Q4 2024 Groupon Inc Earnings Call
Unknown Executive: Hello, and welcome to Groupon's fourth quarter 2024 financial results conference call.
Hello, and welcome to <unk> fourth quarter 2024 financial results conference call on.
Unknown Executive: On the call today, our Chief Executive Officer, Dusan Senkypl, Chief Financial Officer, Jiri Ponrt, and Senior Vice President of Corporate Development and Investor Relations, Rana Kashyap. At this time, all participants are in a listen-only mode.
Speaker Change: On the call today are Chief Executive Officer, Sean Thankful, Chief Financial Officer, usually cost as senior Vice President of corporate development and Investor Relations Ron at the shop.
At this time all participants are in a listen only mode today's.
Unknown Executive: Today's call will be a question and answer session only.
Speaker Change: Today's call will be a question and answer session only the company has posted earnings materials, including earnings commentary and earnings slides on the company's Investor Relations website at Investor <unk> Com Today's conference call is being recorded.
Unknown Executive: The company has posted earnings material including earnings commentary and earnings slides on the company's investor relations website at investor.groupon.com. Today's conference call is being recorded.
Unknown Executive: 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, March 12, 2025 only, and will include forward looking statements. Actual results may differ materially from those expressed or implied in the company's forward-looking statement. Groupon undertakes no obligation to update these forward looking statements as a result of new information or future events.
Speaker Change: Before we begin group I would like to remind listeners that the following discussion and responses to your questions reflect management's views as of today March 12, 2025, only and will include forward looking statements.
Speaker Change: <unk> results may differ materially from those expressed or implied in the companys forward looking statements Groupon.
Speaker Change: <unk> undertakes no obligation to update these forward looking statements as a result of new information or future events.
Unknown Executive: Additional information about risks and other factors that could potentially impact the company's financial results are included in its earnings press release and its filings with the SEC, including its annual report on Form 10-K. 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 and furnishes with the SEC, corporate governance information, and select press releases and social media posts.
Speaker Change: Additional 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 annual report on Form 10-K.
Speaker Change: We encourage investors to use groupon to Investor Relations website at Investor Groupon Dot com as a way of easily finding information about the company.
Speaker Change: By promptly makes available on this website the reports that the company files and furnishes with the SEC corporate governance information and select press releases and social media postings.
Unknown Executive: 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 their filings 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 US GAAP.
Speaker Change: On the call today. The company will also discuss the following non-GAAP financial measures adjusted EBITDA and free cash flow.
Speaker Change: In <unk> press release in their filings 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.
Dusan Senkypl: And with that, I'd like to turn it over to Dusan to make a few opening remarks before we jump into Q&A. Hello, and thanks for joining us for our fourth quarter and full year 2024 earnings call. It's a pleasure to be the follow Yesterday, after the market close, we released our earnings and posted our earnings commentary and updated slides on our investor relationships website. In addition, I encourage you to review our press release and 10-K, which contain more detail on our fourth quarter and full year results.
Speaker Change: And with that I'd like to turn it over to do Sean to make a few opening remarks before we jump into Q&A.
Do Sean: Hello, and thanks for joining us for our fourth quarter and full year 2024 earnings call.
Speaker Change: Pleasure to be the following.
Speaker Change: Yesterday after the market close we released our earnings and posted our earnings commentary and updated slides on our investor relationships at the site.
In addition, I encourage you to review our press release, and 10-K, which contain more details on our fourth quarter and full year results.
Dusan Senkypl: Today, my plan is to make brief opening remarks, and then open up the call for questions, both live from our analysts and several that were pre-submitted in advance.
Speaker Change: Today My plan is to make brief opening remarks, and then open up the call for questions. Both live from our analysis. There's several that were pre submitted in advance.
Dusan Senkypl: I'm pleased to share that 2024 was a pivotal year in Groupon's transformation journey. And we are entering 2025 with significant momentum. Groupon today is fundamentally different than it was two years ago when I joined the CEO. While our core mission remains unchanged to be the trusted destination for discovering high quality local experiences at unbeatable value, how we deliver on this mission has evolved significantly.
Speaker Change: I am pleased to share that 2000 incentive bar mills that fuels our yard in coupons transformation journey.
Speaker Change: And we are entering 2025 with significant momentum.
Speaker Change: Groupon today is fundamentally different than it was two years ago, when I joined as CEO.
Speaker Change: While our core mission remains unchanged to be the trusted destination for discovering high quality local experiences at unbeatable value how we deliver on this mission has evolved significantly.
Dusan Senkypl: Our transformation is delivering results across three key areas. First in Marketplace Health. We have shifted from chasing volume to building quality, evidenced by North America locals positive 8% billing growth in Q4 after declining 19% in 2022. This improvement stems directly from our focus on curated experiences and strategic merchant partnerships.
Speaker Change: Our transformation is delivering results across three key areas.
Speaker Change: First in marketplace.
Speaker Change: We have shifted from chasing volume to building quality evidenced by North America was positive 8% billings growth in Q4 after declining 19% in 2022 this.
Speaker Change: This improvement stems directly from our copious on curated experiences and strategic merchant partnerships.
Dusan Senkypl: Second, in our platform modernization. We've completed major migrations including our private cloud detection platform, North America cloud infrastructure, new website, and ERP system. These aren't just technical upgrades, they are strategic investments that enable us to innovate faster and create more engaging experiences.
Speaker Change: Circa.
Speaker Change: And our platform modernization.
Speaker Change: We've completed major migrations, including our prices proud of fixture puffed form North America, both infrastructure, new websites and ERP system.
Speaker Change: These unjust technical upgrades were strategic investments that enable us to innovate faster and create more engaging experiences.
Dusan Senkypl: First, in our financial strength. We generated $69 million in adjusted EBITDA and $41 million in free cash flow for the school year. Our first positive free cash flow since exiting the pandemic. This improvement flows directly from our more efficient operations and healthier marketplace dynamics.
Speaker Change: First in our financial strength.
Speaker Change: We generated 69 million and adjusted EBITDA and four develop Milan and free cash flow for the full year.
Speaker Change: Our first positive free cash flow since exiting the pandemic.
Speaker Change: This improvement prostatic lift from our more efficient operations and health care marketplace dynamics.
Dusan Senkypl: For Q4 specifically, after a challenging Q3 impacted by technical migrations, we rebounded strongly. We are seeing encouraging signs across the business. North America local return next to 8% billing growth International local excluding Italy grew billions by 2% with positive momentum in all four major markets. So double-digit growth in key verticals, including things to do, enterprise brands, and gifting and seasonal operations.
Speaker Change: For Q4, specifically after a challenging Q3 impacted by technical migrations via rebounded strongly.
Speaker Change: We are seeing encouraging signs across the business.
Speaker Change: North America Walker Thermits, two 8% of billings grow.
Speaker Change: International local excluding Italy grew billings by 2%.
Speaker Change: Positive momentum in all four major markets.
Speaker Change: We saw double digit growth in key verticals, including things through enterprise brands and gifting and seasonal premise.
Dusan Senkypl: Looking ahead to 2025, we are confident this will be the year we return Groupon to sustain growth. Our 2025 strategy focuses on winning in key markets through our proven city by city approach. Prioritizing high impact categories like things to do, beauty and wellness, and gifting. Enhancing customer retention through improved personalization. Boosting merchant success with enhanced tools. and completing our remaining technical migration including our North America mobile app in Q2.
Speaker Change: Looking ahead to 2035.
Speaker Change: We are confident this will be the euro V Arthur Groupon for sustained growth.
Speaker Change: Our 2025 strategy focuses on winning in key markets through our proven city by city approach.
Speaker Change: Prioritizing high impact categories like speaks to do beauty and wellness and gifting.
Speaker Change: And the other thing customer retention through improved personalization.
Speaker Change: Boosting merchant such says it in house tools.
Speaker Change: And completing all remaining technical marketing.
Speaker Change: Our North American mobile App in Q2.
Dusan Senkypl: With a much better cash position of $229 million versus the previous year and a clear roadmap for growth, we are well positioned to create value for all stakeholders as we execute the next chapter in Groupon's transformation.
Speaker Change: With a much better cash position of 299 million versus the previous year and a clear road map for growth, we are well positioned to create value for all stakeholders as we execute the next chapter in <unk> transformation.
Dusan Senkypl: I want to thank the Groupon team for their resilience and commitment, which has been instrumental in our program.
Speaker Change: I want to thank the coupon theme for their resilience and commitment which have been instrumental in our progress.
Dusan Senkypl: With that, let's open the call for questions. Thanks, Dusan.
With that let's open the call for questions.
Sean: Thanks, Steve Shawn.
Sean McGowan: Our first question comes from Sean McGowan from Roth Capital. Sean, you can now unmute. Thank you, appreciate that. Yeah, can you talk a little bit about the what you think was driving that local growth in the US? It seemed like it really turned around. I mean, I think when you gave us an update on the third quarter conference call, it was running down, you know, through October. So what do you think drove that turnaround in the late part of the quarter? Yeah, so thanks. Thanks for the question. We had a lot of headwinds during last year with technical migrations and platform projects, which were impacting our ability to deliver.
Sean McGowan: Our first question comes from Sean Mcgowan from Roth capital.
John: John you can now on mute.
John: Thank you I appreciate that.
Speaker Change: Yeah can you talk a little bit about the what you think was driving that local growth in the U S. It seem like.
Speaker Change: It really turned around I mean, I think when you gave us an update on the third quarter conference call was running down.
Speaker Change: Through October so what do you think drove that turnaround in the late part of the quarter.
Speaker Change: Yeah. So thanks for the question.
Speaker Change: Yes, a lot of headroom saw during class Terre Haute before technical migrations and popcorn projects, which are impacting our ability to deliver so it was definitely one of the drivers and as a veeva either finalizing them or mitigating impact all of our.
Dusan Senkypl: So it was definitely one of the drivers. And as we were either finalizing them or mitigating impact, our platform returned to, let's say, the performance which we are expecting from it.
Speaker Change: Our platform return to let's say the performance of each of you are expanding expecting from it but at the same time during the last several earnings calls I was talking about our strategy shift shifting to curated marketplace that boat sales.
Dusan Senkypl: But at the same time, during the last earnings calls, I was talking about our strategy shift, shifting to a curated marketplace with a sales organization focusing on quality. And we don't go for quantity, but we really look at what we need on our platform. We are also spending much more time with our merchants to make sure that they have deals which perform. So I would say that this is a combination of all these elements, which finally all fits together and they work and they are reflected in the results, especially in the later part. Thank you.
Speaker Change: Organization, focusing on quality and then we can go by the poor quantity, but the beauty of your level what would be your needs on our platform.
Speaker Change: We are also spending much more time with our merchants to make sure that.
Speaker Change: They have deals which have each per farm so.
Speaker Change: I would say that this is a combination of all of these elements, which finally, all fits together and vapor and biotic afflicted and the results are especially in the later part of people.
Dusan Senkypl: Can I ask if you were able to recover any of the lost cohort, you know, that cohort that fell off the more loyal customers, were you able to get any of those guys back? It's highly related to overall platform stability, which significantly improved. We saw improvement in this cohort, but overall, I would say that the team did a great job really on focusing on what's wrong, on what are the issues with every individual customer which we have. And it reflected in better results, not only from this cohort, but overall on the platform through higher convergence.
Speaker Change: Can I ask if you were able to recover any of the last cohort that cohort that fell off a little more loyal customers, who were able to get any of those guys back.
Speaker Change: It's it's highly related to overall platform, our stability, which significantly improves.
Speaker Change: We saw improvement.
Speaker Change: In that cohort, but overall I would say that the team did a great job really on or focusing on was the wrong on books with other issues with evident individual customer, which would you be half.
Speaker Change: And it's reflected in better results not only from this cohort, but overall on the box form Froufrou Hydrophone northern's, great. Thank you very much.
Sean McGowan: Thank you very much.
Speaker Change: Okay.
Bobby Brooks: Our next question will come from Bobby Brooks from Northwind Capital. Bobby, you can now unmute your line. Hey, good morning, guys. Thank you for taking my question. So I wanted to ask on the top in the slide deck and mentioned that the top five metro areas in North America saw double digit growth in the fourth quarter. Could you just discuss what drove that strength? And was this, and probably more so, was this a result of your team specifically targeting those, those top five metros first?
Bobby Brooks: Our next question will come from Bobby Brooks from Northland Capital Bobby you can now on mute your line.
Bobby Brooks: Hey, good morning, guys. Thank you for taking my question.
Bobby Brooks: So I wanted to ask on the top in the slide deck, you had mentioned that the top five metro areas in North America saw a double digit growth in the fourth quarter could you just discuss what drove that strength and was this and probably more so was this a result of your teams specifically targeting those those.
Bobby Brooks: Top five natural first and and if so then is this something that you think you can learn rollout in Brentwood that strategy something that you could rollout and replicate to other metros.
Dusan Senkypl: And, and if so, then is this something that you think you can then roll out and replicate that, you know, strategy, something that you can roll out and replicate to other metros? Thanks, Bobby, for the question.
Louise: Thanks Louise for the question.
Dusan Senkypl: Actually, we were also talking about international and Spain as a first sign of the result of a strategy shift, which we did some two years ago as a pilot. And actually, in Spain, we have some areas and some metros, which are actually hitting 2019 numbers. And during the last 18 months, let's say, we started implementing similar measures also in NA, specifically, I was discussing on previous call explaining that we are building this market management capability Yeah, so it's something where yeah, those top five metros were targeted first and going and you're still working on figuring out what the optimist or how to optimize it best.
Louise: Akshay Veeva also talking about international in Spain is the first sign of the resolve of our strategy shift we debuted at some two years ago as a firewall that actually.
Louise: In Spain, we have some AD asking some metros, which actually we think 2019 numbers.
Louise: And during class 18 months lets say, we started implementing similar measures also in M&A, specifically I was discussing on previous call explaining that we are building this market management capability within group all of it just focusing first on the on the largest metros, where we are before.
Louise: <unk> will be needs with other deals which would be on the platform and actually also on deals it should not be on the platform. So this is the reflection of the of this strategy. We are still in the middle of elevated there is plenty of work ahead of us but the goal is that the bonds saw disbro says the structure will be.
Louise: Optimized for Takuma across in a in a navy will be scaling to our locations.
Speaker Change: Got it so it's something we're yeah, those top five metros, where targeted first and going and you're still working on figuring out what the optimists are out how to optimize the best but it's it's something that you haven't yet rolled out to all different metros.
Dusan Senkypl: But it's, it's something that you haven't yet rolled out to all different metros. Yeah, we are still learning the right way how to do it. It's a combination of market management where we are understanding the market dynamics, the specific parameters and behavior of each location. And then there's also the category dimension to it where we are digging much deeper and understanding what our category needs because Groupon is not one place fits all, but we are developing a strategy for each key vertical which we have on the platform. So it's this combination category in one dimension and NGO as a second.
Speaker Change: The Austin still learning the right way, how how to do it it's a combination of our market management, where b b.
Speaker Change: Understanding the market dynamics, the specific parameters and behavior of each location and then various also the category dimension to it where the b are digging much deeper in understanding without category needs. Because groupon is not one place fits all but we are developing a strategy for each shirt key.
Speaker Change: Vertical which we have on the platform also took this combination of cosmetic category in one dimension and N. G O S. A circa in advance so we do feel comfortable that with the scale Burke for all says with Zika have everybody, we will be rolling that out to more locations.
Dusan Senkypl: And once we will feel comfortable that this is a scalable process which we can have everywhere, we will be rolling that out to tomorrow. Got it.
Speaker Change: Got it and then so north American active customers that grew sequentially. After I need my I have my data back to go back to 2018 and errors all sequential declines on active customers in North America. So that was really great to see and so kind of two questions on that as one does your guide bake in.
Dusan Senkypl: And then so North American active customers that grew sequentially after I mean, I have my data back going back to 2018. And there was all sequential declines on active customers in North America. So that was really great to see.
Dusan Senkypl: And so kind of two questions on that is one, does your guide bake in any continued customer growth? And could you maybe just touch on what you felt drove that? I know you talked about better conversion. If you could just share any more details on that, that'd be appreciated.
Speaker Change: Any continued customer growth and could you maybe just touch on what you felt drove that I know you talked about better conversion. If you could just share any more details on that that'd be appreciated.
Dusan Senkypl: Yeah, so I will go back again to platform stability, because it was a big topic for us last year. And really in Q4, when like all these pieces fit together, we saw performance marketing channels to be really stepping up and improving and they are really driving the acquisition part, which in my opinion, we still have the potential to do more, we have a plan, we improve and strengthen the team in marketing department. And we know that we can grow further. But at the same time, we are shifting our focus right now on customer retention, where we are bringing some especially food and drink deals, which we call WOW deals, which can help us to improve the frequency because I believe we cracked the customer acquisition.
Speaker Change: Yeah. So I will go back again, two platforms publicly because it was a big topic for us last year and really in Q4 then.
Speaker Change: All of these species could fit to work well together.
Speaker Change: We saw better performance marketing channels to be really stepping up and improving and evaluate driving the acquisition path, which in my opinion, but we still have the potential to do more we have a plan to be improved and strengthened the team in marketing departments are and we know that we can grow.
Speaker Change: Over but at the same time, we are shifting our focus right now on our customer retention where are the operators getting some especially put entering deals, which we called Wildwood deals, which can help us to improve the frequency because I believed to be corrected our customer acquisition and now opioids as customer attention second per port transaction.
Dusan Senkypl: And now focus is customer retention, second, third, fourth and fifth. Got it. And then just kind of convert.
Speaker Change: Yeah.
Speaker Change: Got it and then just kind of confirm so does the guide.
Dusan Senkypl: So does a guide, does your guide bake in content, like any customer growth? Or is that not really fun? Our plan. expect that that we will be doing better and better with customer acquisition. We don't expect that it will be like several times better, obviously, but but we will be improving. And we expect in the in the plan, slight improvement in retention. Got it. I appreciate it. I'll return back to the queue. Thanks, guys, and congrats on the good quarter.
Speaker Change: Does your guide begin content like any customer growth or is that not really a function of it.
Speaker Change: Yes.
Speaker Change: Our plan.
Speaker Change: Expect that oh that vivo be doing better and better with customer acquisition.
Speaker Change: We don't expect that it will be like several times metrobus labor, but we will be improving and we expect India into planned slight improvement in intervention.
Speaker Change: Got it I appreciate it all I would turn back to the queue. Thanks, guys and congrats on the good quarter.
Speaker Change: Okay.
Eric Sheridan: Our next question comes from Eric Sheridan from Goldman Sachs. Eric, you can now unmute your line.
Speaker Change: Our next question comes from Eric Sheridan from Goldman Sachs. Eric You can now on mute your line.
Eric Sheridan: Thanks so much for taking the questions, maybe two if I could, just coming back to the point on purchase frequency, can you go a little bit deeper in what you see as the critical investments to drive more purchase frequency and what you might be seeing in terms of different behavior in terms of purchase frequency when you line it on top of vertical based behavior on the platform to what resonates and what might be some of the key unlocks to drive increased frequency? And then the second question would just be, you talked a lot about how enterprises increasingly are using Groupon as a platform to go to market.
Speaker Change: Thanks, so much for taking the question maybe two if I could just coming back to the point on purchase frequency could you go a little bit deeper in what you see is the critical investments to drive more purchase frequency and and what you might be seeing in terms of different behavior in terms of purchase frequency when you lie that on tap a vertical.
Speaker Change: Based behavior on the platform to what resonates in the end and what might be some of the key unlocks to drive increased frequency and then the second question would just be you talked a lot about how enterprises increasingly are using groupon as a platform to go to market can you maybe give a few examples about enterprises as a strategy.
Eric Sheridan: Can you maybe give a few examples about enterprises as a strategy continues to evolve and what that might do to broaden out supply on the platform over the longer term? Thanks so much.
Speaker Change: It continues to evolve and what that might do to broaden out our supply on the platform over the longer term. Thanks, so much.
Dusan Senkypl: Okay, thank you, Eric, for the question. So I will start with verticals. Yes, we see different behavior in different verticals on the platform. There are verticals like online retail, where customers are not buying really the local services and experiences, where it's quite open, one-off, and it will depend on our marketing performance and on our marketing systems to be typically in Google or Facebook when they are looking for some solution. And so if you are buying some stuff which is kind of commodity and it's still in Groupon, then it's very different behavior. But when we move to categories which are more local, then the behavior is different.
Speaker Change: Okay. Thank you Eric for the question.
Speaker Change: Sure.
Speaker Change: So I those positive ethical C. S V C different behavior in different verticals on the on the spot farm that are vertical slide.
Speaker Change: Online retail where our customers are not buying calculated the local services and experiences that it's quite often bundle open it will depend on our marketing performance and when our marketing systems to be typically in Google and Facebook are in Val looking for some solution. So.
Speaker Change: If you are buying some stock, which is kind of commodity and it's still in groupon than Oh, it's very dependent behavior, but when we moved to our categories, which are more local than that behavior is this brand and the V.
Dusan Senkypl: And we see a huge potential to increase purchase frequency. But we are, and we started already late Q4, is we are adding something which we call Wow Deals, which are typically food and drinks, really great offer with top brands on the market. And our main intention is to offer those ASAP after the first purchase. In the past, we quite often focused after the purchase just to deliver the voucher, then do nothing for next few days, and then come back again to customer. Right now, we are improving and shortening that period of time when we communicate with customer.
Speaker Change: We see a huge potential to increase purchase frequency.
Speaker Change: Both the VR and we started already at a late late Q Q4 is are doing is we are adding something which we call while meals, which are typically put in drinks really great offer of it toward the top brands on the market.
Speaker Change: And our main intention is to offer evolves asap after the prosper chased in the past week via Auckland accrues after the purchase just to deliver.
Speaker Change: The voucher they'll do nothing for next few days and then come back again to customer right. Now we are improving shortening that the period of time, when we communicated with customer and based on our thursby see very positive reactions from customers. So we believe that these like Oh Wow deals will be one of <unk>.
Dusan Senkypl: And based on our test, we see very positive reactions from customers. So we believe that these, what I call Wow Deals, will be one of important elements to drive purchase frequency higher.
Speaker Change: Horton elements to drive purchase frequency higher.
Speaker Change: Oh in terms of a enterprise partners like you'll see overall market that Oh, many companies audio they're looking for a pro consumer demands and some of them are all star are struggling. So groupon is a great spot for what about when you are advertising on Google and Facebook.
Dusan Senkypl: In terms of enterprise partners, like you see overall market that many companies are really looking for consumer demand and some of them are struggling. So Groupon is a great platform for them. When you are advertising on Google, on Facebook, you are typically paying for clicks. And yes, you are optimizing for performance. But Groupon is really the only, I would say, big platform where you can make campaigns which are pure performance based. So they make a lot of sense. And then if we dig into categories where typically these businesses have fixed costs or they are selling memberships, then suddenly the economics of these deals work great for them.
Speaker Change: Book.
Speaker Change: Oh, you are typically paying for clicks on the SCR optimizing poker formats, but the groupon is really the only.
Speaker Change: I would say a big part forum, where you cannot make campaigns chop fewer performance based so they make a lot of sense and then it'd be dig into categories typically be so these businesses have a fixed cost or we're selling memberships and suddenly the economics of these deals work a great program and Groupon is real.
Dusan Senkypl: And Groupon is really a top platform for them, which they really want to scale. And I would say most limitations which are there are still on the technical integration part, which is our focus, to be more open, to more accessible to these enterprises, which they have their own issues with their own, quite often, legacy platforms. And we need to be able to connect them. But in general, when I'm meeting with these partners on every meeting, I have a feeling that we can do much, much bigger business with them versus what we do right now.
Speaker Change: All at the top.
Speaker Change: <unk> com or by image, they really want to scale and I would say most limitations, which are data off sale on the technical integration bots, which is our focus to be more open to more accessible to its enterprise sales, which may have they have their own issues with their own vital for legacy platforms and we need to.
Speaker Change: Be able to correct them, but in general when I'm meeting with these partners on every meeting I had the feeling that we can do much much bigger business with vendors, what we do right now.
Dusan Senkypl: All right, we'll now pose written questions to management that came in through our investor relations press line. Our first written question is for Dusan. Can you share what the December Christmas period looked like from a growth perspective? North America Local was running in the low single digits positive during Black Friday, Cyber Monday and was likely down negative high single digits to negative low double digits in October based on your commentary at that time around guidance framing. So would this imply the business was running up positive double digits in December Christmas based on reported North American local growth of plus 8% year over year?
Speaker Change: Alright, well now pose written questions to management that came in through our Investor Relations Crestline.
Speaker Change: Our first written question as for Duchamp.
Speaker Change: Can you share with the December Christmas period looked like from a growth perspective, North America local was running in the low single digits positive during black Friday, cyber Monday, and was likely down negative high single digits to negative low double digits in October based on your commentary at that time around guidance framing cell would this imply the business.
Speaker Change: Running up positive double digits in December Christmas based on reported in North American local growth of plus 8% year over year.
Speaker Change: Okay.
Dusan Senkypl: So December was very good. However, what we have to take into account is that year over year compare was impacted by timing of Black Friday and Cyber Monday. So it's not really apples to apples.
Speaker Change: So December of <unk>.
Speaker Change: Very good however, what we have to take into account is that the year over year comparison impacted by timing of Black Friday, and cyber Monday, So it's not really apples to apples.
Dusan Senkypl: But even said that on a life-for-life basis, comparing holiday 2024 to holiday 2023, we believe we had a very successful year in NA local, including some great numbers in the lead-up to Christmas and period between Christmas and New Year. And what's important, in the past, we have mentioned that we have observed that our platform tends to perform better during the key buying seasons. And Q4 was really no exception to that. For our Q1 outlook, as mentioned in earnings commentary, we lost some of the excitement from the Q4 season as we started Q1, but we have been pleased with the momentum in North America local and see continued growth in billings.
Speaker Change: Sure.
Speaker Change: But even.
Speaker Change: So that on a like for like basis, comparing holiday 2020 for two holiday two thousands antifreeze V. Beauty. He has a very successful year and another in a local including some great numbers in the lead up to Christmas and period between Christmas and new year and what's important in deposits, we have mentioned that.
Speaker Change: We have observed that our popcorn tends to perform better during the key by seasons in Q4, both Sedalia no exception to that for our Q1 outlook as mentioned in earnings commentary, we have lost some of the excitement from the Q4 season as we started Q1, but we have been.
Speaker Change: The momentum in North America, local and see continued growth in our in billings and of Iot commented that our first quarter outlook assumes better performance in local versus Q4 at this time, we don't believe it will be double digit growth in billings.
Dusan Senkypl: And while we commented that our first quarter outlook assumes better performance in local versus Q4, at this time, we don't believe it will be double-digit growth in billings. Great.
Speaker Change: Great.
Bobby Brooks: We have a few more questions from our analysts on the call. It looks like Bobby, you had your hand up first. Hey, thanks, guys. Thanks for taking the question again. So bring bringing higher quality supply onto the platform is a strategy you've talked about a lot since Deshawn took over, and specifically on this call. So I was just interested on, on really how, how you are getting these higher quality merchants onto the Groupon platform, you know, maybe some examples of wins, but what is the typically the selling point that wins these guys over? Is it?
Speaker Change: We have a few more questions from our analysts on the call. It looks like Bobby you had your hand up first.
Bobby Brooks: Hey, Thanks, guys. Thanks for taking the question again, so break bringing higher quality supply.
Bobby Brooks: Onto the platform as a strategy you've talked about a lot since <unk> took over and specifically on this call. So I was just as you sit on I'm really how how you're getting these higher quality merchants onto the groupon platform now maybe some examples of wins, but what is that typically the selling point that wednesday's guys over.
Bobby Brooks: Or is it is it the improved tracking you can provide merchants on the deals for grass or its something different.
Dusan Senkypl: Is it the improved tracking you can provide merchants on the deals progress? Or is it something different?
Dusan Senkypl: Well, actually, it starts with us and with our sales force and the consultative approach, which we were talking about in the past. And let me let me give you one example. When we started and we were reviewing what we call deal books internally, which is like, let's say, a document which describes what deals we should be getting for the platform for massage. The most preferred massage type of deal was like with 50 percent plus discount and $40 per hour. But when we are doing the analytics, we see that really the massages which we sell most are actually something completely else.
Bobby Brooks: Well actually it started with us and with our sales force and the consultative approach, which Viva talking about in the Boston, Let me let me give you. One example, when we started and.
Bobby Brooks: Have you ever reviewing what we call deal books internally, which is like a let's say a roku Madden, which describes what deals we should be getting for the platform for massage. The most preferred the massage type of deal or a slight with 50% plus discount in polka doors per hour, but the.
Bobby Brooks: When we are doing the analytics, we see that really the massages would you sell malls akshay, it's something completely outs reactivate of around about $100. It's a couple of massage with nice merchants. So we have to convince ourselves Salesforce first that we don't go by the Dps <unk>.
Dusan Senkypl: They are quite often about $100. It's a couple of massage with nice merchants. So we have to convince our sales force first that we don't go by the deepest discount. We go for something which is a value for customers because Groupon is always the place where we will not be selling the most expensive stuff. We will be selling high quality stuff, which will be a good deal for customers. So now we don't go to the lowest quality merchants. We go to good quality and high quality merchants. We don't go there with like $40 per hour massage, but we go there with a massage which makes them more money, which makes also more money to Groupon.
Bobby Brooks: We go for something which is a value per customer goes to groupon as always the place where we will not be selling the most expensive stock we will be selling high quality staff.
Bobby Brooks: Albeit with the deal for our core customer. So now we don't go to the lowest quality merch holds we go to good quality and high quality merchants. We don't go out of its like 40 doors per hour massage about the V go wearable massage, which makes them more money.
Bobby Brooks: <unk>, which makes also more money to groupon and actually customer slop. It love it more and it's actually combine that with our gifting strategy, which up or births works very well. These are the types of deals, which you can buy and get us a gabe because you'll see the quality immediately. So so this is the main.
Dusan Senkypl: And actually customers love it, love it more. And it's actually combined with the gifting strategy, which works very well. These are the types of deals which you can buy and give as a gift because you see the quality immediately. So this is the main strategy, really starting on our side, deciding what are the good deals which we need, identify right merchants and negotiate a deal which makes sense for merchants and Groupon.
Bobby Brooks: The strategy really starting on our side deciding what are the good deals, which would which we need identify right right merch aisles, and negotiate a deal which makes sense per merchant in group ALM.
Bobby Brooks: Awesome. That's terrific, Colin. That makes a lot of sense.
Awesome, that's best for them to call them that makes a lot of sentiment just the last one for me. So obviously you guys give a lot of value to the consumers like Youre just like you just mentioned.
Dusan Senkypl: And this is the last one for me. So obviously, you guys give a lot of value to the consumers, like you just mentioned. There's obviously, you know, some pressure on the consumers here with, you know, more macro related stuff. So I'm just curious if you could just maybe talk about high level, like, would you guys actually see like a counter, you know, kind of counter cyclical tailwinds if the consumer sees more pressure? Or I should say, would you expect that? I mean, that's kind of historically, I think, has been the case. But is that something that you think will continue to be the case going forward if we start to see pressure on the consumer?
Bobby Brooks: Theres, obviously, some pressure on the consumers here with.
Speaker Change: No more macro more macro related stuff. So I'm just curious if you could just maybe talk about high level like what you guys actually see like a powder kind of counter cyclical tailwind as the consumer sees more pressure I should say would you expect that I mean, that's kind of historically.
Speaker Change: <unk> has been the case, but is that something that you think will continue to be the case Gulfport is if we start to see pressure on the consumer.
Dusan Senkypl: If you do want to take this one. Yeah, thank you, Bobby. I think this will be headwinds and tailwinds. Definitely on, we will be the business which will be interesting for merchants in terms of having if they will have empty capacity, they will be looking for the options how they can bring the customers in and I think the Groupon is a great place. For sure, there will be also tailwinds because the people might have a little bit deeper pockets. So it might have impacted the categories like terrible or good or high value. But I believe the customers will be looking for the value and I think the Groupon is a good place.
Speaker Change: You really want to take this one.
Yeah. Thank.
Speaker Change: Thank you Bobby.
Speaker Change: This will be head to Vincent elements are definitely are on a b will be a the business which will be our.
Speaker Change: Interesting for merchants in terms of a heavy he was able to have empty capacity. They will be looking for the options. How are they can bringing the customers in and I think the groupon is great place for them.
Speaker Change: For sure there will be also televisions because of people that might have.
Speaker Change: Oh, the bit deeper pockets, so it might have impacted the categories like table of goods.
Oh, a high value, but I believe our customers will be looking for the value and I think the coupon is a good place for that.
Bobby Brooks: Really appreciate the call guys. I'll turn it back to you. Thank you. Thanks, Bobby.
Speaker Change: Really appreciate the color guys I'll turn back to the queue. Thank you.
Bobby Brooks: Thanks, Bobby will move back to Sean Mcgowan from Roth Capital Sean Please on mute your line.
Sean McGowan: We'll move back to Sean McGowan from Roth Capital. Sean, please unmute your line. Thank you. Just I was wondering, Sean, if you could give any metrics around the improvement in gifting, it seems to have been a big priority of the company. And you know, you've set some goals of improving that as a percentage of total business. So can you can you give us some sense of that progress?
Sean McGowan: Yes. Thank you.
Sean McGowan: I was wondering if you could give any metrics around the improvement in gifting. It seems to have been a big priority of the company.
Sean McGowan: Yeah, you set some goals of of improving that as a percentage of total business. So can you just give us some sense of that progress.
Dusan Senkypl: He didn't disclose any specific numbers yet, but I can share some like top-level view. I mentioned that gifting is gaining importance, and what I can share with you is that during the peak holiday season, the gifting was in double digits share of our orders, very low double digits, obviously, but it's significant improvement versus last year, we see very strong trend and strong growth there, and especially in some categories, because some categories are simply more suitable for gifting than others. It's all interconnected, it will take us time to get, and I believe in the past we were mentioning that the benchmark, which we had was 50% for holiday season, we are very far from that.
Sean McGowan: We didn't disclose any specific numbers see adds about the I can share some of my top level view I mentioned that the gifting is gaining importance and what I can share with you is that during the peak holiday season.
Sean McGowan: The gifting will soar in the double digits.
Sean McGowan: Share of our order is very low double digit obviously, but its significant improvement versus the versus last year, we see very strong brand and strong growth, there and especially in some categories because some categories have simply more suitable for gifting than others.
Sean McGowan: It's all interconnected V. It will take us time to get center I believe in the possibly go to mentioning that.
Sean McGowan: The benchmark.
<unk> had the most 60%.
Sean McGowan: For the holiday season, and we are very far from that.
Dusan Senkypl: But for that, we need to improve inventory. I was answering the previous question with like more luxurious, let's say, massage deals. We need to have enough deals like this, because these are the deals which are bought as gifts more often. I will also stress out what we mentioned several times, that Groupon is performing very well as a platform during season, and there are many seasonal occasions where gifting will be helping us, because people can be self-gifting, gifting to others. So this is all big project, which will take us time, but I see that we are on the very good path in delivering.
Sean McGowan: But for that we need to improve inventory I was answering the previous divestiture of its like the muscle.
Sean McGowan: Murat curious lets say masaccio deals we need to have in other deals like this because these are the deals which are all bolt is gets more upon Ah I would also stress out what we mentioned several times that groupon is performing very well so platform during season in that.
Sean McGowan: How many seasonal locations of our gifting will be helping us with those people can be so good thing gifting to others. So this is all big project, which will take us time, but like I see that we are under very very good pop in delivering.
Sean McGowan: Thank you. Thank you, Sean.
Sean McGowan: Great. Thank you.
Speaker Change: Thank you John we'll go back to some written questions. Another one for you to Sean can you talk about the drivers of growth within international excluding Italy, which geographies are you seeing strength. In addition to Spain running up to 2019 levels.
Dusan Senkypl: We'll move back to some written questions. Another one for you, Dusan. Can you talk about the drivers of growth within international excluding Italy?
Dusan Senkypl: Which geographies are you seeing strength in addition to Spain running up to 2019 levels? I was actually mentioning in previous answer that we have some cities in Spain, which are already near 2019 levels, which is extremely encouraging, we see very positive signals and trends in all our big countries, which is Spain, UK, France, and Germany, these four make approximately 80% of our international local. In Spain, as I mentioned, we started two years ago, by strengthening the sales force by focusing more on market management on really deciding what's what's needed on the platform.
Sean McGowan: Oh.
Sean McGowan: I was actually mentioning in previous answer that both we have some cities in Spain, which are over a day or.
Sean McGowan: Nearly 2019 levels, which is extremely encouraging we see a very positive signals and events in all our big countries, such as Spain UK, France.
Sean McGowan: In Germany, we score make.
Sean McGowan: Approximately 80% of our international logo.
Sean McGowan: And in Spain, So I mentioned that we started two years ago by strengthening the sales force.
Sean McGowan: By focusing more on market management on Rio deciding what's what's needed on the platform and we are following same steps in other countries. It size of it power stroke leadership. So are we are strengthening and rebids strengthen teams.
Dusan Senkypl: And we are following same steps in other countries, it starts with strong leadership. So we are strengthening and we did strengthen teams in every single country, which which I mentioned, we are holistically looking on performance of the country, what deals we should be bringing, but then also rebuilding the cooperation with marketing to make sure that we are promoting right stuff. And although we did not migrate both countries to new platform yet, just by by optimising supply and marketing, we were able to get them to grow and we are very optimistic going forward.
Sean McGowan: In every single country, which which I mentioned.
Sean McGowan: We are holistically looking on performance of the country book deals, we should be bringing but then also a rebuilding the cooperation with marketing to make sure that we are promoting price right staff.
Sean McGowan: And although we did not migrate both countries to new format.
Sean McGowan: Just by by Optima, optimizing supply and marketing, we were able to get them to grow and we are very optimistic going forward with that.
Sean McGowan: Yes.
Dusan Senkypl: Another written question for you, Dusan. There appears to be a lot of employee turnover, assuming this is just potentially to make sure the go to market is top notch. How are you keeping your top salespeople around? And how variable is their comp structure? Is sales productivity improving?
Sean McGowan: Another written question for you to Sean.
Speaker Change: There appears to be a lot of employee turnover. Assuming this is just potentially to make sure that go to market is top notch. How are you keeping your top salespeople around and how variable is their cost structure is sales productivity improving.
Dusan Senkypl: So I have very good feeling about strengthening our management team in sales in general. I think we are on a very, very good path there. And yes, in sales, there will be always much, much higher turnover. We pretty much went back to the original way, how Groupon, but also many other companies I was working with in the past were working. We are hiring a lot of junior people. Quite often, it's their first job or second job after college. They go through training, and some of them realize this is not for them, this type of job.
Speaker Change: So I have very good feeling about strengthening our management team and the sales subs and in general I think we are very very good path there.
Speaker Change: Sure.
Speaker Change: Yes, and in sales of Edison, there will be always a much much higher turnover, we pretty much went back to original day and how good a ball, but also many of our companies I will start working that into boss Murphy are working via hiring and lot of junior peoples device of its workers job or.
Speaker Change: Second Joe.
Speaker Change: After after colleague they go through training and some of them realize that this is not program despite of job some of them, calling laugher and become great salespeople. So services simply debate hope you ever taken but it will be high turnover and especially during the initial stage of over hiring.
Dusan Senkypl: Some of them fall in love and become great salespeople. So this is simply the way how we are working, and there will be high turnover, especially during the initial stage of hiring. And in terms of remuneration, we are highly performance motivated company and comp structure, I would say. And our top salespeople are making money which they simply deserve for what they are bringing, and I believe they are happy with the remuneration.
Speaker Change: And in terms of remuneration, we are highly performance motivated.
Speaker Change: Company and comp structure I would say are our top salespeople are making money to basically this unequivocal about bringing in I believe that it's the same inhalation system.
Dusan Senkypl: Thanks, Dushya.
Felicia: Thanks Felicia.
Jiri Ponrt: A written question for you, Yigit, what do you believe, if any, will be the impact on Groupon of recent U.S. tariffs? Yeah, as we understand the current discussions about tariff policies, they are targeted mostly to the goods or consumer products. If I look on Groupon business, most of our business is local experience, meaning local merchants, local products, and impact from tariffs is minimal. mostly where we will see some impact to our business will be good. But let's be clear, this line of business is was less than 5% of our revenues in 2024. and we do not expect the growth in 2025.
Felicia: A written question for you you Hey, what do you believe if any will be the impact on groupon of recent U S tariffs.
Felicia: Yeah, as we understand the current discussions about the tariff policies that targeted the most of that the goods or consumer products.
Felicia: If I look on a groupon business most of our business is local experienced meaningful local mayor chancer, Luca Pradaxa and impact the front <unk> is minimal.
Felicia: Mostly bad EBIT see some impact to our business will be good, but oh, let's be clear. This line of business is awards are less than 5% of our revenues in 2024.
Felicia: And we do not expect the growth in 2025, so it will be smaller and smaller part of our marketplace and therefore, I would say that impact the potential impact of our targets implications will be minimal and would not be material to our 2025.
Jiri Ponrt: So it will be smaller and smaller part of our marketplace and therefore I would say that impact or potential impact of tariff implications would be minimal and would not be material to our 2025 outcome.
Felicia: Outlook.
Jiri Ponrt: Thank you, Jiri.
Felicia: Thank you Uli we.
Sean McGowan: We have one more question, it looks like from Sean McGowan.
John: We have one more question it looks like from Sean Mcgowan John go ahead and on mute your line.
Dusan Senkypl: Sean, go ahead and unmute your line. Thanks. I want to circle back on something. I think in your prepared remarks, you talked about user engagement, you know, maybe something that could see some improvement, and yet you got the 8% increase in North American locals. So can you give us a little bit more color on that, the relationship between user engagement and that growth? So we have, in general, better conversion on the platform, which is helping us. We are also, in our comments, we mentioned that our marketing platform is really working very well, the acquisition marketing platform.
Sean McGowan: Thanks, I wanted to circle back on something I think in your prepared remarks, you talked about user engagement maybe.
Speaker Change: Maybe he says something they can see some improvement and yet you've got the 8% increase in North American local so can you give us a little bit more color on that the relationship between user engagement in that growth.
Sean McGowan: So are we.
Sean McGowan: We have in general better conversion on the platform, which is helping us via also.
Sean McGowan: In our comments, we mentioned that our marketing platform is really working very well the acquisition marketing platform. So this is this is primary source of AR.
Dusan Senkypl: So this is primary source of this growth. So we are able to approach customers in NA. But I would say internationally, it's a very similar story. We are able to present them appealing offering. We see increased conversion in the sales process, which is something we were expecting when we were talking about the new platform we are releasing. But also, just coming together with a higher quality supply, it's driving also higher and higher AOV, not only gifting, but in general, higher quality deals. Now, what needs to be coming and what's our focus is retention, meaning we need to increase the number of transactions our customers are doing.
Sean McGowan: Or does it grow so we are able to approach customers and are in M&A, but I would say international is a very similar story, we are able to present them appearing offering we see increased conversion in the in the sales process, which is something that you'd be were expecting when we were talking about the Newport firmed riad anything but the also just coming.
Together with the higher quality.
Sean McGowan: Supply.
Sean McGowan: It's driving also higher higher arob not only good thing, but in general, Ohio higher quality deals now what needs to be coming available to our Oracle cruises is certain churn, meaning we need to increase the number of transactions our customers are doing with groupon.
Dusan Senkypl: Okay, I think we've talked in the past that, you know, each incremental or each turn of user engagement adds, you know, tremendously to incremental EBITDA like 100 million for each turn or something like that. Is that still your expectation? And when do you when do you think we start to inflect to that?
Sean McGowan: Okay, I think we've talked in the past that your E.
Sean McGowan: Each incremental or each turn of user engagement adds tremendously to incremental EBITDA like 100 million for each turn or something like that.
Speaker Change: Is that still your expectation and when do you. When do you think we start to reflect to that.
Dusan Senkypl: What do you expect over the next couple of So I am not able to be exactly specific about the numbers, but like just to give you an idea, when we are talking internally about strategy 2025, the first line, the North Star for whole companies, customer and merchant retention. So as you see, it's becoming the priority number one for Groupon in general. We are already experimenting with plenty of, not only deals, but different approaches, how to tackle it. And I'm optimistic that we will be able to improve it, but we are not ready yet to share specific.
Sean McGowan: We'd expect over the next couple of years.
Sean McGowan: So.
Sean McGowan: I'm not able to be exactly specific about the numbers, but like just to give you an idea.
Sean McGowan: When we are talking internally about strategy 2000, and simplified the first line the north star for whole company's customer and merchant that attention. So as you see it becoming the priority number one for groupon.
Sean McGowan: In general the we are already experimenting with a plenty of not only deal is about the different approaches how to how to decorate and I'm optimistic that we will be able to improve it but the beyond liquidity yet to share specific numbers.
Dusan Senkypl: I expect improvements this year and then it will gradually continue in next year.
Sean McGowan: I expect improvements this year and then.
Sean McGowan: And then it will gradually continue in next years.
Dusan Senkypl: Thank you. Thank you, Sean.
Sean McGowan: Thank you.
Sean McGowan: Thank you Sean.
Jiri Ponrt: We have one more written question for Yeji. Yeji, can you comment on the trends underpinning the guide? Yes, for sure. So The trends on that is we left Q4 in a definitely better position than we entered Q4 after a very turmoil Q3. So we are continuing in Q1. We expect in Q1 still negative, slightly negative trend in billings. This is what we put there. We continue and we will see the lower take rates, it means year over year, it means that our revenues impact will be more negative versus trends of the billings. But we believe we will be, as we were last year, positive and adjusted EBITDA.
Speaker Change: We have one more written question for UGG, usually can you comment on the trends underpinning the guide.
Speaker Change: Yes for sure so.
Speaker Change: The parents are on that as a but you left the Q4 are in are definitely better position than we entered Q4 after a very.
Speaker Change: Turmoil of Q3 so.
Speaker Change: So we are continuing in Q1.
Speaker Change: We expect in Q1 are still they got its a slightly negative trend in billings. This is would be there.
Speaker Change: We continue and we still see a the Lubbock bake rates are at the Marines are the year over year. It means that our our avenues impact will be more need got they've oh vessel, so tens of the billings.
Speaker Change: But we believe it will be as either a lofty positive and adjusted EBITDA about the cash flow. This is these are things, which we have to take into account R. B.
Jiri Ponrt: About the cash flow, this is these things which we have to take into account.
Jiri Ponrt: Business is seasonal in terms of we have strong holiday season in Q4, which is redempted by our customers in Q1, which resulted naturally in negative cash flow in Q1. So this is about Q1. For full year, we actually expect that we will be growing billings. We expect there will be growing revenues. We will be adjusted EBITDA and free cash flow definitely better than we were in 2020.
Speaker Change: Business is seasonal in terms of we had strong holiday season in Q4, which is <unk> <unk> data by our by our customers in Q1, which resulted in materially negative cash flow.
Speaker Change: In our AR and Q1. So this is about Q <unk> coupon.
Speaker Change: For full year, we actually expect that we will be a growing billings be explainable would be growing revenues.
Speaker Change: B will be adjusted EBITDA and free cash flow definitely better.
Then VEBA in 2074.
Jiri Ponrt: What is probably good to mention here. And we expect some forex impact roughly 100 basis It may be good to mention that last year we left Italy, beginning of Q2, and I mean not fully a local market.
Speaker Change: What is probably good to mention here.
Speaker Change: And we expect some forex.
Speaker Change: <unk> impact grapple, a 100 basis points.
Speaker Change: It may be good to mention that the lofty would be left at Delhi.
Speaker Change: Beginning of Q2.
Speaker Change: Meaning not food.
Speaker Change: A little local market.
Jiri Ponrt: So this is all the things which we should probably mention. We also believe, and I think it was mentioned here already today, that we continue and we will continue to invest in our marketing and in our sales force. We expect that our FG&A will be flattish year over year. It might be a little bit different each quarter, but we see some pockets where we can still have savings in our FG&A. On the other hand, we are hiring. We are hiring especially to our sales force. And this is a place where we would like to take our savings, which we will deliver during the year 2025 and bring back to the business and definitely strengthen our capacities in sales.
Speaker Change: So this is all the things Beecher reshoot. The Bradley mentioned, we also believe and I think it was mentioned here or a day today.
Speaker Change: We continue and we will continue to invest in our marketing and our sales force, we expect that our G&A will be flipped dish year over year, it might be little bit different each quarter, but we see some pockets, where we can still have a savings in our SG&A on the other items.
Speaker Change: We are hiring we are hiring especially to our sales force and this is the place that looked like what we would like to take our savings that we will deliver in a during these plentiful.
Speaker Change: During the year, 2035, and bringing back to the business and the definitely it stinks in our October capacities in our sales force.
Jiri Ponrt: about about marketing, we expect and it was also said here, we expect to be stable spending roughly 30-35% of our gross profit on marketing. Assuming and being conditioned that we are positive in ROI. If we will be positive ROI, we would be able to spend even more, which will certainly will impact our out-of-point.
Speaker Change: The about the marketing be expect and it was also said here, we expect to be stable.
Speaker Change: Stable.
Speaker Change: Spending carefully circa 65% of outgrowth appropriate marketing.
Speaker Change: Assuming and Oh being condition that would be a positive in ROI. If he will be positive awry, we would be able to spend even more.
Speaker Change: It will certainly impact our one positively.
Jiri Ponrt: Thank you, Yizhi.
Eugene: Thank you Eugene.
Unknown Executive: There are no other questions.
Speaker Change: There are no other questions. This concludes our call for today. Thank you for everyone for joining for additional information. Please go to investor that Groupon Dot com.
Unknown Executive: This concludes our call for today. Thank you for everyone for joining.
Unknown Executive: For additional information, please go to investor.groupon.com.