Groupon Investor Overview March 10, 2015
Forward-Looking Statements The statements contained in this presentation that refer to plans and expectations for the next quarter, the full year or the future are forward-looking statements that involve a number of risks and uncertainties, and actual results could differ materially from those discussed. The risks and uncertainties that could cause our results to differ materially from those included in the forward-looking statements include, but are not limited to, volatility in our revenue and operating results; risks related to our business strategy including our marketing strategy and spend; effectively dealing with challenges arising from our international operations; retaining existing customers and adding new customers; retaining and adding new and high quality merchants; cyber security breaches; incurring expenses as we expand our business; competing successfully in our industry; maintaining favorable payment terms with our business partners; providing a strong mobile experience for our customers; delivery and routing of our emails; maintaining a strong brand; managing inventory and order fulfillment risks; integrating our technology platforms; managing refund risks; retaining our executive team; litigation; compliance with domestic and foreign laws and regulations, including the CARD Act and regulation of the Internet and e-commerce; tax liabilities; tax legislation; maintaining our information technology infrastructure; protecting our intellectual property; handling acquisitions, joint ventures and strategic investments effectively; seasonality; payment-related risks; customer and merchant fraud; global economic uncertainty; and our ability to raise capital if necessary. We urge you to refer to the factors included under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, copies of which may be obtained by visiting the company's Investor Relations web site at http://investor.groupon.com or the SEC's web site at www.sec.gov. Groupon's actual results could differ materially from those predicted or implied and reported results should not be considered an indication of future performance. You should not rely upon forward-looking statements as predictions of future events. Although Groupon believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither the company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. The forward-looking statements reflect Groupon s expectations as of February 12, 2015. Groupon undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in its expectations. Additional information relating to certain of our financial measures contained herein is available in our most recent earnings release and at our website at investor.groupon.com. 2
Groupon Operates Across 3 Major Categories Gross Billings 1 of ~$3.5 billion Gross Profit 1 of ~$1.1 billion Gross Billings 1 of ~$3.1 billion Gross Profit 1 of ~$316 million Gross Billings 1 of ~$1 billion Gross Profit 1 of ~$149 million (1) FY 2014 Billings and Gross Profit 3
We ve Grown our Presence Around the World Operate in 47 countries, covering ~80% of GDP NA Gross Billings 1 of ~$3.3B EMEA Gross Billings 1 of ~ $2.1B Relative Gross Billings ROW Gross Billings 1 of ~ $2.2B Source: CIA Factbook, Company Data (1) FY 2014 Billings 4
In 2015, We re Focused on Connecting Customers and Merchants ~110M Mobile Downloads, >50% Mobile Transaction Mix ~10k merchants connected through our merchant tablet, rolling out beacons ~370k Active Deals (including Local, Goods & Travel) >800K Merchant Pages released to be indexed, Nearly 25M tips and ratings >50k Coupons in NA All data as of December 31, 2014 with the exception of mobile downloads, which is as of January 31, 2015 and Merchant Pages released to Google, which is as of February 12, 2015. 5
Core Inputs to Growth Active Deals 1 +164% y/y ~370K 30.0% 25.0% 20.0% 19% Search 2 +700 bps y/y 26% 60.0 50.0 40.0 Active Customers 3 43.7M +23% y/y 53.9M $180 $160 $140 $120 Spend per Average Active Customer $137 +13% y/y $155 4 100.0 80.0 +81% y/y Units 5 101M 15.0% 30.0 $100 $80 60.0 56M >140K 10.0% 20.0 $60 40.0 5.0% 10.0 $40 $20 20.0 4Q13 4Q14 0.0% 4Q13 4Q14 0.0 4Q13 4Q14 $- 4Q13 4Q14 0.0 4Q13 4Q14 (1) Active deals represents the number of daily featured and Deal Bank deals offered on average at the end of that period. (2) Search represents percentage of transactions in North America related to search (includes free text search on web and mobile; excludes SEO and SEM). (3) Active customers reflect the total number of unique user accounts who have purchased a voucher or product during the trailing twelve months. (4) Spend per average active customer reflects the total gross billings generated in the trailing twelve months per average active customer over that period. (5) Units reflect vouchers and products sold before cancellations and refunds. 6
Progress with Key Inputs Driving Accelerated Growth Series 1 North America Local Gross Billings Growth Year-over-Year 14% 10% 2% 1% 2% 4Q13 1Q14 2Q14 3Q14 4Q14 7
Stability in Email and Growth in Non-Email Channels is Expected to Drive Sustained Future Growth NA Local Email & Non-Email Transaction Volume 1,2 $400M NA Local Gross Billings 3 $500M +23% Non-Email 2 $200M $250M (23%) Email $0M $0M 1 Represents North America Local customer purchases before Refunds and Order Discounts 2 Non-Email includes Mobile (including mobile email), SEO, SEM, Direct, Affiliate, Display, Free Referral, Managed Social, Paid User Referrals, and other 3 Represents North America Local total dollar value of customer purchases excluding applicable taxes and net of estimated refunds 8
Translating to Continued Growth Globally Gross Billings & Revenue USD, Millions Adjusted EBITDA USD, Millions 1 $2,000 Chart Title $1,817 $1,819 $1,861 $2,084 +31% Y/Y $87 $1,500 $1,593 $72 $59 $67 $1,000 $40 +20% Y/Y $500 $768 $758 $752 $757 $925 $- 4Q13 1Q14 2Q14 3Q14 4Q14 4Q13 1Q14 2Q14 3Q14 4Q14 Gross Billings Revenue (1) Adjusted EBITDA is a non-gaap financial measure. See appendix for a reconciliation to the most comparable U.S. GAAP financial measure, Net (loss) income. 9
Appendix 11
Non-GAAP Reconciliation Adjusted EBITDA (in thousands) The following is a reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP financial measure, Net (loss) income : 4Q13 1Q14 2Q14 3Q14 4Q14 Net (loss) income $(78,861) $(35,363) $(20,922) $(19,018) $11,384 Adjustments Stock-based compensation 32,239 23,729 31,655 34,574 32,061 Acquisition-related expense (benefit), net 2,265 1,785 597 (304) (809) Depreciation and amortization 24,132 34,740 34,658 38,146 37,377 Other expense, net 84,833 840 1,023 20,023 11,467 Provision (benefit) for income taxes 7,380 14,570 12,045 (6,434) (4,457) Total Adjustments 150,849 75,664 79,978 86,005 75,639 Adjusted EBITDA $71,988 $40,301 $59,056 $66,987 $87,023 12