Q2 2025 Groupon Inc Earnings Call
<unk> financial officer, usually pump and senior Vice President of Finance, Ron I could shop.
At this time all participants are in listen only mode. Today's call will be a question and answer session. Only the company has posted earnings materials, including the earnings commentary on the company's Investor Relations website at Investor Dot Group Dot com.
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 August seven 2025, only and will include forward looking statements actual results may differ materially from those expressed or implied in the companys forward looking statements.
Speaker #1: Hell o, and welcome to Groupon's second quarter 2025 financial results conference call. On the call today, our ief Executive Officer, Dusan Senkypl. Chief Financial Officer, Jiri Ponrt.
<unk> undertakes no obligations to update these forward looking statements as a result of new information or future events.
Speaker #1: And Senior Vice President of Finance, Rana Khashab. At this time, all participants are in listen-only mode. Today's call will be a question-and-answer session only.
Additional information about risks and other factors that could potentially impact the company's financial results are included in its press release and in its filings with the SEC, including its quarterly report on Form 10-Q.
Speaker #1: The company has posted earnings materials, including earnings commentary on the company's investor relations website at investor.groupon.com. 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, August 7, 2025, only, and will include forward-looking statements.
We encourage investors to use groupon to Investor Relations website at Investor Dot 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 the SEC corporate governance information and select press releases and social media postings.
Speaker #1: Actual results may differ materially from those expressed or implied in the company's forward-looking statements. Groupon undertakes no obligations to update these forward-looking statements as a result of new information or future events.
On the call today. The company will also discuss the following non-GAAP financial measures adjusted EBITDA and free cash flow.
In <unk> press release, and the 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.
Speaker #1: Additional information about risks and other factors that could potentially impact the company's financial results are included in its press release and in its filings with the SEC.
Speaker #1: Including its quarterly report on Form 10-Q. We encourage investors to use Groupon's investor relations website at investor.groupon.com as a way of easily finding information about the company.
And with that I'd like to turn it over to Sean to make a few opening remarks before we jump into Q&A.
Hello, and thanks for joining us for our second quarter of 2025 earnings call. It's.
Speaker #1: Groupon's 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 postings.
It's a pleasure to be with all of you.
Yesterday after market close we released our earnings and posted our earnings commentary on our investor relationships website.
Speaker #1: 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 the 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.
Today My plan is to make brief opening remarks, and then open up the call for questions.
<unk> from our analysts and several developers submitted in advance.
For more details on our quarterly performance I encourage you to read our earnings commentary.
In addition, I encourage you to review our press release, and 10-Q, which contain more detail on our fourth quarter and full year results.
Speaker #1: And with that, I'd like to turn it over to Dusan to make a few opening remarks before we jump into Q&A.
I am pleased to report another strong quarter of accelerating growth.
Speaker #2: Hello, and thanks for joining us for our second quarter of 2025 earnings call. It's a pleasure to be with all of you. Yesterday, after the market closed, we released our earnings and posted our earnings commentary on our investor relationships website.
<unk> grew 12% year over year, marking continued acceleration in our growth trajectory.
This was driven by strong performance in our apparel category with North America, local billings up 20% year over year in international local billings, excluding Italy, and <unk> up 15% year over year.
Speaker #2: 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.
Combined our core local category, excluding Italy, <unk> cloud grew 19% and now represents nearly 90% of our billings.
Speaker #2: For more details on our quarterly performance, I encourage you to read our earnings commentary. In addition, I encourage you to review our press release and 10-Q, which contain more detail on our fourth quarter and full year results.
This validates the scalability of our marketplace transformation playbook and keeps us on track towards our target of accelerating global billings growth to over 20% by 2027.
Speaker #2: I'm pleased to report another strong quarter of accelerating growth. Global billings grew 12% year over year, marking continued acceleration in our growth trajectory. This was driven by strong performance in our core local category, with North America local billings up 20% year over year, and international local billings excluding Italy and gift cloud up 15% year over year.
We generated strong positive free cash flow of 25 million, demonstrating our ability to drive profitable growth, while investing in our platform and team.
We also announced our proactive refinancing that meaningfully simplifies our capital structure and eliminates constraints within groupon in a position to play offense.
Speaker #2: Combined, our core local category excluding Italy and gift cloud grew 19%, and now represents nearly 90% of our billings. This validates the scalability of our marketplace transformation playbook and keeps us on track toward our target of accelerating global billings growth to over 20% by 2027.
Our hyper local strategy continues to deliver strong results.
Our North America Enterprise brands had an exceptionally strong quarter with 26 brands generating over $1 million in quarterly billings, representing 53% year over year growth.
<unk> America things to do delivered strong double digit growth for the sixth consecutive quarter demonstrating market leadership during the crucial summer season with particular strength in amusement parks.
Speaker #2: We generated strong positive free cash flow of 25 million, demonstrating our ability to drive profitable growth while investing in our platform and team. We also announced a proactive refinancing that meaningfully simplifies our capital structure and eliminates constraints putting Groupon in a position to play offense.
Water parks and multi attraction through process.
On the leadership front I am excited to announce that effective September one.
<unk> will assume the role of Chief operating officer, and there are not quite sure will become our next chief Financial Officer.
Speaker #2: Our hyper-local strategy continues to deliver strong results. Our North America enterprise brand had an exceptionally strong quarter, with 26 brands generating over 1 million in quarterly billings, representing 53% year over year growth.
Both have been instrumental in our transformation since joining in early 2023, and these changes reflect our commitment to developing leaders from within as we build towards our next chapter of growth.
Looking ahead, we are raising our full year billings guidance from 3% to 5% to 7% to nine growth.
Speaker #2: North America thinks to do delivered strong double-digit growth for the six consecutive quarters, demonstrating market leadership during the crucial summer season with particular strength in amusement parks, parks, water parks, and multi-attraction tour passes.
Selecting the strong momentum we are seeing across our business.
We see multiple levers driving accelerating growth and remain confident we are building the foundation for sustained long term value creation.
Speaker #2: On the leadership front, I am excited to announce that effective September 1, Jiri Ponrt will assume the role of Chief Operating Officer and Rana Khashab will become our next Chief Financial Officer.
We are still in the early innings of a large opportunity to build a hyper local experiences marketplace that combines trust duration quality and unbeatable value video network effects and the unit economics of modern marketplaces.
Speaker #2: Both have been instrumental in our transformation since joining in early 2023, and these changes reflect our commitment to developing leaders from within as we built toward our next chapter of growth.
I would like to thank our team for their dedication and hard work.
I've made this progress possible. This journey has not been easy and of our continued commitment to our mission and to our transformation has been a really great with that let's open the call for questions.
Speaker #2: Looking ahead, we are raising our full year billings guidance from 3% to 5% to 7% to 9% growth, reflecting the strong momentum we are seeing across our business.
Thanks Keisha.
Speaker #2: We see multiple levers driving accelerating growth and remain confident we are building the foundation for sustained long-term value creation. We are still in the early innings of a large opportunity to build a hyper-local experience marketplace that combines trust, curation, quality, and unbeatable value with the network effects and unit economics of modern marketplaces.
Our first question is from Sean Mcgowan from Roth Capital Partners, Sean you can now on mute your line.
Hi can you hear me okay.
Yes, we can great. Thank you.
You mentioned in the commentary that you issued yesterday that youre seeing AI generated traffic or researches can you just elaborate a little bit more on that.
Is that incrementally you think youre getting incremental traffic and business from that and what is it that makes them more valuable.
Speaker #2: I would like to thank our team for their dedication and hard work, that have made this progress possible. This journey has not been easy, and we're continued commitment to our mission and to our transformation has been really great.
Thank you Sean for the question.
Based on how we are currently review we believe that.
Speaker #2: With that, let's open the call for questions.
The traffic coming from AI as small incremental.
Speaker #1: Thanks, Dusan. Our first question is from Sean McGowan from Roth Capital Partners. Sean, you can now unmute your line.
And.
I really see AI traffic.
As a tailwind.
So we are spending a lot of resources on building the platform innovation that we are a great partner for AI driven companies I am big believer that the traffic is moving and people are changing behavior, and we will be using AI more and more and I actually see a groupon positioned very well in this because we.
Speaker #3: Hi, can you hear me okay?
Speaker #1: Yes, we can.
Speaker #3: Great, thank ou. You mentioned in the commentary that you issued yesterday that you're seeing, you know, AI-generated traffic or searches. Can you just elaborate a little bit more on that?
Speaker #3: Is that incremental? You ink you're getting incremental traffic? And business from that? And, you know, what is it that makes that more valuable?
But very unique offer and we can be a gateway for merchants to be part of this AI economy.
Speaker #2: Thank you, Sean, for the question. Based on how we currently review, we believe that the traffic coming from AI is more as an incremental.
As to call. It and yes. We are we are growing with pretty much zero base last year. Because this is extremely developing but overall, we see it so.
This trend is really very very strong double digit growth or every month.
Speaker #2: And I really see AI traffic as a tailwind. To us, we are spending a lot of resources on building the platform in a way that we are a great partner for AI-driven companies.
At the same time this is a new field, which is not always easy to measure and there are no like.
Standouts in general so we see on the market the various numbers from different types of companies. So I would like to emphasize that still is a small part of our traffic, but it's the type of traffic, which we believe will grow significantly and will grow also in terms of the impact on overall groupon performance.
Speaker #2: I'm a big believer that the traffic is moving and people are changing behavior and they will be using AI more and more. And I actually see Groupon positioned very well in this because we have a very, very unique offer and we can be a gateway for many merchants to be part of this AI economy as to call it.
Thank you.
Do you have a chance to ask another question at this point.
Jos.
Speaker #2: And yes, we are growing with pretty much zero base last year because this is extremely developing. But overall, we see it as a positive trend with really very, very strong double-digit growth every month.
Yeah, Yeah, Okay. If you could talk a little more generally about the efforts that you've been making over the last couple of years to get merchants more engaged in this.
See more repeat business can you talk a little bit about progress there.
Speaker #2: At the same time, this is a new field which is not always easy to measure and there are no standards in general. So we see on the market various numbers from different types of companies.
Yeah.
So you know we are talking about the merchant relationship and do they hope you are doing the sales.
Since since I joined during the Groupon than we are.
Speaker #2: So I would like to emphasize that still it's a small part of our traffic, but it's the type of traffic which we believe will grow significantly and will grow also in terms of impact on overall Groupon performance.
Different view.
There were some different angles, how we are looking at it in general I consider a groupon like an amazing platform for merchants in general because we are performance based platform, so which means that we are getting paint only one when merchants are getting paid under this.
Speaker #3: Thank you. Do I have a chance to ask another question at this point?
Speaker #2: I don't know at to do.
Very important when you are advertising on our platforms typically you have to pay for traffic and then you hope that you will be able to optimize so in general our long term positioning.
Speaker #1: Yeah.
Speaker #3: Yeah, okay. If ou can talk a little more generally about the efforts that you've been making over the last couple of years to get merchants more engaged and, you know, to see more repeat business, you know, can you talk a little bit about progress there?
It's a very strong vis vis merchants, we are still in the process of transformation of our sales force.
Speaker #2: Yeah. So, you ow, we are talking about the merchant relationship and the way how we are doing the sales pretty much since I joined the Groupon.
To be partners to merchants, we are now looking on groupon not as a bond marketplace. When one size fits all but internally we are talking about like triple digit number of micro categories on groupon.
Speaker #2: And we have different views and different angles how we are looking at it. But in general, I consider Groupon like an amazing platform for merchants in general because we are performance-based platforms.
I want to understand a bond by bond understand how the economics for our merchants and then be better partners and helping them to create campaigns, which they'll make sense. Both for merchants, but also also for the marketplace and this applies actually across the board.
Speaker #2: So which means that we are getting paid only when merchants are getting paid. And this is very important when you are advertising on our platforms.
Speaker #2: Typically, you have to pay for traffic and then you hope that you will be able to optimize. So in general, our long-term positioning is very strong with merchants.
We were in our commentary talking about very strong performance International Enterprise segment.
And what I was describing works both with small businesses, but at the same time it develops with large national enterprise product notice about sometime.
Speaker #2: We are still in the process of transformation of our sales force to be partners to merchants. We are now looking on Groupon not as a one marketplace when one size fits all, but internally we are talking about like triple-digit number of micro categories on Groupon.
Sometimes the discussion is even easier and faster because they really understand performance they understand how much of a paying before with other marketplaces or advertising platforms.
They are using.
Speaker #2: We want to understand one by one, understand how the economy for merchants works. And then be their partners and helping them to create campaigns which will make sense both for merchants but also for marketplace.
When we understand the burn needs then we can be great partner for van also I would say that in last 12 months, we've made huge progress on understanding what's going on on the platform. So right now and we are starting with dislike large partners, we can come to them and explain them show them.
Speaker #2: And this applies actually across the board. We were in our commentary talking about very ong performance in the national enterprise segment. And what I was describing works both with small businesses but at the same time, it works with large national enterprise partners where sometimes the discussion is even easier and faster because they really understand performance.
Data are showing about the incrementals of the business like bigger customers coming from Groupon will come to bear.
Either by size or properties, Bevard, groupon or not show vendor behavior, how they were making the decision process because they thought actually vehicles that they ask for and do they hope we are presenting controlling groupon value and then it helps us grow the business with merchants more.
Speaker #2: They understand how much they are paying with our marketplaces or advertising platforms, which they are using. And when we understand their needs, then we can be great partners for them.
Thank you I'll jump back in the queue.
Thank you.
Our next question comes from Bob Brooks from Northland Capital, Bobby you can add on mute your line.
Speaker #2: Also, I would say that in the last 12 months, we made huge progress in understanding what's going on on the platform. So right now, we are starting with these large partners; we can come to them and explain and show them what the data is showing about the incrementality of the business.
Hey, good morning team in first just wanted to congratulate Brian I'll move into the CFO role and you're taking over the CFO role so kind of piggybacking on the AI questions. It was really interesting to hear that the AI powered searches Sean strong strong signs of growth, albeit off a small base.
Speaker #2: Like whether customers coming from Groupon would come to their either websites or property without Groupon or not, showing the behavior, how they were making the decision process.
Two part question first of that notable growth that you've seen so far.
Speaker #2: And with data, actually very positive for in the way how we are presenting and showing Groupon value. And then it helps us grow the business with merchants more.
Is that mostly just these AI search engine sort of organically picking up your deals or have you made intentional enhancements to your listings to try to pick up the traffic and then second just wanted to hear how you plan internally to further accelerate that traffic coming from this channel.
Speaker #3: Thank you. I'll jump back in the queue.
Speaker #2: Thank you.
Speaker #1: Our next question comes from Bobby Brooks from Northland Capital. Bobby, you can now unmute your line.
Yes so.
Internally, we are looking on AI together with our CFO.
Speaker #4: Hey, good morning, team. And first, just want to congratulate Rana on moving to the CFO role in a ar, taking over the COO role.
Assuming no Google is significantly changing the behavior of the search results pages overlooking and putting more and more content and keeping the people much more on variable size versus sending them to us or would we see in SCO.
Speaker #4: So kind of piggybacking on the AI questions, it was really interesting to hear that the AI-powered search is showing strong signs of growth, beit off a small base.
Speaker #4: But it's a two-part question. First, of that notable growth that you've seen so far, is that mostly just these AI search engines sort of organically picking up your deals, or have you made intentional enhancements to your listings to try to pick up this traffic? And second, I just wanted to hear how you plan internally to further accelerate that traffic coming from this channel.
That is that we have pretty much a steady steady performance, which actually.
So greater than the cost.
Plenty of companies, which are facing headwinds right now because of the traffic.
<unk> goes down would we see if it does we have a declining traffic. However people are making and spending a little bit more time and decision, making on Google for example, and then coming to Groupon and <unk>.
Speaker #2: Yeah. So internally, we are looking on AI together with SEO because as you know, Google is significantly changing the behavior of the search result pages, how we are looking and putting more and more content and keeping the people much more on their websites versus sending them to us.
They have simply higher conversion so in SCO pod, which also partially includes AI AI sniff beds.
Our holding holding's study, which I consider a great results and then <unk>.
See the pause where people are starting their search in AI.
Speaker #2: So what we see in SEO that is that we have pretty much steady performance, which actually is a great win because there are plenty of companies which are really facing headwinds right now because the traffic goes down.
AI engines being at Perplexity open AI and others.
And we are investing into our platforms. So that groupon is providing appropriate results. So the debate can directly link us ssrs Trudeau recommendation on who would be discussing what I can do this might gets over the weekend that groupon. A groupon is included under this part is growing and I see this trend of moving people towards AI.
Speaker #2: What we see is that we have declining traffic. However, people are making and spending a ittle bit more time in decision-making on Google, for ample, and then coming to Groupon and they have simply higher conversions.
<unk> is very strong.
<unk> accelerates.
How we look at it from the midterm and long term perspective, yes, we are investing into our platforms. So that.
Speaker #2: So in SEO part, which also partially includes AI through this AI snippets, we are holding steady, which I consider a at result. And then we see the part where people are starting their search in AI engines, being it Perplexity, OpenAI, and others.
Our platform is group's citizen and partner in this AI world.
We plan to be part of the pilot program. For example, if open AI. So that they will be developing better product it will be even possible to book Groupon experiences and deals directly through AI agent and this is the in my opinion the direction about AI is heading it will take some time.
Speaker #2: And we are investing into our platform so that Groupon is providing proper results so that they can directly link us as a source, show the recommendation when you would be discussing what I can do with my kids over the weekend, that Groupon is included.
But I expect that it will be really like an executive assistant for people or they will be using voice talking discussing with AI will to do.
Speaker #2: And this part is growing, and I see this trend of moving people towards AI search as a very strong and it just accelerates. And how we look at it from the mid-term and long-term perspective, yes, we are investing into our platform so that our platform is good citizen and partner in this AI world.
E Commerce players, who wants to be really playing important part in this ecosystem to support it so that it's easy for AI platform, who do the booking due to orders.
Although relevant information and this is one of the internal focuses of groupon.
Speaker #2: We plan to be part of the pilot program, for example, with OpenAI so that in as they will be developing their product, it will be even possible to book Groupon experiences and deals directly through AI agent.
To play really well and maybe I'll ask her about on this I believe that to be our position.
But also from the perspective that we have unique inventory.
There are many companies, which pretty much of a commodity inventory that you can buy on other places, but the groupon has that unique deals which are not available anywhere else are typically on the internet.
Speaker #2: And this is the, in my opinion, the direction where AI is heading. It will take some time, but I expect that it will be really like an executive assistant for people where they will be using voice, talking, discussing with AI what to do.
And disappoint.
Major major advantage for us to be even I would say preferred partner for AI companies in certain segments.
Speaker #2: And e-commerce players who want to be really playing important parts in this ecosystem need to support it so that it's easy for AI platforms to do the booking, do the orders, and find all the relevant information.
I appreciate that detail and just to confirm so it seems like the uptake in traffic that you've seen so far is sort of a mix of just organic and and enhancements that you've made in the platform.
Speaker #2: And this is one of the internal focuses of Groupon: to play really well. And maybe a last remark on this, I believe that we are positioned very well also from the perspective that we have unique inventory.
I would say that in SCO.
We cannot let's say maintain our numbers because of new platform, which we have.
Speaker #2: There are many companies which pretty much have commodity inventory which you can buy on other places, but Groupon has a unique deals which are not available anywhere else.
<unk> able to provide better and better results from Google and then if that is the power of focusing on what you can get internally and Chubb GPT and others, which is I would say additional technological development.
Speaker #2: Typically, on the internet, and at this point, it's a major, major advantage for us to be, even, I would say, a preferred partner for AI companies in certain segments.
Our platform is capable of providing right now in that part.
Is the growth.
Or it could be worth talking about in our comment that despite all of those starting with very low and small base, it's growing 50% month over month.
Speaker #4: Appreciate that detail. And just to confirm, so it seems like the uptick in traffic that you've seen so far is sort of a mix of just organic and enhancements that you've made to the platform?
Got it and then the next one for me is you guys talked about how you mentioned over 200 micro categories within the North American local segment, where you feel you can execute your go to market strategy could you just provide some context on that like maybe what would be helpful is how many micro categories did you feel you've successfully pursue.
Speaker #2: I would say that in SEO, we have we can, let's say, maintain our numbers because of new platforms which we have, which is able to provide better and better results from Google and then there is the part focusing on what you can get internally in ChatGPT and others which is, I would say, additional technological development which our platform is capable of providing right now.
Within second quarter that will have resulted in that was reflected in second quarter results.
So we are.
We are trying to improve across across the bar. However, it will be a long term process and we were mentioning that we are really in the beginning.
Speaker #2: And that part is the growth which we were talking about in our commentary. This part, although starting with very low and small base, it's growing 50% month over month.
Areas that we see that if we do a deep dive we as a category manager in some segment and we really understand the marchand, we understand where economic understand real in depth what.
Speaker #4: Got it. And then the next one for me is you guys talked about how you ioned you have over 200 micro categories within the North American local segment where you feel you can execute your go-to-market strategy.
What customers are asking for it and it allows us to accelerate so we have several categories. I believe you were mentioning for example, the airport parking.
Speaker #4: Could you just provide some context on that? Like maybe what would be helpful is how many micro categories did you feel you successfully pursued within the second quarter?
We were mentioning categories, which maybe you would not expect on Groupon like all exchange for example.
Right.
<unk> worked very closely.
Speaker #4: That would have ed in that reflected in the second quarter results.
To have proper supply on one side, but at the same time, we are into product and again, thanks to the better platform, which we have now available we can start customizing their user interface.
Speaker #2: So we are trying to improve across the board. However, it will be a long-term process, and we were mentioning that we are really in the beginning in many areas that we see that if we do a deep dive, we have a category manager in some segment.
So what it includes features which are important for decision making process to give you a very simple example, there are categories, where image is not important at all when you are for example, deciding on the oil exchange. The picture is very small part of the decision making process. While there are categories, where simple it you need to know.
Speaker #2: And we really understand the merchants, we understand their economy, we understand really in depth what customers are asking for, then it allows us to accelerate.
Speaker #2: So we have several categories, and I believe we were mentioning for example the airport parking. We were mentioning categories which maybe you would not expect on Groupon like all exchange, for example.
How is the place where you will go looks like how it will be to feelings emotions. So we are able to go on that level, both with merchants, but right now also pivotal consumer to customize the user experience and it will be visibility pretty much never ending process like.
Speaker #2: Where we work very closely to have proper supply on one side, but at the same in the product and getting thanks to the better platform which we have now available, we can start customizing the user interface so that it includes features which are important for decision-making processes to give you very simple examples.
Many marketplaces, which really focus on one category.
It's much easier for a N V F. S. I said right now internally.
Our structure shows 200 categories versus by far not the final number or we may end up with less.
Speaker #2: There are categories where image is not important at all when you are, for example, deciding on the oil exchange, the picture is very small part of the decision-making process, while there are categories where time, we are know how the place where you will go looks like, how it will be the feelings, emotions.
Or more.
But it takes time really to go deeper and deeper we have several categories, which were pretty solid state and focus on one to prove the concept, which where we have very good results, but we will.
<unk> improved pretty much each of them to certain level undo iterations.
Speaker #2: So we are able to go on that level both with merchants, but right now also with the consumer to customize the user experience. And it will be this will be pretty much never-ending process.
That's super helpful. And then just one last one for me with the refinancing that you guys did intra quarter.
And that obviously allows you to step back into your buyback just curious to hear any thoughts on when that might make sense for you guys to do it or just may be triggers that you would be looking for to then step into start to repurchase shares.
Speaker #2: Like there are many marketplaces which really focus on one category and it's much easier for them. We have, as I said, right internally our structure shows 200 categories.
Speaker #2: This is by far not the final number. We may end up with less or more. But it will take time really to go deeper and deeper.
So like the maybe I can I can think disadvantage.
I look at this through the lenses of.
Speaker #2: We have several categories which we pre-selected and focused on to prove the concept where we have very good results. But then we will probably improve pretty much each of them to a certain level and do iterations.
Value creation, so we are here and.
And our main responsibility is.
To grow value for our shareholders I believe that we are in very good position and we want to maintain going forward of demand resilience.
Speaker #4: Awesome. That's super helpful. And then just one last one for me with the refinancing that you guys did interquarter. You know that obviously allows you to step back into your buyback.
Balance balance sheet.
And right now I see who adios.
We are looking into it.
Speaker #4: Just curious to hear any thoughts on when that might make sense for you guys to do it or just maybe triggers that you would be looking for to then step into start to repurchase shares.
Sue mentioned share repurchase six right.
Right now we have an existing share buyback authorization in place.
Which has $245 million available for repurchases.
Speaker #2: So like the maybe I can take this one, Jiri, is that I look at this through the lenses of value creation. So we are here and our main responsibility is to grow value for our shareholders.
And vital buybacks will always remain an important consideration we will deploy capital here only one represents a really highly attractive use of funds.
<unk> the second part to the story or M&A opportunities.
Speaker #2: I believe that we are in very od position and we want to maintain going forward optimal and resilient balance sheet. And right now I see two areas which we are looking into it.
During my career I, let like dosing of Actavis as Sean.
I understand both the opportunity and the risk associated with the inorganic strategies.
And while we will remain open to strategically aligned acquisitions that enhance our market position and capabilities. We will do it only with a discipline to make sure that the brink's brink's value. So we both share repurchases and M&A opportunities or something which we are looking into very very deeply and we want to make credit decisions here.
Speaker #2: First, as you mentioned, is share repurchases. Right now we have an existing share buyback authorization in place. Which has 245 million dollars available for repurchases.
Speaker #2: And while buybacks will always remain an important consideration, we will deploy capital here only when it represents a ally highly attractive use of our funds.
I appreciate the color I'll return to the queue congrats on that.
Thank you Bobby.
We have a follow up question from Sean go ahead and on mute your line.
Speaker #2: The second part to the story are M&A opportunities. During my career, I led like dozens of acquisitions and I understand both the opportunity and the risk associated with inorganic strategies.
Yeah. Thank you I appreciate that.
Any update on.
The progress you've made and kind of re engaging the cohorts that you felt like you've lost you know late last year.
Speaker #2: And while we will remain open to strategically aligned acquisitions that enhance our market position and capabilities, we will do it only with discipline to make sure that it brings value.
And the tech conversion.
My answer would be very similar to what would be the answer in class.
Speaker #2: So these are both share repurchases and M&A opportunities are something which we are looking into very, very deeply and we want to make right decisions here.
Lost earnings we don't publish any specific numbers, but based on the overall results of the company you can see that.
We were able to achieve.
Speaker #4: Appreciate the call, return to the queue. Congrats on the.
Some meaningful meaningful improvements here overall.
Speaker #1: Thank you, Bobby. Looks like we have a follow-up question from Sean. Go ahead and unmute your line.
We are very happy both with the acquisition of new customers and growth of new customers, but also the cohort of existing customers is performing well.
Speaker #3: Yeah, thank you. I appreciate that. Any update on the progress you've made in kind of re-engaging the cohorts that you felt like you lost, you know, late last year?
Okay. Thank you if I can ask a couple of questions about Italy.
Does this settlement with Italy.
Speaker #3: In the tech conversion?
What in your opinion, a final into that whole thing I know there are there any other countries kind of looming in the wings, there that might have something to say and would you rule out restarting the business is a local business in Italy.
Speaker #2: My answer would be very similar to what we were answering last earnings. We don't publish any specific numbers, but based on the overall results of the company, you can see that we were able to achieve some meaningful improvements here.
This tax thing is settled.
Thank you everyone for that.
So first of all.
The settlement agreement.
Agreement is now owner verbal agreement, it's not my bank that has to go through various approvals.
Speaker #2: Overall, we are very happy both with the acquisition of new customers and growth of new customers. But also the cohort of existing customers is performing well.
So various statutory bodies in Italy.
If it's approved then yes. It is it means that.
Speaker #3: Okay. Thank you. If I can ask a couple of questions about Italy. Does this settlement with Italy put, you ow, in your opinion, a final end to that whole thing?
In Italy about these two cases.
Thanks Casey.
Until 2000, and so some of these all work.
Speaker #3: You know, are there any other, you know, countries kind looming in the wings there that might have something to say? And would you rule out restarting the business, the local business in Italy?
And then second questions.
We'll be.
So being able to open in Italy.
Generally it would be CVC.
Speaker #3: Now that this tax thing is settled?
Doing very well in the international business that Joseph case in a couple of quarters ago.
Speaker #5: I will answer that. So first of all, the settlement is or agreement is now on a verbal agreement. It's not binding. It has to go through various approvals through various statutory bodies in Italy.
So certainly we will sink auctions, including.
Okay. Thank you.
Speaker #5: But if it's approved, then yes. It is, it means that our troubles in Italy about these two cases tax cases from 2012 and 2017 are over.
Thank you Sean.
We will now move to written questions.
A question for D. Sean you may have answered a bit of this already.
Which initiatives are spurring most growth.
Speaker #5: And then to your second question, AB will be thinking about reopening Italy. Generally, what we see, we see that we are doing very well in international business, which was not the case in a uple of quarters ago.
[laughter].
I don't see us as the one.
Single initiatives like I know that there are many people who love this question and I'm.
Like answering it in the same time in the same way for the last two years <unk> plenty of smaller initiatives, which simply add up together and this is done by the complexity of Grupo <unk> in a number of verticals, which I was talking about today and questions regarding micro category is very simple if he needs to.
Speaker #5: And so certainly we will think all options including reopening Italy.
Speaker #3: Okay, thank ou.
Speaker #1: Thank you, Sean. We will now move to written questions. A question for Dusan. You may have answered a bit of this already. Which initiatives are spurring the most growth?
Good.
111, and I think in the positive undergo component tried to have flagged one size fits all approach I don't think it was the right strategy, but I can I can simplify it.
And to the free part of the chart that's much more important.
Speaker #4: I don't see it as one single initiative
So each marketplace.
On the on demand side.
Speaker #2: like I know that there are many people who love this question and I'm like answering it in the same time, in the same way for the last two years.
Our new platform.
Mobile next power, Inc. Plenty of our traffic.
We were able to improve the platform so that it's running in supporting our marketing activities. So new platform and marketing engine behind it is a big enabler of what we are doing and the results, which we are achieving right now in that marketing engine, it's not just the performance marketing but.
Speaker #2: This is plenty of smaller initiatives which simply add up together and this is done by the complexity of Groupon and the number of verticals which I was talking about today in questions regarding the micro categories where simply we need to take it one-by-one and I think in the past when the company tried to have like one size fits all approach, I don't think it was the right strategy.
Much all channels.
We are discussing today SCO and AI.
Speaker #2: But I can simplify it into the three parts of which are pretty much most important on for each marketplace. On demand side, we have new platform, mobile next, powering plenty of our traffic.
Which are a tailwind for us, but it had been for many other companies.
But at the same time, we are able to do huge progress in marketing and display display marketing, we are growing and doing plenty of motto.
Not only the experiment because we have a very significant traffic or are they coming from associated with Influencer marketing. So we are moving here thanks to the platform.
Speaker #2: We were able improve the platform so that it's running and supporting our marketing activities. So new platform and marketing engine behind it is a big enabler of what we are doing and the results which we are achieving right now.
And the marketing engine up in the in the funnel and that's why if you are talking about the plan to run in Q4, and Q1 next year or the small small brands campaign than on the supply side, where there are several questions to this.
Speaker #2: And that marketing engine is not just the performance marketing, but pretty much all channels we were discussing today, SEO and AI, which are a tailwind for us versus headwind for many other companies.
Seed debated every quarter.
We are getting better and better and smaller steps in managing supply side and I am answering it in very wide open way.
Speaker #2: But at the same time, we are able to make huge progress in marketing, especially in display marketing. We are growing and conducting plenty of experiments because we have very significant traffic already coming from resources with influencer marketing.
Bye bye talking about managing supply sides means understanding.
Who are the merchants, which maybe you need to get on the platform.
The deals, which we need on the platform should look like what is the value of which we should be providing a groupon and there are multiple strategies just like micro category approach to understand risk businesses. Some profitability. However, also last several earnings calls I will stoking about with hyper localization.
Speaker #2: So we are moving here thanks to the platform. And the marketing engine up in the funnel and that's why we were talking about the plan to run in Q4 and Q1 next year, the small brand campaign.
Speaker #2: Then on the supply side, there were several questions about this. I see the way that every quarter we are getting better and better in small steps in managing the supply side.
<unk> strategy, but the teams are focused on smaller areas. They understand it. So this is a mix on the supply side of both of these approaches.
And then first last year, we were fighting with multiple headwinds from our platform migrations.
Speaker #2: And I'm answering it in very wide open way. By talking about managing supply side means understanding who are the merchants which we need to get on the platform.
It was huge lesson for me for the whole company I believe in this area, we do much better and we focus on mitigating the impact on making sure that whatever we do it takes longer than what I would love to see but at the same time the platform.
Speaker #2: How the deals which we need on the platform should look like. What is the value which we should be providing as a Groupon? And there are multiple strategies.
Speaker #2: It's like micro category approach to understand with businesses and profitability. However, also last several earnings calls, I was talking about this hyper-localization strategy where the teams are focused on smaller areas.
Is not causing causing headwinds, which are Viva fighting lost here.
Thank you to shop it looks like we have a follow up question from Bobby Brooks from Northland Bobby Please on mute your line.
Hey, Thanks for letting me jump back on just a quick one.
Speaker #2: They understand it. So this is a mix on the supply side of both these approaches. And then last year, we were fighting with multiple headwinds from our platform migrations and it was a huge lesson for me, for the whole company.
I just feel like it might be helpful to remind the investment community of the dynamic between billings growth and revenue growth and how you see those two starting to converge here over the next few quarters could you could you just remind us on that dynamic.
Speaker #2: I believe, and this year we do much better and we focus on mitigating impact and making sure that whatever we do, it takes longer than what I would love to see.
Yes, a little bit to what you see is there'll be outgrowing, especially in local business billings much faster versus serving you.
Speaker #2: But at same time, the platform is not causing headwinds, which we were fighting last year.
These get.
Very similar to would be described in the previous quarters.
Roughly half of that is related to our take.
Speaker #1: Thank you, Dusan. It looks like we have a follow-up question from Bobby Brooks from Northland. Bobby, please unmute your line.
Great.
And Oh, sorry to a redemption, which influence which is.
Speaker #4: Hey, thanks for etting me jump back on. Just a quick one. And I just feel like it might be helpful to remind the investment community of the dynamic between billings growth and revenue growth.
Our people are.
Enjoying our deals and we.
Yeah.
Proposing and.
Speaker #4: how you see those two starting to converge here over the next few quarters. uld you just remind us on that dynamic?
Pushing them to do it because we believe that and.
And we see it on our beta is the customer is using.
And thirdly, our voucher.
Speaker #5: Yeah. Yes. Bobby, so you what you see is that we are growing especially in local business billings much faster versus revenue. We get is very similar to what we described in the previous quarters.
It's interesting there.
<unk> because they are coming back to our platform buying new deals.
Becoming our customers.
So this is the one part second part is a mix of take rates do.
Speaker #5: Roughly half of that is related to our take rate. And oh, sorry, to our redemption, which influenced take rate. Our people are really enjoying our deals, and we are proposing and pushing them to do it because we believe that, and we see it in our data, if the customer is using and redeeming our voucher, it's increasing their lifetime value because they are coming back to our platform, buying new deals, and they are becoming our loyal customers.
Two our increased enterprise.
And also you know that to be in very good boot season, which is generally the.
The line of business, which doesn't have such high.
As for example, health and beauty or other categories. So those two factors higher redemption.
And the mix of cut degrees and mix.
Enterprise SKU is what's contributing to the difference between billings and revenues.
Got it thanks that's helpful.
Speaker #5: So this is one part. The second part is a mix of take rates. Due our increase enterprise deals and also you know that we had very good things to do season, which is generally the line of business which does not have such high take rates.
If there are no other questions. This concludes our call for today. Thank you everyone for joining for additional information. Please go to investor deck Groupon Dot com.
Speaker #5: As for example, house and beauty or other categories. So those two factors higher redemption and mix of categories and mix of enterprise versus core local is what's contributing to the difference between our billings and revenues.
Speaker #4: Got it. Thanks. That's helpful.