Q1 2024 Groupon Inc Earnings Call

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Operator: Hello, and welcome to Groupon's first quarter of 2024 financial results conference call. On the call today are CEO Dusan Senkypl, CFO Jiri Ponrt, and FPP Corporate Development Investment Relations Rana Kashyap. At this time, all participants are in a listen-only mode. A question and answer session will follow the company's formal remarks. To ask a question, please press the star key, followed by the number one on your touchtone phone. Once again, that's star one to ask a question.

Hello, and welcome to <unk> first quarter of 2024 financial results conference call on the call today are CEO <unk> <unk> CFO.

Operator: CFO, Uri Bonner and SVP corporate development Investor Relations Rodney Gotcha at this time, all participants are in a listen only mode.

Operator: A question and answer session will follow the company's formal remarks, so asking a question. Please press the star key followed by the number one on your Dutch don't quote once again Thats Star one to ask a question today's conference call is being recorded.

Operator: Today's conference call is being recorded. Before we begin, Groupon would like to remind listeners that the following discussion and responses to your questions reflect management's views as of today, May 9th, 2024 only and will include forward-looking statements. Actual results may differ materially from those expressed or implied in the company's forward-looking statements. Groupon undertakes no obligation to update these forward-looking statements as a result of new information or future events. Additionally, information about risks and other factors that could potentially impact the company's financial results is included in its earnings release and in its filings with the SEC, including its quarterly reports on Form 4 and 10Q.

Operator: Before we begin I would like to remind listeners that the following discussion and responses to your questions reflects management's views as of today may <unk>.

Operator: <unk> 2000, Twenty's mode only.

Operator: Forward looking statements actual results may differ materially from those expressed or implied in the companies. We're looking statements Groupon.

Operator: <unk> undertakes no obligation to update forward looking statements as a result of new information or future events.

Operator: Additionally, information about risks and other factors that could potentially impact the company's financial results are included in its earnings press release and in its filings with the SEC, including its quarterly report on Form 10-Q.

Operator: We encourage investors to use move on the Investor Relations website at Investor Groupon Dot com as a way of easily finding information about the company Groupon promptly makes available on this website. The reports that the company files or furnishes with SEC corporate governance information and select press releases and social media postings.

Operator: On the call today. The company will also discuss the following non-GAAP financial measures adjusted EBITDA and free cash flow and coupons press release and filings with SEC each of which is posted on its investor Relations website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to the most comparable.

Operator: Under U S GAAP.

Operator: We encourage investors to use Groupon's investor relations website at investor.groupon.com as a way of easily finding information about the company. Groupon promptly makes available on this website the reports that the company files or furnishes with the SEC, corporate governance information, and select press releases and social media posts. On the call today, the company will also discuss the following non-GAAP financial measures, adjusted EBITDA, and free cash flow. In Groupon's press release and its filing with the SEC, each of which is posted on its Investor Relations website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to the most comparable measures under U.S. GAAP. Before we begin, I'd like to apologize for the technical difficulties that have caused this call to start late. And with that, I'm happy to turn the call over to Dusan.

Speaker Change: Before we begin I'd like to apologize for the technical difficulties with Brian in his call late.

Dusan: With that I'm happy to turn the call over to do shop.

Dusan: Hello, and thanks for joining us for our first quarter of 2020 quarter earnings call.

Dusan Senkypl: Hello, and thanks for joining us for our press quarter 2024 earnings call. It's a pleasure to be with all of you.

Dusan Senkypl: Pleasure to be with all of them.

Dusan Senkypl: Today's prepared remarks are posted on our investor relations website along with an investor presentation which I will refer to during my remarks. In addition, I encourage you to review our press release and TEN-Q, which contain more detail on our first quarter results. I will start today's call on slide five and cover our first quarter numbers.

Dusan Senkypl: Today's prepared remarks are posted on our Investor Relations website, along with our Investor presentation, which I will refer to during my remarks.

Dusan Senkypl: Alicia I encourage you to review our press release, and 10-Q, which contains more detail on our first quarter results.

Dusan Senkypl: I'll start today's call on slide five and cover our first quarter numbers.

Dusan Senkypl: Our business grew plus 1% year-over-year in the first quarter. While 1% growth is far below my ultimate goal and the opportunity I see ahead, I am pleased to achieve this milestone. You need to travel back 8 years to 2016 to find the last time that Groupon grew revenue on a consolidated basis.

Dusan Senkypl: Our business grew plus 1% year over year in the first quarter.

Dusan Senkypl: By one 1% growth at or below my ultimate goal.

Dusan Senkypl: I am pleased to achieve this milestone you need to sort of go back eight years from 2016 to find the last time. The Groupon grew revenue on a consolidated basis.

Dusan Senkypl: Our strong performance in Q1 was driven by our NERP America segment, where revenues in our NERP America local and travel categories were up a combined 8% year-over-year. In addition, our active customers in North America, both local and travel, grew on a sequential basis. As a reminder, these two categories represented 74% of our total business in Q1. While we are far from declining victory and clearly have more work to do in our international segment and our goods category, we believe the improved performance of our main market is a strong positive indicator that our transformation plan is working. There is no single silver bullet that drives this improved performance.

Dusan Senkypl: Our strong performance in Q1 was driven by our North America segment.

Dusan Senkypl: Revenues in our North America, local and travel categories.

Dusan Senkypl: Combined 8% year over year.

Dusan Senkypl: Additionally, our <unk> customers.

Dusan Senkypl: Local and travel grew on a sequential basis.

Dusan Senkypl: A reminder, these two categories represented 74% of our total business in Q1.

Dusan Senkypl: While we are far from declaring victory and clearly have more work to do.

Dusan Senkypl: International segment, and our groups Coco Libre.

Dusan Senkypl: We believe the improved performance mainly market, it's a strong positive indicators that our transformation plan is working.

Dusan Senkypl: There is no single silver bullets drove this improved performance is a result of many changes with our transformation plan across our business, including but not limited to rebuilding our performance marketing channels and as you think.

Dusan Senkypl: It's the result of many changes aligned with our transformation plan across our business, including but not limited to rebuilding our performance marketing channels, reducing our reliance on promotional spend, improving our productivity through addressing low-hanging fruit across our business, and improving supply quality through our sales transformation efforts and returning merchants as the macroeconomy normalizes. Taking a step back, a year ago, our business was declining over 20% with negative adjusted EBITDA, and we had disclosed substantial doubt as to whether we had enough cash on hand to meet our bills as they came due over the next 12 months.

Dusan Senkypl: Our reliance on promotional spend.

Dusan Senkypl: Moving our productivity through other low hanging fruit across our business.

Dusan Senkypl: Proving supply quality through our sales transformation efforts and returning as much.

Dusan Senkypl: As the macroeconomic normalizes.

Dusan Senkypl: Stepping back a year ago.

Dusan Senkypl: Our business was declining over 70% adjusted.

Dusan Senkypl: Adjusted EBITDA and we had disclosed substantial depth on whether we have enough cash on hand to meet our bills as they come due over those next 12 months.

Dusan Senkypl: Fast forward to today, we can see our top line is stabilizing, and our last 12 months' adjusted EBITDA is at $80 million. Our Q1 cash flow performance significantly improved compared to previous years. And there is no longer substantial doubt about our ability to meet our obligations as they come due. In short, our business, which was in critical condition after a long-losing spell, is back on its feet, but not yet firing on all cylinders. Momentum is in the right direction, but continued rehab is required to get back to winning again.

Dusan Senkypl: As part of our call today, and you can see our supply and is stabilizing and our last 12 months adjusted EBITDA.

Dusan Senkypl: Hello.

Dusan Senkypl: Our Q1 cash flow performance significantly improved compared to prior years.

Dusan Senkypl: And there is no longer a substantial doubt on our ability to meet our obligations as they come due.

Dusan Senkypl: And sharp.

Dusan Senkypl: Our business in critical condition. After a long closing style is back on its feet.

Dusan Senkypl: About the nuclear that's firing on all cylinders.

Diana Shaw: And alright, Diana Shaw.

Dusan Senkypl: Continue to Ehealth is required to get back to winning.

Dusan Senkypl: With enough time, discipline, and consistency, I am confident we can restart the engines of sustained growth and realize the potential we all see for our business. Slide six: Marketplace Management. On the demand side of the marketplace, we continue to see improving trends in the number of unique visitors, driven by growth in paid channels and improving rates of decline in direct and managed channel traffic. Within PACE channels, we delivered on our desired ROI targets while continuing to grow in SCM and display.

Dusan Senkypl: Time discipline and consistency I'm confident we can restart of amgen of sustained growth and realize the potential of the OCC for our business.

Dusan Senkypl: Slide six marketplace management.

Dusan Senkypl: On the demand side of the marketplace, we continue to see improving trends in the number of unique visitors.

Dusan Senkypl: By growth in paid channels and improving rates of decline in direct in a managed channel correct.

Dusan Senkypl: We've been faced channels, we delivered on our desired ROI targets, while continuing to grow in STM and display.

Dusan Senkypl: It's a reminder, in Q1 and Q2 of last year, we rebuilt our performance marketing campaigns, and we were just starting to ramp up our paid spend, so we are lapping easy comparisons this quarter and next quarter. On the supply side of the marketplace, we continue to see strength in our things to do vertical and our enterprise accounts, where we see former Groupon merchants return to our platform after a long hiatus, and existing Groupon merchants increase the amount of business they want to do with Groupon. Both are encouraging signals.

Dusan Senkypl: As a reminder, in Q1 and Q2 of last year, you build our performance marketing campaigns and we were just starting to ramp up our spend so we are lapping easy comparisons this quarter our next speaker.

Dusan Senkypl: On the supply side of the marketplace, we continue to see strength in our things to do vertical and our enterprise accounts, where do we see pharma groupon merchants onto our platform after al on the highest dose and existing groupon merchants increase.

Dusan Senkypl: The amount of business that you want to do with goodwill.

Dusan Senkypl: Both are encouraging signals.

Dusan Senkypl: We also saw growth great performance from North America.

Dusan Senkypl: We also saw great performance from North American travel in Q1. The largest driver was an increase in the number of days lived on our side by our largest accumulation margin. In late 2023, we implemented a connectivity solution with this accommodation merchant. By removing friction from the booking process, we've been able to reduce our operating costs and become a more favorable channel for one to distribute their inventory on a more consistent basis.

Dusan Senkypl: The largest driver.

Dusan Senkypl: The increase in the number of days slide on our side by our largest accommodation Marcelo.

Dusan Senkypl: In late 2020 free we implemented a connectivity solution this accommodation Marcelo.

Dusan Senkypl: Removing friction from the booking process.

Dusan Senkypl: In April to reduce.

Dusan Senkypl: Operating costs and become more favorable channel program to distribute our inventory on a more consistent basis configuration also leads to a better customer experience.

Dusan Senkypl: The integration also leads to a better customer experience. This is a great example of the bookability flywheel in practice and one we are looking to build on across our business. That said, going forward, I don't expect North America travel to post a similar growth rate in Q2.

Dusan Senkypl: A great example of the Bookable at the flywheel in breakfast and one we are looking to build on Iqos our business.

Dusan Senkypl: That said going forward I don't expect North America travel to post a similar growth rate in Q2 of several factors, including a recent site performance issues, which I'll cover on the next slide.

Dusan Senkypl: Several factors, including recent site performance issues, which I will cover on the next slide, have hurt our North America travel performance in Q2. Finally, as announced at our last earnings call, we have taken a regionalized approach to managing our sales teams for local in VUS, with each sales region having dedicated sales reps to drive freshness and account managers to maintain and grow existing businesses, all guided by an expert market manager. The inclusion of territory expertise is another dimension to our sales reps, providing several benefits, including a local marketplace and market understanding of gaps between inventory and customer demand. Awareness of competitive supply and the impacts of shifting sales and local nuances in preferred deal structures and target economics

Dusan Senkypl: Our North America performance in Q2.

Dusan Senkypl: Finally.

Dusan Senkypl: Announced at our earnings call, we have taken a regionalized approach to managing our sales teams for local in the U S.

Dusan Senkypl: Each sales three gentlemen, dedicated sales reps drive freshness and account managers to maintain and grow existing businesses.

Dusan Senkypl: They did buy an expert market manager.

Dusan Senkypl: The inclusion of territory expertise another dimension to our sales so that's providing several benefits, including a local marketplace market understanding of gaps between inventory and customer demand.

Dusan Senkypl: Mess of competitive supply.

Dusan Senkypl: And impacts of shifting sales and local nuances and preferred deal structures and target economics.

Dusan Senkypl: Slide seven product updates.

Dusan Senkypl: Slide seven, product update. Starting in mid-March, we started to experience an unexpected drop in performance as we saw a pullback in our conversion funnel despite minimal changes to traffic trends. This has impacted our April results and continued into early May. The drop in performance happened around the same time we were ramping up our new front end, which initially led us to suspect our new front end was causing the performance change. On further investigation, we diagnosed the conversion issues were mainly related to two separate short-term technical issues.

Dusan Senkypl: Starting in mid March we started to experience an unexpected drop in performance as we saw a pullback in our conversion funnel despite minimal change to that I think Charles this.

Dusan Senkypl: This has impacted our April results and continued into early may.

Dusan Senkypl: The drop in performance happened around the same time veeva and thank all of our new front end, which initially.

Dusan Senkypl: Initially, let also suspect our new front and what's causing the performance change.

Dusan Senkypl: And there are further investigation and diagnosed the conversion issues mainly related to two separate short term technical issues.

Dusan Senkypl: First as part of our efforts to modernize our technology stack you launched a new first party tool identifies potentially bolt on transactions on our platform, replacing an old internal tool that it was very manual integration and deliver a poor customer experience every day.

Dusan Senkypl: As part of our efforts to modernize our technology stack, we launched a new third-party tool that identifies potentially fraudulent transactions on our platform, replacing an old internal tool that was very manual, inefficient, and delivered a poor customer experience. Every month, our customers were sending us thousands of complaints about unfulfilled orders, which at their root were caused by lengthy order processing times linked to fraud verification. Our new process evaluates transaction risk in an instant, resulting in a much improved customer experience.

Dusan Senkypl: Most of our customers that are sending us zones of complaints about fulfilled Argos.

Dusan Senkypl: Were caused by a lengthy order processing time selected to photo verification.

Dusan Senkypl: Our new process evaluates that infection risk in an instant.

Dusan Senkypl: I think in a much improved customer experience overtime, we expect our upgraded <unk> platform will lead to better conversion.

Dusan Senkypl: Over time, we expect our upgraded platform will lead to better conversion. Unfortunately, due to initial learning curves specific to our business, the new process initially hurt us more than it helped us. We have been working hard to close the gap and have almost achieved performance parity with the old solution in the last few days. Second, we ran into a challenge with our legacy search and relevance algorithm. We previously made the decision to move away from our internally developed algorithm and adopt a third-party tool which is already powering search and relevance on our new front end and several legacy applications. Unfortunately, one of our larger legacy applications still relies on our legacy solution.

Dusan Senkypl: Unfortunately, you initial learning curve specific to our business the new process initially hurt us more than it is to help us.

Dusan Senkypl: We have been working hard to close the gap and have almost achieved performance, partly because the old solution in the last few days.

Dusan Senkypl: Second we are into a challenging our legacy search umbrella I will go ahead.

Dusan Senkypl: Previously made the decision to move away from our internally developed algorithms.

Dusan Senkypl: Our first party tool, which is already powering search and the relevance of our new from several Augusta applications.

Dusan Senkypl: Fortunately one of our larger legacy applications stiletto eyes on overall I guess the solution.

Dusan Senkypl: We made the basic fix, but the long-term fix will require us to migrate 100% to the new front end. Search & Relevance is a core service for our marketplace, and I see a significant opportunity to drive better conversion over time once we have our new front-end in place. This is a lot of operational detail, but I want investors to understand what is driving our performance as well as our challenges. Overall, we have already recovered the majority of the performance drops, but we are still not back to where we would like to be.

Dusan Senkypl: Made the basic stakes, although long term fixes will require us to migrate 100% of the new from Todd sorry.

Dusan Senkypl: Search and the relevant <unk> core service for our marketplace and I see a significant opportunity to drive better conversion over time.

Dusan Senkypl: Our new fronts in place.

Dusan Senkypl: This is not a lot of operational detail.

Dusan Senkypl: And investors to understand what is driving our performance as well as our challenges.

Dusan Senkypl: Overall, we have already recovered the majority of the performance drop, but we are still not back to where we would like to be we expect it will take us the better part of the second quarter to get them back on track and is the main reason behind our second quarter guidance, which you can provide.

Dusan Senkypl: We expect it will take us the better part of the second quarter to get back on track and is the main reason behind our second quarter guidance, which Jiri will provide. Turning to the new front-end, in the midst of the performance issues, we made a decision to pull back on the ramp-up of our new front-end, which at the time was running at 50% of web traffic in North America. It's currently back to 3%, and we expect it to start ramping back up later this quarter.

Dusan Senkypl: Turning to the new front and.

Dusan Senkypl: In the midst of the performance issues, we made the decision to pull back on the ramp up of our new front end, which added.

Dusan Senkypl: <unk> was running at 60%.

Dusan Senkypl: America is.

Dusan Senkypl: Currently back to 3%.

Dusan Senkypl: Expect to start ramping back up later this quarter. Our goal is to have the new front absolutely.

Dusan Senkypl: Our goal is to have the new front end fully ramped on all surfaces in all regions in time for the Q4 holiday season. Navigating the operational complexity facing our business has made it significantly harder than I expected to make quick changes to our product proposition. Based on my prior experiences building internet products, I believe it would take a small team of developers a matter of months to recreate Groupon's front-end experience. The difficult part of Groupon is integrating the new front end into the wide array of existing legacy internal services that make up the rest of our technology stack.

Dusan Senkypl: All sort of phases in already Jones in time for the Q4 holiday season.

Dusan Senkypl: Navigating the operational complexities they faced in our business that made it significantly harder than I expected to make quick changes to our product proposition.

Dusan Senkypl: Based on my prior experiences building Internet products I believe it will take a small team of developers a metro model to recreate groupon from public sphere.

Speaker Change: Thanks, Doug.

Dusan Senkypl: The difficult part of Groupon is integrating the new front end and to revise all right.

Dusan Senkypl: <unk> internal services that make up the rest of our technology stack.

Dusan Senkypl: We are making progress, and I am confident that we will deliver on our goal to modernize Groupon, but it's taking longer than I originally expected. Given the operationally complex turnaround, I expect we will continue to face hurdles that may delay our progress and may impact short-term performance, but not lessen our results.

Dusan Senkypl: Making progress and I am confident that we will deliver on our goal to modernize the groupon.

Dusan Senkypl: Taking longer than I originally expected.

Dusan Senkypl: Given the operational complexity.

Dusan Senkypl: Expect we will continue to face hurdles, which may delay our progress and it may impact short term performance.

Dusan Senkypl: Plus an hour or so.

Dusan Senkypl: I still expect our business to inflect to sustain growth sometime in the second half of this year, but exactly when, within the six-month period we inflect will depend on our delivery of our project twice, eight, and nine. As we updated investors at our last earnings, we have shifted into the building phase of our transformation and are working on many projects across the company to change our customer experience on both sides of the marketplace.

Dusan Senkypl: I still expect our business to inflect the sustained growth sometime in the second half of the CR, but exactly when they are in that six month period to be inside will depend on our deliberate in our approach.

Dusan Senkypl: Slides eight and nine.

Dusan Senkypl: As we updated investors at our last earnings we have shifted into the building phase of our transformation and our work.

Dusan Senkypl: On may projects across the competitive change our customer experience on both sides of the marketplace.

Dusan Senkypl: Our vision is to build a healthier marketplace at Groupon through driving the merchant and customer flywheel. The core idea is that changing Groupon's value proposition for a consumer or business won't come from a single grand gesture or a splashy brand campaign but through a series of never-ending product enhancements that address customer pain points. Each incremental change builds on the value on both sides of our marketplace from doing business with Groupon and reinforces the flywheel effect.

Dusan Senkypl: Our vision is to build a healthier marketplace at groupon fruit driving merchant and customer Flywheels.

Dusan Senkypl: Core idea is the changing <unk> value proposition for a consumer or business. It won't come from a single grabbing gesture or especially but I am campaign.

Dusan Senkypl: Through a series of the never ending put it up again.

Dusan Senkypl: Let's address customer pain points.

Dusan Senkypl: Each incremental change builds on the value on both sides of our marketplace from doing business with Groupon and reinforces the Ryan flywheel effect.

Dusan Senkypl: Trust is at the center of our efforts on both our customer and merchant flywheels, and we believe it is essential for a healthy marketplace. For merchants, we want to become a trusted marketing partner for them to acquire and retain customers. For consumers, we want to be a trusted and convenient destination for local experiences and services. Let me provide a few examples of what we are doing to build trust in our marketplace. First, we recently delivered a new feature to our local merchants in North America to enhance transparency for merchants by providing them with dashboards to monitor deal performance and share the impact on their sales when running on promotion. This is just the beginning.

Dusan Senkypl: Trust is at the <unk>.

Dusan Senkypl: Our efforts on both our customer and merchant flywheel and we believe it is essential for health care marketplace.

Dusan Senkypl: For our merchants, we want to become a trusted marketing partner program to acquire and retain customers for consumers, we want to be a trusted and convenient destination for local experiences and services.

Dusan Senkypl: Let me provide a few examples of what we are doing to build trust in our marketplace.

Dusan Senkypl: We recently delivered our new feature to our local merchants in North America to enhance transparency for our merchants by providing them with the dashboards to monitor performance and sharing the impact automotive sales have been running promotions. This is just the beginning we are laying the groundwork to offer advanced simple tools to help mark.

Dusan Senkypl: We are laying the groundwork to offer advanced but simple tools to help merchants manage their deals and achieve their business objectives. Second, in line with our strategy of shifting from quantity to quality, we have taken action to remove low-quality deals from our inventory and progressed with an initiative to help quality merchants curate their deals. We are using AI to identify merchants' unique selling points and then significantly enhance deal content, including imagery and, in the future, video, to capitalize on what sets these merchants apart and drive demand for their deals.

Dusan Senkypl: Managed better deals and achieve their business objectives.

Dusan Senkypl: Second.

Dusan Senkypl: Our strategy of shifting from quantity to quality, we have taken action to remove low quality deals from our inventory and progress on our initiatives to help quality merchants curate better deals.

Dusan Senkypl: Using AI to identify merchants unique selling points and Dennis significantly enhanced video content, including inventory and in the future of goodwill to capitalize on what sets <unk> apart and drive demand.

Dusan Senkypl: Alright, our applicability in a shot at it.

Dusan Senkypl: Third, our bookability initiatives. I earlier mentioned how connectivity helped drive better performance with one large accommodation merchant in travel. We recently launched an integration with SightMinder, a leader channel manager with over 41,000 hotel connections globally. Connections will help us more seamlessly and dynamically onboard, price, contact, and redeem new hotel partner inventory, while also providing customers with a smooth online booking and redemption experience. However, only roughly a third of our direct accommodation inventory in Treadle is bookable, and our penetration is even lower in local.

Dusan Senkypl: Earlier, I mentioned, how connectivity and help drive better performance with one large accommodation merchants and travel.

Dusan Senkypl: We recently launched launched an integration of excitement there.

Dusan Senkypl: Our leader channel manager if over 41000 hotel connections globally connect.

Dusan Senkypl: Connections will help our small seamlessly and dynamically onboard price Comstock and redeem your hotel partner inventory.

Dusan Senkypl: While also providing customers with a smooth online booking and redemption experience.

Dusan Senkypl: Only roughly a third of our direct accommodation inventory.

Dusan Senkypl: Is bookable and our penetration is even lower in local over time, our strategy is to significantly increase the number of Bookable deals. We currently offer.

Dusan Senkypl: Over time, our strategy is to significantly increase the number of bookable deals we currently offer. Before I turn the call over to Jiri, let me make a few closing remarks. As announced earlier this week, I reached an agreement with our board to assume the role of permanent CEO. First, I want to thank the board for their confidence in me to continue to lead the company.

Jiri: Before I turn the call over to <unk>, Let me provide a few closing remarks.

Speaker Change: As announced earlier this week <unk> reached an agreement with our board to assume the role as chairman and CEO.

Jiri: I want to thank the board for their confidence in EMEA continue to lead that component.

Speaker Change: A few months my motivation for taking this permanent role.

Dusan Senkypl: If you want my motivation for taking this permanent role, the work is not done. My aim is to bring Groupon on a sustainable growth trajectory and build a motivated, performance-driven management team that can push Groupon to new levels. The top line opportunity ahead of Groupon is massive, and we are drawing inspiration from a transformation playbook. Our main blocker in this respect is our capacity to execute. It really comes down to.

Dusan Senkypl: The FERC is no donlin.

Dusan Senkypl: My aim is to bring <unk> into a sustainable growth trajectory and built a motivated performance ahead of our management team, which can push groupon to new levels.

Dusan Senkypl: The top line opportunity head of Groupon is massive and we are drawing inspiration of promo transformation playbook.

Dusan Senkypl: Okay.

Dusan Senkypl: Our main broker in this respect is our capacity to execute.

Dusan Senkypl: It really comes down to people.

Dusan Senkypl: Building a motivated, performance-driven management team made up of A-plus players is a necessary condition to achieve our ambition. Compensation is a crucial ingredient in recruiting, retaining, and motivating our employees. My desire is to have one of the most performance-oriented compensation programs in all of NASDAQ and use it as an invitation to A-plus players around the world that Groupon can be a great place to build achiever ambition and be appropriately rewarded with a piece of ownership in our company.

Dusan Senkypl: Building and motivated performance driven management team made up of a plus players is a necessary condition to achieve our ambition.

Dusan Senkypl: Compensation as a crucial ingredient in recruiting retaining and motivating our freedom.

Dusan Senkypl: My desire is to have one of the most broke performance oriented compensation program of NASDAQ.

Dusan Senkypl: And use it as an invitation to April players around the world with Groupon. It can be a great place to build achieve our ambition and be appropriately rewarded with a piece of ownership in our company.

Dusan Senkypl: This is why, starting with my new CO compensation package, we are rolling out a new multi-year performance compensation program for our entire senior leadership team. The main concept we are bringing is that our leadership team should only earn equity in our business if we create sustained value for shareholders above a certain hurdle range. I simply don't believe our leaders should earn equity in our business solely based on time served. At the same time, above a preferred return for investors, I believe our leaders should share in a portion of the upside.

Dusan Senkypl: This is why starting with my new CEO compensation package.

Dusan Senkypl: Link out a new multiyear performance compensation program for our entire senior leadership team.

Dusan Senkypl: The main concept, we are bringing our leadership teams with only an.

Dusan Senkypl: In our business, if we create sustained value for shareholders about so about the silicon the hurdle rate.

Dusan Senkypl: I simply don't believe already should earn equity in our business. So will it based on client startup.

Dusan Senkypl: At the same above are preferring to that center for our investors.

Dusan Senkypl: I believe our leadership share in a portion of the upside.

Dusan Senkypl: While more details of the program are disclosed in our proxy and in my CEO Performance Share Agreement file, along with the CEO announcement in our recent 8K filing, there are a few principles I want to share here. We have established stock price hurdles that are sufficiently challenging to produce market-beating returns and reflect ambitious growth rates for the underlying fundamental drivers of our business. PSU awards will be best only if both a stock price hurdle requirement and a service condition requirement are achieved.

Dusan Senkypl: More details of the program are disclosed in our proxy and my CEO performance share agreements filed.

Dusan Senkypl: The CEO announcement in our recent 8-K filing a few principles I want to share here.

Dusan Senkypl: We have assembly stock price hurdles.

Dusan Senkypl: Sufficiently challenging to produce market, beating great sorrow.

Dusan Senkypl: Reflect ambitious growth rates for the underlying fundamental drivers of our business.

Dusan Senkypl: PSU Awards will vest only if both of us.

Dusan Senkypl: PSU awards will be best only if both a stock price hurdle requirement and a service condition are met. This means if no hurdles are achieved, no sheriffs will back down, or if a hurdle is achieved but not the service condition, those shares will not vanish. As an example, if the 90-day calendar day average stock price reaches $15 a year from now, approximately 8% of the outstanding PSU awards would. In total, we are currently expecting to award roughly 4 million shares to our existing management team, equally split into tranches of roughly 1 million shares per each team.

Dusan Senkypl: Vertical bogman and a service condition that environment are achieved.

Dusan Senkypl: This means if no hurdles are achieved no shares will vest.

Dusan Senkypl: Or if the hurdle is achieved automotive service.

Dusan Senkypl: Those shares will not divest.

Dusan Senkypl: As an example, if the 90 day cartons per day average took price reaches $15 a year from now approximately 80% of the outstanding PSU evolves, we'll glass.

Dusan Senkypl: In total yes.

Dusan Senkypl: We expect to absorb roughly 4 million shares through our existing management team equally split in two tranches are.

Dusan Senkypl: Roughly about 1 million shares for each local alright.

Dusan Senkypl: I've heard, do not expect to issue any time-based restricted stock awards in tandem with the PSU awards to our senior leadership. And as long as I'm leading this company as CEO, I don't anticipate a scenario in which I would ask shareholders for additional shares until our stock price exceeds $70 per share. Please reach out to IR at groupon.com with any questions. Your vote is important to me, and I look forward to receiving your support. Turning around a business like Groupon is tough, and like many entrepreneurial endeavors, there are daily roadblocks and negative data points. But it's important to separate noise from signal.

Dusan Senkypl: We do not expect to issue any time base to restricted stock awards in tandem with the PSU awards to our senior leadership team.

Dusan Senkypl: As long as I am leaving this company as CEO I don't anticipate a scenario in which I will ask shareholders for additional shares until our stock price exceeds $70 for a sharp.

Dusan Senkypl: Please reach out to IR at Groupon, but Congress enact restaurants. Your vote is important to me and I look forward to receiving Gil suburbs.

Dusan Senkypl: Turning around that business like Groupon is stock and like minded entrepreneurial endeavors.

Dusan Senkypl: Daily Roadblocks, a mega fleet data points.

Dusan Senkypl: Important to separate noise from signal the current groupon experience on both sides of the marketplace filled with friction.

Dusan Senkypl: The current Groupon experience on both sides of the marketplace is filled with friction. While customer obsession is a common talking point for many management teams, Groupon has been internally focused for too long, and solving more of our customer pain points will be the key to finding our way to sustain growth. Another big positive I see is the Groupon brand. Internally, I was positively surprised to see how many Grouponers bleed green and are committed to making Groupon successful.

Dusan Senkypl: Customer obsession is a common talking points for many management teams Groupon hasnt been internally focused for too long term solving more of our customer pain points will be the key to finding our way to sustained growth.

Dusan Senkypl: Another big positive I see is the Groupon brand stacks.

Dusan Senkypl: I was positively surprised to see how many groupon OS breeds green and are committed to making groupon a successful.

Dusan Senkypl: When I see the emotional attachment our team has to the Groupon brand, and how deep that connection is, I feel a lot of admiration, and I want to build on this heritage and develop Groupon into something we can all be proud of. And externally, I am positively surprised by the reactions we have on social networks and influencer posts when a great Groupon deal is shared. There are so many people who remember the Groupon brand in a positive way. Our brand is an asset that will help us in the future. With that, I will turn it over to Jiri.

Dusan Senkypl: When I see the emotional attachment our team has to the Groupon brand our <unk> collection.

Jiri: I feel a lot of augment Asia and I hope to build on this heritage and develop groupon into something we can all be proud of.

Jiri: And externally I'm positively surprised by the reactions that you have on social networks and Influencer posts.

Jiri: Groupon deal is being shattered.

Jiri: So many people who remember.

Jiri: The Groupon brand.

Jiri: Our brand is an offset which will help us in the future with that I will turn it over to music.

Jiri: Thank you, Sean and thank you as well to everyone who is joining us today.

Jiri Ponrt: Thank you, Sean, and thank you as well to everyone who is joining us today. It's a pleasure to be speaking with you.

Jiri Ponrt: A pleasure to be speaking with you.

Jiri Ponrt: I will use my time today to provide further insights into our first quarter financial results, progress on our cost-saving initiatives, an update on the other business items, and to update you on what we are doing. Turning to slide 11. Let's jump into our first quarter summary financial report. In the first quarter, we delivered global billings of $381 million, a decrease of approximately 4% year-over-year. Revenue was $123 million and increased 1% year-over-year, a significant improvement in year-over-year trends versus our fourth quarter results and above the high end of the guidance.

Jiri Ponrt: We will use my time today to provide further insights into our first quarter financial results.

Jiri Ponrt: Chris on our cost savings actions.

Jiri Ponrt: On the other business items.

Jiri Ponrt: Our updated outlook.

Jiri Ponrt: Turning to slide 11.

Jiri Ponrt: Revenue as a percentage of gross billing was 32%, an increase of over 150 basis points year-over-year, and we benefited from favorable variable consideration trends, while other sectors were relatively stable. Moving on, our gross profit as a percentage of revenues was 90%. Slight improvement from the prior quarter. Going forward, we expect gross profit as a percent of revenue to remain in the 87 to 90% range. Marketing expense for the first quarter was $29 million, or 26% of gross profit. Going forward, we expect marketing as a percentage of girls' profits to remain within the range we reported over the last three quarters.

Jiri Ponrt: Jump into our first quarter summary financial results.

Jiri Ponrt: In the first quarter, we delivered global billings were 381 million a decrease of approximately 4% year over year.

Jiri Ponrt: Revenue was 123 million and increased 1% year over year significant improvement in year over year variance.

Jiri Ponrt: Our fourth quarter results.

Jiri Ponrt: The high end of the guidance.

Jiri Ponrt: Revenue as a percentage of gross billings will start a two person an increase of over 150 basis points year over year.

Jiri Ponrt: And we benefited from favorable variable consideration burns well.

Jiri Ponrt: I'll just Victor has been relatively stable.

Jiri Ponrt: Moving on our gross profit as a percentage of revenues both 90 person.

Jiri Ponrt: <unk> improvement from the prior quarter going forward, we expect gross profit as a park central for Evan to remain in the 87% to 90% range.

Jiri Ponrt: Marketing expense for the first quarter, most of that day 90 million or 26% of gross perfect.

Jiri Ponrt: Going forward, we expect market.

Jiri Ponrt: Girls perfect to remain within the range.

Jiri Ponrt: We reported over the last three quarters.

Jiri Ponrt: Adjusted EBITDA, most positive $20 million.

Jiri Ponrt: Adjusted EBITDA was positive $20 million, and we recorded the fourth straight quarter of positive adjusted EBITDA. Our last 12-month adjusted EBITDA has now reached $80 million, a $93 million increase versus our previous 12-month adjusted EBITDA a year ago. Turning to cashflow, First quarter operating cash flow was negative $10 million, and free cash flow was negative $14 million. A strong improvement versus last year when we reported free cash flow of negative $86 million.

Jiri Ponrt: <unk> is the fourth straight quarter of positive adjusted EBITDA.

Jiri Ponrt: Our last 12 months adjusted EBITDA is now reached 18 billion, a $97 million increase versus our previous both months of adjusted EBITDA a year ago.

Jiri Ponrt: Turning to cash flow.

Jiri Ponrt: We ended the quarter with $159 million in cash and cash equivalents. Please note that our cash position excludes $30 million of restricted cash, which primarily relates to collateral posted against our outstanding collectors of credit and reported on our balance sheet in prepaid expenses and other current accounts. Fight well.

Jiri Ponrt: First quarter operating cash flow was negative $10 million and free cash flow was negative 14 million Sterling improvement versus last year, when we reported free cash flow.

Jiri Ponrt: $8 6 million.

Jiri Ponrt: We ended the quarter with $159 million in cash and cash equivalents. Please note that our cash position excludes for timberland.

Jiri Ponrt: $10 million of restricted cash, which Brian <unk> relates to cooler thorough posted against our outstanding letters of credit.

Jiri Ponrt: And I reported on our balance sheet and prepaid expenses and other current assets.

Jiri Ponrt: Slide 12.

Jiri Ponrt: We had approximately 60 million active customers and borgwarner as of quarter end down <unk> 4 million from the prior quarter.

Jiri Ponrt: We had approximately 16 million active customers worldwide as of quarter end, down 0.4 million from the prior quarter. This is North America. Our active customer count was down sequentially very slight, and when you exclude our root category, our North America active customer, the root sequential. Turning to our local content.

Jiri Ponrt: The North America.

Jiri Ponrt: Active customer count was down sequentially very slightly.

Jiri Ponrt: And when you exclude our roots category, our North America active customers grew sequentially.

Jiri Ponrt: Turning to our local category.

Jiri Ponrt: Consolidated Luca billings were $316 million flat compared with the prior year.

Jiri Ponrt: Consolidated local billings were $316 million, flat compared with the prior year. Within North America, we delivered local billings of $231 million, up 4% compared with the prior year. Northern America Local Billings Benefited from Lava Reference. Excluding this positive impact, North America local billings would have declined slightly. It's an international business; we deliver local billings of $85 million, down 9% year-over-year. Booing to our Trevor category.

Jiri Ponrt: America, we deliver local billings of $231 million up 4% compared with the prior year.

Jiri Ponrt: North America local billings benefited from lower Burger firms.

Jiri Ponrt: Excluding this positive impact North America local billings would have declined slightly.

Jiri Ponrt: In international we deliver local billings of $85 million down <unk>, 9% year over year.

Jiri Ponrt: Moving to our payroll category in.

Jiri Ponrt: In the first quarter, consolidated table billings were $36 million, up 2% year-over-year. It's in North America that we deliver travel billing growth of 30% year-over-year. It's internationally, travel still has more work to do with billings down 39% year-over-year. We need to have good categories.

Jiri Ponrt: In the first quarter in the first quarter consolidated federal buildings, both 36 million up 2% year over year.

Jiri Ponrt: Within North America, we delivered very good billing growth.

Jiri Ponrt: Person year over year.

Jiri Ponrt: They're not sure they will still have more work to do but things down 59% year over year.

Jiri Ponrt: Moving to our goods category.

Jiri Ponrt: Consolidated goods billings were $29 million, down 36% year over year. Our current business is struggling, and we do not see any near-term change in the negative. At 4% of first quarter revenues and declining rapidly, Group is becoming a smaller and smaller part of our world. Slide 13, Turning to Operating Expenses. Press quota as GNA was $74 million, down 27% year over year, and included $2 million in stock-based compensation and $5 million in depreciation and amortization.

Jiri Ponrt: Consolidated <unk> billings was $29 million down 36% year over year.

Jiri Ponrt: Our garden business and.

Jiri Ponrt: And we do not see any near term change in the negative side.

Jiri Ponrt: It's 4% of first quarter revenues and declining rapidly.

Jiri Ponrt: <unk> is becoming a smaller and smaller.

Jiri Ponrt: Yeah.

Jiri Ponrt: Slide 13, turning to operating expenses.

Jiri Ponrt: First quarter, SG&A was 74 million down 27% year over year and includes $2 million in stock based compensation and $5 million and depreciation and amortization.

Jiri Ponrt: Quarter over quarter, our SG&A was up almost two million, or two percent. This was driven by increased stock-basis compensation, timing related to our cloud migration project, and incremental payroll. While we still expect to realize further savings in our SG&A, we expect the timing of these initiatives to be realized in the second half of the year and expect our second quarter SG&A to be similar or slightly higher compared to our first quarter, white floating, turning to a breakers flow.

Jiri Ponrt: Quarter over quarter.

Jiri Ponrt: Most.

Jiri Ponrt: Almost $2 million or two person.

Jiri Ponrt: <unk> increased basically.

Jiri Ponrt: Base compensation timing created through our cloud migration project and <unk>.

Jiri Ponrt: Incremental payroll cost.

Jiri Ponrt: But we still expect to realize further savings in our SG&A. The expected timing of these initiatives to be realized in the second half of the year and expect our second quarter SG&A to be similar or slightly higher compared to our first quarter.

Jiri Ponrt: Slide 14 earnings to free cash flow.

Jiri Ponrt: Since the first quarter, we generated negative $14 million with free cash flow a significant improvement of 72 million compared to the free cash flow outflow in the first quarter last year.

Jiri Ponrt: In the first quarter, we generated negative $14 million of free cash flow, a significant improvement of $72 million compared to the free cash flow outflow in the first quarter plus. The $72 million improvement was achieved primarily through a $26 million improvement in our accounts payable.

Jiri Ponrt: $72 million improvement was achieved primarily through.

Jiri Ponrt: So $96 million improvement in our accounts payables.

Jiri Ponrt: 74 million increase in our adjusted EBITDA. $13 million improvement in our merchant and supplier payables. $10 million improvement in our operating lease obligations. While the conversion of adjusted EBITDA to free cash flow will move around from quarter to quarter, depending on the timing of our working capital cycle and other cash expenses, we are seeing many of the working capital and cash expense items become more predictable and stable. However, Change in merchants and supplier payables is still a major swing sector from quarter to quarter, evidenced by the 50 million difference between the fourth quarter last year and the first quarter this year. Change in merchant and supplier payables is driven by the annual change in billing along with the quarterly change in billing. [inaudible] Our significantly improved Q1 free cash flow performance sets up well to deliver on our four-year guide for positive cash flow. 515, I have the business update.

Jiri Ponrt: The $94 million increase in our adjusted EBITDA.

Jiri Ponrt: $13 million improvement in our merchant and supplier Fabulous $10 million improvement in our operating lease obligations.

Jiri Ponrt: Well the comparison of adjusted EBITDA to free cash flow will move around from quarter to quarter, depending on the timing of our working capital cycle and obligation expenses.

Speaker Change: D C.

Jiri Ponrt: I think many of the working capital and cash expense items become more predictable and stable. However.

Jiri Ponrt: In merchant and supplier payables.

Jiri Ponrt: A major swing factor from quarter to quarter evidenced.

Jiri Ponrt: Evidenced by $15 million difference between the first quarter last year to first quarter. This year.

Jiri Ponrt: Change in merchant supplier payables as David.

Jiri Ponrt: With change in billings, along with quarter over quarter change in billings.

Jiri Ponrt: Zero.

Jiri Ponrt: Significantly improved Q1 free cash flow performance.

Jiri Ponrt: Bill to deliver on our full year guide.

Jiri Ponrt: Okay.

Jiri Ponrt: Slide 15.

Speaker Change: How does a business update.

Jiri Ponrt: This completed the fallopian transactions to improve our liquidity position in.

Jiri Ponrt: We've completed the following transactions to improve our liquidity position. In fourth quarter 2023, we received $18.9 million in proceeds from the sale of a portion of our stake in Samoa. In January 2014, we closed a fuller backstop rights offering that was significantly oversubscribed and raised $80 million. On February 24th, we prepaid $43.1 million and terminated our credit facility in advance of its maturity in May 2021.

Jiri Ponrt: In first quarter 2020 C V received $18 9 million in proceeds from the sale of a portion of our stake in some of them.

Jiri Ponrt: In January it went before the close of Fuller, Mexico rights offering that was significantly oversubscribed and grace.

Jiri Ponrt: $80 million.

Jiri Ponrt: In February 24.

Jiri Ponrt: Hi, Fotis equal and $1 million and terminated our credit facility and the bonds its maturity in may.

Jiri Ponrt: In April than before.

Jiri Ponrt: In April 2014, we received proceeds from the sale of a non-core intangible asset. In addition to the completed transactions, management continues to evaluate the monetization of certain non-core assets, including the company's remaining stake in SumUp and Github. While there can be no assurances as to whether or when a sale of these non-core assets will be consummated, management currently believes that future non-core asset sales could generate proceeds of approximately $90 million. Moving to the topic of Italy,

Jiri Ponrt: Or you see first seats from.

Jiri Ponrt: From the sale of noncore individual buses.

Jiri Ponrt: In addition to the completed transactions management continues to evaluate the monetization of certain noncore assets, including the company's remaining stake and sum up and get going.

Jiri Ponrt: There can be new assurances as to whether or when a sale of these noncore assets.

Jiri Ponrt: The consumer is it.

Jiri Ponrt: Management currently believes.

Jiri Ponrt: These future non core asset sales could be could generate proceeds of approximately.

Jiri Ponrt: Approximately $19 million.

Jiri Ponrt: Moving to the topic of Italy.

Jiri Ponrt: On April 15th, we updated investors on a negative ruling related to a tax assessment for one of our Italian subsidiaries, Groupon SRL. Since then, Groupon SRL has temporarily paused the sale of the local vouchers in Italy as we evaluate our. We continue to believe that the tax assessment is a self-merit and Groupon SRL has been vigorous in defending itself in this matter. The best-case scenario is that we will prevail on the merit of the cause and resume our Italian operations.

Jiri Ponrt: On April 15th the updated investors.

Jiri Ponrt: Got it ruling related to a tax assessment for one of <unk> subsidiaries Grupo <unk>.

Jiri Ponrt: Since then Grupo <unk>.

Jiri Ponrt: Temporarily pause.

Jiri Ponrt: The local vouchers in Italy.

Jiri Ponrt: Evaluate our options.

Jiri Ponrt: We continue to believe that the Pix assessment is this Alex Murray.

Jiri Ponrt: And Groupon SRO has been bigger for defending itself in this.

Jiri Ponrt: The best case scenario is we will prevail on the merits of the course and I assume its all in operations.

Jiri Ponrt: In the North case, If we are unable to find a reasonable solution to continue operating Groupon SRL, we will consider an exit from the local business in Italy. Local voucher sales in Italy generate revenues of approximately 1 million euros per month. We do not expect our financial exposure to exceed the assets of Groupon SRL. Slide 16.

Jiri Ponrt: In the worst case.

Jiri Ponrt: If we are unable to find a reasonable solution to continue operated group a necessary evil.

Jiri Ponrt: We will consider an exit of the local business in Italy.

Jiri Ponrt: Local voucher sales and Intel in generic revenues of approximately $1 million of Europe by months.

Jiri Ponrt: We do not expect our financial exposure to exceed the office group with material.

Jiri Ponrt: Slide 16.

Jiri Ponrt: Now turning to guidance.

Jiri Ponrt: Now, turning to guidance. As of May 9th, 2024, management is issuing guidance for the second quarter of 2024 as follows. Revenues between $116 million and $122 million, or a decline year-over-year between minus 10 and minus 5, positive adjusted EBITDA between $12 and $17 million. Negative free cash flow, however, we expect it to be better than Q1. Management would also like to reiterate its 2024 outlook that we first issued in November 2023.

Jiri Ponrt: As of May nine 2020 for management is issuing guidance for the second quarter of 2024.

Jiri Ponrt: Yes.

Jiri Ponrt: Our revenues between $160 million, and 122 million or a decline year over year between minus 10 and minus 5%.

Jiri Ponrt: So is it the adjusted EBITDA between <unk> and $17 million.

Jiri Ponrt: And they got a free cash flow however, the expected to be better than Q1.

Jiri Ponrt: Management would also like to reiterate its 2020 full outlook that we first issued in November 2020 free.

Jiri Ponrt: Year-over-year revenue change at minus five to zero. Positive Adjusted EBITDA between 80 and 100 million. And positive breakers flow for the full year. Finally, I would like to provide some additional commentary to assist you with your model.

Jiri Ponrt: Year over year revenue change at minus 520 Brixton.

Jiri Ponrt: Positive adjusted EBITDA between 80 and 100 million.

Jiri Ponrt: Because it is free cash flow for the full year.

Jiri Ponrt: Finally, I would like to provide some initial commentary to assist you with your models.

Jiri Ponrt: As Dusan commented in his script, our platform is facing several technical issues, which have impacted performance in April, while we are confident in our ability to resolve those issues. We expect them to negatively impact our second quarter results and explain why our second quarter guidance represents a setback in our business versus the first quarter. We expect consolidated revenue as a percentage of gross billing to stay within the range we have reported over the last five quarters.

Jiri Ponrt: As Sean commented in his script, our thoughtful is facing several technical issues, which has impacted performance in April.

Jiri Ponrt: While we are confident in our ability to resolve those issues.

Jiri Ponrt: It will negatively impact our second quarter results.

Jiri Ponrt: And explains why our second corporate guidance, a presence of stepping back in our business versus the first quarter.

Jiri Ponrt: We expect consolidated revenues.

Jiri Ponrt: <unk> girls billings staying within that range you have for your reported over the last five quarters.

Jiri Ponrt: We expect revenues in the first half of 2024 to decline year over year and their revenues in the second half of 2024 grew year over year.

Jiri Ponrt: We expect revenues in the first half of 2024 to decline year over year and revenues in the second half of 2024 to grow year over year. The trajectory of the year will depend on a variety of factors, including the delivery of certain projects, such as our new consumer fund. We continue to explore potential changes in the bid-out payment method. Now that our growing concern issue is behind us, it's possible that we will rebalance some of the checkout options which we deprioritized last year.

Jiri Ponrt: The tragic story of the year will depend on our very very little sectors, including the delivery of certain projects such as our new consumer for instance.

Jiri Ponrt: We continue to explore potential changes or payment methods.

Jiri Ponrt: Now that are going concern issue is behind us it's full symbol <unk> from opens a checkout options did you mean for Erith is last year.

Jiri Ponrt: Overall.

Jiri Ponrt: [inaudible] I am pleased with our financial results in the first quarter. While progress in transformation is not always a straight path, I am confident that our transformation plan focused on driving profitable top-line growth can generate attractive returns for our shareholders.

Jiri Ponrt: I am pleased with our financial results in the first quarter.

Jiri Ponrt: While our progress in transformation is not always the spray pumps.

Jiri Ponrt: I am confident that our transformation plan focused on driving profitable top line growth and generate attractive returns for our shareholders.

Jiri Ponrt: The longer term.

Speaker Change: I would like to open the call up for your questions operator.

Speaker Change: Thank you.

Operator: And we will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 a second time. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, it is Star 1 to join the queue, and your first question comes from the line of Sean McGowan with Roth M K M. Your line is open.

Speaker Change: And we will now begin the question and answer session.

Sean Patrick McGowan: If you have dialed in and we would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined Mchugh.

Sean Patrick McGowan: If you would like to withdraw your question simply press Star one a second time.

Sean Patrick McGowan: If you are called upon to ask your question and our listening via Speakerphone on your device. Please pickup your handset and ensure that your phone is not on mute when asking your question.

Sean Patrick McGowan: Again, it is star one to join the queue.

Sean Patrick McGowan: And your first question comes from the line of Sean Mcgowan with Ralph M. K M. Your line is open.

Sean Patrick McGowan: Thank you thanks guys.

Sean Patrick McGowan: Thank you. Thanks, guys.

Sean Patrick McGowan: A couple of questions can you give us some sense of progress that you've made on a couple of initiatives that you've talked about in the past specifically.

Sean Patrick McGowan: A couple of questions. Can you give us some sense of progress that you've made on a couple of initiatives that you've talked about in the past, specifically increasing the frequency of Groupons as a gift? And I think more generally, then, you know, the process of making the platform more merchant-friendly. I think that may be part of what you're touching on in some of these technical glitches you've had. But, you know, taking a step back and saying, what kinds of progress are you making towards realizing those two goals?

Sean Patrick McGowan: Increasing the frequency.

Sean Patrick McGowan: <unk> as a gift.

Sean Patrick McGowan: And I think more generally then the process of making the platform more merchant friendly I think that may be part of what you're touching on some of these technical glitches you've had but.

Sean Patrick McGowan: Taking a step back and say what kinds of progress youre, making towards realizing this those two goals.

Sean Patrick McGowan: Okay. Thank you Sean for the question.

Dusan Senkypl: OK, thank you, Sean, for the question. Let me start with the latter part.

Speaker Change: Let me start with the later part I was mentioning in my script that the U S.

Dusan Senkypl: I was mentioning in my script that we released a feature for our merchants with dashboards where they can clearly see the impact of our promotional activities. This was something merchants had been asking for for several years. And what it provides is that you can clearly see how big an additional volume of sales you can get if you provide additional discounts. So our merchants in the past were kind of blind from this perspective. And it has an additional impact on them that they know that if they continue with additional promotions, they can sell more and have better visibility.

Dusan Senkypl: Feature for our merchants desktop works on a very kind of clearly see the impact of our promotional activities at <unk>.

Dusan Senkypl: Some think merchants are asking for for several years.

Dusan Senkypl: And what it provides is that you.

Dusan Senkypl: You can clearly see how.

Dusan Senkypl: How big additional volume of sales you can get if you'll provide additional discounts from our merchants and the possible kind of Brian <unk> from this perspective and it.

Dusan Senkypl: Has some may have additional impacts on vendors.

Dusan Senkypl: No that is very continue with additional promotions they can sell more and better visibility. So this is one example.

Dusan Senkypl: So this is one example of what we are doing in terms of improving the merchant experience. And now, every quarter, every month, we will be adding more and more features to this functionality so that it's much easier to manage a campaign on Groupon and achieve the goals which every specific merchant has.

Dusan Senkypl: What we are doing in Panama.

Dusan Senkypl: Improving merchant experience and now every quarter every month, we will be adding more and more features to.

Dusan Senkypl: So this functionality.

Dusan Senkypl: It's much easier to manage a campaign on groupon it achieved the goals, which every specific merchants.

Dusan Senkypl: In terms of gifting, I don't have any additional specific information about what I was talking about in the last earnings. In the last earnings, we covered Valentine's Day, where we saw great results. We have Mother's Day ahead of us now, but really, the biggest main season for gifting is Q4. So our key focus is to make sure that both products and also the offerings, meaning the deals which we have for gifting, will be much, much better for the Q4 season, and then maybe the other initiatives which we are focusing on is the regionalization, which is an important part of it, and we also see very, very positive progress with no specific numbers which I would be able to report.

Dusan Senkypl: In terms of.

Dusan Senkypl: <unk> think I don't have any other channel specific information about I'm talking.

Dusan Senkypl: Talking about the lost earnings.

Dusan Senkypl: Earnings covered the Valentine's day.

Dusan Senkypl: Great resolve VF mothers' day.

Dusan Senkypl: Ill.

Dusan Senkypl: But really the biggest maintenance season for Q4, so our key focus is to make sure that both products and also the offerings meaning.

Dusan Senkypl: <unk> will be much much better for Q4 Q4 season.

Speaker Change: Okay, and then maybe if you have any.

Dusan Senkypl: <unk>, which we are focusing on.

Dusan Senkypl: Is there any generalization or it's just important parts of it. We also see very very positive progress of no specific numbers, which I would be able to report right now.

Dusan Senkypl: Thank you, and if I can ask another one dramatic disparity between the performance of North America travel and international travel. You know, I don't think the economic profiles would fully explain that disparity. Can you talk about what would explain the disparity between these two markets?

Speaker Change: Okay. Thank you.

Speaker Change: I can ask another one.

Dusan Senkypl: Dramatic disparity between the performance of North America travel and international travel.

Dusan Senkypl: I think the economic profiles are would explain fully that disparity could you talk about what would explain the disparity between those two markets.

Dusan Senkypl: Between North America and international.

Dusan Senkypl: between North America and international, and Travel, yes. OK. We have better connectivity in North America, which makes it much easier to plug in some of our partners compared to international. Some features which are available in the NA market are simply not yet available in international markets. However, I mentioned that we implemented SiteMinder, and that platform, for example, will be implemented or is implemented and is live now both in the NA and international markets. So it will allow us to put more inventory on international markets and improve the performance of travel on international markets also.

Dusan Senkypl: And travel yes.

Dusan Senkypl: Okay.

Dusan Senkypl: We have.

Dusan Senkypl: Better connectivity.

Dusan Senkypl: America.

Dusan Senkypl: Which which makes it much easier to plug a plug in some other our partners compared to international some features which are available on our main market are simply not yet available in international.

Dusan Senkypl: However, I mentioned that we implemented and that platform. For example, there'll be implemented are implemented in life now.

Dusan Senkypl: And on international markets. So it will allow us to put more inventory on international markets and improve the performance.

Dusan Senkypl: Also on the international markets.

Speaker Change: Okay. Thank you I'll pass it on but get back into queue. Thank you.

Sean Patrick McGowan: Okay, thank you. I'll pass it on, but get back in the queue. Thank you.

Speaker Change: Okay. Thank you.

Speaker Change: And as a reminder, it is star one if you would like to ask a question.

Eric James Sheridan: And as a reminder, it is Star One if you would like to ask a question. And your next question comes from the line of Eric Sheridan with Goldman Sachs. Your line is open.

Eric James Sheridan: And your next question comes from the line of Eric Sheridan with Goldman Sachs. Your line is open.

Eric James Sheridan: Thanks so much for taking the question. Maybe a big picture one or two if I could.

Eric James Sheridan: Thanks, so much for taking the question, maybe a big picture, one or two if I could one in terms of incremental investments on driving platform growth. How would you characterize the opportunity to either be driven by user growth or existing shopper growth and driving more utility or frequency among shoppers on the platform, which she.

Eric James Sheridan: One, in terms of incremental investments in driving platform growth, how would you characterize the opportunity to either be driven by user growth or existing shopper growth and driving more utility or frequency among shoppers on the platform? Which do you think you see as the more fertile ground for return on investment over the next six to 12 months? The second question would be, as you get further along in running the business, what do you see as some of the competitive advantages but also some of the challenges facing the company when you think about the competitive landscape for local services and local goods? Thanks so much.

Eric James Sheridan: Yes.

Eric James Sheridan: You see as the more fertile ground for return on investment over the next six to 12 months and the second question would be.

Eric James Sheridan: As you get further along in running the business what do you see as some of the competitive advantages, but also some of the challenges facing the company. When you think about the competitive landscape for local services in local goods. Thanks, so much.

Speaker Change: Great. Thanks.

Dusan Senkypl: Hey, thanks, Eric, for the question. In terms of growth and supply, we don't need to grow supply in terms of the number of merchants. Actually, I expect that we will go down, and we are in the process of removing low-quality merchants. What we need to do is grow the number of quality merchants and have the right structure of deals with them so that the deals make sense for both consumers and for merchants. And this is part of our market manager and sales regionalization activity. But I still see Groupon primarily as a supply-driven marketplace.

Speaker Change: Thanks, Eric for the question in terms of growth in supply.

Dusan Senkypl: We don't need to grow supply in terms of the number of <unk> charms.

Dusan Senkypl: Actually I expected vivo will go down and we are in the process of removing low quality merchants will do we need to do is grow number of components in our chumps on behalf of the REIT structure of deals of inbound deals make sense for both for consumers.

Dusan Senkypl: Our merchants and this is part of our market manager and sales city generalization, Okay, I still see groupon, primarily supply driven marketplace.

Dusan Senkypl: So this is our main focus in terms of growing the marketplace. But obviously, hand in hand, we should be coming up with a product which is easier to use, improve the bookability among our deals, and make our changes in marketing. To increase user frequency, I actually believe that we will need to grow some categories which drive frequency, like food and drink and similar categories. And here it goes back to improvements in terms of how we are doing sales. We need to really do the work.

Dusan Senkypl: Our main focus in terms of growing the marketplace, obviously hand in hand, we should be coming this productivity just easier to use improved stability.

Dusan Senkypl: Among among our deals and do our changes in marketing.

Dusan Senkypl: <unk> increase.

Dusan Senkypl: The user frequency I actually believe that visual needs to grow.

Dusan Senkypl: Some categories, which drive frequency like <unk>.

Dusan Senkypl: <unk> income similar categories and here it goes back to improvements in terms of how we are doing the sales do you need to really do the.

Dusan Senkypl: Well defined ultimate goal for every deal we've done merchant because to give you. An example for some deals when you go to the restaurant and do you have some up sells like additional <unk>.

Dusan Senkypl: Define the ultimate goal for every deal with the merchant because, To give you an example, for some deals, when you go to the restaurant and you have some upsells like additional drinks or wine, our current take rate when you take into account additional revenue is actually pretty low, and vice versa. There are deals where upsell is not expected, and in that case, our take rate should actually be more comparable with Uber Eats and similar. So in order to move ahead in this area, we need to do some product improvements and prepare our salespeople to be able to work in this more consultative type of sale.

Dusan Senkypl: Our current take rate when you take into account additional revenue is actually pretty low and vice versa, but all deals better upsell is not expected.

Dusan Senkypl: Actually our take rates should be more comparable if you breach and similar so so in order to move.

Dusan Senkypl: Just add abbvie needs to do some product improvements in our sales to be.

Dusan Senkypl: And just more like consultative type of a sale.

Dusan Senkypl: And in terms of our competitive advantages.

Dusan Senkypl: And in terms of competitive advantages and challenges, [inaudible] Personally, I see Groupon as the best platform to start and grow a business. And yes, we have competitors; you can even take Google and Facebook, and they're sponsored. Sponsored Products, AdWords, SSA Competition, but Groupon is really performance-based, meaning that merchants are paying Groupon only if we deliver deals to customers. I think it's a big advantage. We cover pretty much all verticals. We have some other vertical marketplaces as competitors, but no one is doing the whole scale. And I see this combination of this performance approach as a great advantage, and Groupon as a great partner for local businesses.

Dusan Senkypl: Challenges.

Dusan Senkypl:

Dusan Senkypl: I see personally Groupon is the best platform to start and grow their business.

Dusan Senkypl: Yes via competitor US you can even take Google and Facebook and various sponsor.

Dusan Senkypl: Uh huh.

Dusan Senkypl: Sponsored products.

Dusan Senkypl: So as a competition, but groupon.

Dusan Senkypl: It really is performance based meaning that the merchants are paying groupon only if we deliver them to customers I think it's a big advantage, we cover pretty much all of our costs.

Dusan Senkypl: Yes some.

Dusan Senkypl: Our vertical marketplaces as a competitor.

Dusan Senkypl: No one is doing the whole scale and I see this combination of if you just performance approach.

Dusan Senkypl: Great advantage and being Groupon as a great partner with local businesses.

Speaker Change: Thank you.

Dusan Senkypl: Yeah.

Sean Patrick McGowan: And your next question comes from Sean McGowan with Roth MKM. Your line is open.

Dusan Senkypl: Your next question comes from Sean Mcgowan with Ross your.

Sean Patrick McGowan: Your line is open.

Sean Patrick McGowan: Alright, Thanks again for follow up opportunity here Im going to ask earlier on travel do you think that you talked about some of these glitches.

Sean Patrick McGowan: Thanks again for a follow-up opportunity here. I meant to ask earlier about travel. Do you think you talked about some of these glitches, you know, maybe not being worked out until the end of the second quarter? I don't know if you're talking specifically about travel, but do you think travel could get back to the Q1 level by Q3?

Sean Patrick McGowan: Maybe not being worked out until the end of the second quarter.

Sean Patrick McGowan: Well I don't know if you're talking specifically about travel, but do you think travel could get back to the Q1 level by Q3.

Sean Patrick McGowan: Okay.

Dusan Senkypl: Yes, I think we have a decent chance to get to signal a roster. And did you mention either on this call, I don't think you did, or in a...

Speaker Change: Yes, I think.

Dusan Senkypl: Decent chance to get to say, Colorado.

Dusan Senkypl: Okay. That's helpful and did you mention either on this call I don't think you did or in our filings how much you got for the sale of those intangibles.

Sean Patrick McGowan: Okay, that's helpful. And did you mention on this call, I don't think you did, or in a filing how much you got for the sale of those intangibles?

Sean Patrick McGowan: No.

Sean Patrick McGowan: Well there is a.

Sean Patrick McGowan: Confidential at the Bogies deal and everything but what.

Sean Patrick McGowan: What about this deal is so cool.

Sean Patrick McGowan: And note two of our earnings.

Dusan Senkypl: of our earnings disclosure, and we are sorry, but we cannot disclose names.

Dusan Senkypl: Earnings disclosure.

Dusan Senkypl: Sorry.

Dusan Senkypl: Okay.

Dusan Senkypl: Okay, but when you when you mentioned in the prepared remarks about the $90 million.

Sean Patrick McGowan: But when you mentioned in the prepared remarks about the 90 million, that does not include what you already have, right? No, yes, correct. This is what we still have, and what we believe we can get from other non-core assets, primarily DiffCloud and some of the remaining stakes. Thank you very much.

Sean Patrick McGowan: That does not include what you're already got right. No. Yes, correct. This is would be still that would we believe we can get from other noncore assets.

Sean Patrick McGowan: I'm really difficult.

Sean Patrick McGowan: And some of them are remaining stake.

Sean Patrick McGowan: Alright.

Speaker Change: Great. Thank you very much I appreciate it.

Sean Patrick McGowan: Okay.

Operator: And there are no further questions at this time. This will conclude today's call. We thank you so much for your participation, and you may now disconnect.

Speaker Change: And there are no further questions at this time.

Operator: And.

Operator: This will conclude today's call. We thank you so much for your participation and you may now disconnect.

Operator: Yeah.

Operator: Yeah.

Operator: Yeah.

Operator: Yeah.

Operator: Yeah.

Operator: Yeah.

Operator: Yeah.

Operator: Yeah.

Operator: Yeah.

Operator: Yeah.