay merchants and suppliers. Therefore, we believe it
is important to view free cash flow as a complement to our condensed
consolidated statements of cash flows. For a reconciliation of free cash flow to
the most comparable U.S. GAAP financial measure, see Liquidity and Capital
Resources below.
Foreign currency exchange rate neutral operating results. Foreign currency
exchange rate neutral operating results show current period operating results as
if foreign currency exchange rates had remained the same as those in effect in
the prior year period. Those measures are intended to facilitate comparisons to
our historical performance.
                                       43

--------------------------------------------------------------------------------

The following tables represent the effect on our condensed consolidated statements of operations from changes in exchange rates versus the U.S. dollar for the three and six months ended June 30, 2021 (in thousands):

                                                            Three Months Ended June 30, 2021
                                           At Avg. Q2 2020             Exchange Rate
                                              Rates (1)                 Effect (2)               As Reported
Gross billings                           $         591,182          $         16,407          $       607,589
Revenue                                            256,274                     9,684                  265,958
Cost of revenue                                     67,275                     4,740                   72,015
Gross profit                                       188,999                     4,944                  193,943
Marketing                                           42,801                       919                   43,720
Selling, general and administrative                133,488                     4,481                  137,969
Restructuring and related charges                   13,278                       967                   14,245
Income (loss) from operations                         (568)                   (1,423)                  (1,991)


                                                            Six Months Ended June 30, 2021
                                           At Avg. Q2 2020            Exchange Rate
                                              Rates (1)                Effect (2)               As Reported
Gross billings                           $      1,130,064          $         31,497          $    1,161,561
Revenue                                           510,072                    19,703                 529,775
Cost of revenue                                   157,269                    11,580                 168,849
Gross profit                                      352,803                     8,123                 360,926
Marketing                                          75,591                     1,795                  77,386
Selling, general and administrative               256,080                     9,032                 265,112
Restructuring and related charges                  20,356                     1,311                  21,667
Income (loss) from operations                         776                    (4,015)                 (3,239)


(1)   Represents the financial statement balances that would have resulted had
exchange rates in the reporting period been the same as those in effect in the
prior year period.
(2)   Represents the increase or decrease in the reported amount resulting from
changes in exchange rates from those in effect in the prior year period.
Liquidity and Capital Resources
Our principal sources of liquidity are cash flows from operations and cash
balances, which primarily consist of bank deposits and government money market
funds. As of June 30, 2021, cash and cash equivalents, including outstanding
borrowings under the Amended Credit Agreement, were $565.0 million.
                                       44

--------------------------------------------------------------------------------

Our net cash flows from operating, investing and financing activities from continuing operations for the three and six months ended June 30, 2021 and 2020 were as follows (in thousands):

                                                   Three Months Ended June 30,                    Six Months Ended June 30,
                                                     2021                  2020                   2021                    2020
Cash provided by (used in):
Operating activities                          $       (34,365)         $  87,112          $     (80,770)              $ (149,296)
Investing activities                                   (9,223)           (15,568)               (21,967)                   3,996
Financing activities                                 (241,039)            42,862               (178,421)                 184,174


Our free cash flow for the three and six months ended June 30, 2021 and 2020 and
a reconciliation to the most comparable U.S. GAAP financial measure, Net cash
provided by (used in) operating activities from continuing operations, for those
periods were as follows (in thousands):
                                               Three Months Ended June 30,                    Six Months Ended June 30,
                                                 2021                  2020                   2021                    2020

Net cash provided by (used in) operating activities from continuing operations $ (34,365) $ 87,112 $ (80,770)

             $ (149,296)
Purchases of property and equipment and
capitalized software                              (12,420)           (14,321)                (24,460)                (24,917)
Free cash flow                            $       (46,785)         $  72,791          $     (105,230)             $ (174,213)


Our revenue-generating transactions are primarily structured such that we
collect cash up-front from customers and pay third-party merchants at a later
date, either based upon the customer's redemption of the related voucher or
fixed payment terms, which are generally biweekly throughout the term of the
merchant's offering. Historically, we have primarily paid merchants on fixed
payment terms in North America and upon voucher redemption internationally. In
the third quarter 2020, we largely completed a transition to redemption payment
terms in North America.
Our cash balances fluctuate significantly throughout the year based on many
variables, including gross billings growth rates, the timing of payments to
merchants and suppliers, seasonality and the mix of transactions between Goods
and Local.
For the six months ended June 30, 2021, our net cash used in operating
activities from continuing operations was $80.8 million, as compared with $11.3
million net income from continuing operations. That difference is primarily due
to a $113.6 million net decrease from changes in working capital and other
non-current assets and liabilities. The working capital impact was related to
seasonal timing of payments to inventory suppliers and the impact of COVID-19.
The difference between our net cash used in operating activities and our net
income from continuing operations is also due to $21.5 million of non-cash
items, including a $32.3 million foreign currency translation adjustment gain
that was reclassified into earnings during the six months ended June 30, 2021 as
a result of the substantial liquidation of our subsidiary in Japan, depreciation
and amortization and stock-based compensation.
For the six months ended June 30, 2020, our net cash used in operating
activities from continuing operations was $149.3 million, as compared with a
$284.0 million net loss from continuing operations. That difference is primarily
due to a $99.2 million net decrease from changes in working capital and other
assets and liabilities. The working capital impact was related to the seasonal
timing of payments to inventory suppliers and the impact of COVID-19. The
difference between our net cash used in operating activities and our net loss
from continuing operations was partially offset by $233.9 million of non-cash
items, including $109.5 million of goodwill impairment, $22.4 million of
long-lived asset impairments, $13.9 million of restructuring-related
impairments, depreciation and amortization and stock-based compensation.
For the six months ended June 30, 2021, our net cash used in investing
activities from continuing operations was $22.0 million, which included
purchases of property and equipment and capitalized software of $24.5 million.
For the six months ended June 30, 2020, our net cash provided by investing
activities from continuing operations was $4.0 million. Our net cash provided by
investing activities from continuing operations included the
                                       45

--------------------------------------------------------------------------------

proceeds from the sale of an investment of $31.6 million, which was partially
offset by purchases of property and equipment and capitalized software of $24.9
million.
For the six months ended June 30, 2021, our net cash used in financing
activities was $178.4 million. Our net cash used in financing activities
included payments of $254.0 million for the repurchase of the Atairos Notes,
$100.0 million in payments under our revolving credit agreement, $27.4 million
related to the purchase of capped call transactions, $16.1 million in taxes paid
related to net share settlements of stock-based compensation awards and $7.9
million in cash paid for issuance costs for the 2026 convertible notes, as
discussed below, and the revolving credit agreement, partially offset by $230.0
million of proceeds received from the issuance of the 2026 convertible notes.
For the six months ended June 30, 2020, our net cash provided by financing
activities was $184.2 million. Our net cash provided by financing activities
included $200.0 million of borrowings under our revolving credit agreement,
partially offset by $7.3 million in taxes paid related to net share settlements
of stock-based compensation awards and $5.3 million in payments of finance lease
obligations.
In July 2020, we entered into the First Amendment of our Amended Credit
Agreement in order to, among other things, provide us operational flexibility
and covenant relief in light of the ongoing impacts of COVID-19 on our business.
In March 2021, we entered into the Second Amendment to, among other things,
extend the covenant relief through the fourth quarter 2021. In March and April
2021, we also issued the 2026 Notes and used a portion of the net proceeds from
the 2026 Notes to purchase the capped call transactions and, together with cash
on hand, we repurchased the Atairos Notes in May 2021. See Item 1, Note 5,
Financing Arrangements, for additional information.
We believe that our cash balances, excluding borrowings under the Amended Credit
Agreement, and cash generated from operations will be sufficient to meet our
working capital requirements and capital expenditures for at least the next 12
months. We plan to continue to actively manage and optimize our cash balances
and liquidity, working capital and operating expenses, although there can be no
assurances that we will be able to do so.
As of June 30, 2021, we had $52.0 million in cash held by our international
subsidiaries, which is primarily denominated in Euros, British Pounds Sterling,
Canadian dollars, and, to a lesser extent, Australian dollars. In general, it is
our practice and intention to re-invest the earnings of our non-U.S.
subsidiaries in those operations. We have not, nor do we anticipate the need to,
repatriate funds to the United States to satisfy domestic liquidity needs
arising in the ordinary course of business.
In May 2018, the Board authorized us to repurchase up to $300.0 million of our
common stock under our share repurchase program. As of June 30, 2021, up to
$245.0 million of common stock remained available for purchase under our
program. The timing and amount of share repurchases, if any, will be determined
based on market conditions, limitations under the Amended Credit Agreement,
share price, available cash and other factors, and the share repurchase program
may be terminated at any time. Repurchases will be made in compliance with SEC
rules and other legal requirements and may be made, in part, under a Rule 10b5-1
plan, which permits share repurchases when we might otherwise be precluded from
doing so.
                                       46

--------------------------------------------------------------------------------

Contractual Obligations and Commitments
Our contractual obligations and commitments as of June 30, 2021 did not
materially change from the amounts set forth in our 2020 Annual Report on Form
10-K, except as disclosed in Item 1, Note 5, Financing Arrangements and Note 6,
Commitments and Contingencies.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of June 30, 2021.
Critical Accounting Policies and Estimates
The preparation of condensed consolidated financial statements requires
management to make estimates and assumptions that affect the reported amounts
and classifications of assets and liabilities, revenue and expenses, and related
disclosure of contingent liabilities. Management bases its estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates.
Management's Discussion and Analysis of Financial Condition and Results of
Operations is based upon our condensed consolidated financial statements, which
have been prepared in accordance with U.S. GAAP. Our significant accounting
policies are discussed in Part II, Item 8, Note 2, Summary of Significant
Accounting Policies in our Annual Report on Form 10-K for the year ended
December 31, 2020. In addition, refer to the critical accounting policies and
estimates under Part II, Item 7, Management's Discussion and Analysis of
Financial Condition and Results of Operations in our Annual Report on Form 10-K
for the year ended December 31, 2020.
                                       47

--------------------------------------------------------------------------------

Recently Issued Accounting Standards
In October 2020, the FASB issued ASU 2020-10, Codification Improvements. This
ASU amends a variety of Topics, including presentation and disclosures of
financial statements, interim reporting, accounting changes and error
corrections. This ASU will be effective for annual reporting periods beginning
after December 15, 2021 and interim periods within those annual periods
beginning after December 15, 2022 and early adoption is permitted. We are still
assessing the impact of ASU 2020-10 on our condensed consolidated financial
statements.
There are no other accounting standards that have been issued but not yet
adopted that are expected to have a material impact on our condensed
consolidated financial statements.
                                       48

--------------------------------------------------------------------------------

© Edgar Online, source Glimpses

All news about GROUPON, INC.
09:49aGroupon Appoints Kedar Deshpande as New CEO
DJ
09:24aGroupon Names Kedar Deshpande Chief Executive
MT
09:11aGROUPON : Appoints Kedar Deshpande as Chief Executive Officer - Form 8-K
PU
09:02aGROUPON, INC. : Change in Directors or Principal Officers (form 8-K)
AQ
09:01aGroupon Appoints Kedar Deshpande as Chief Executive Officer
BU
11/09Wedbush Trims Groupon's Price Target to $30 From $33, Citing COVID-Related Headwinds; N..
MT
11/05Groupon, Square Announce Partnership For Platform Integration
MT
11/05Groupon Earnings Rise, Revenue Declines in Q3; Shares Up in Premarket Activity
MT
11/05New Groupon and Square Partnership Allows Local Merchants to Create Groupon Campaigns D..
BU
11/05Groupon and Square Partnership Allows Local Merchants to Create Groupon Campaigns Direc..
CI
More news
Analyst Recommendations on GROUPON, INC.
More recommendations