Companies and Brands

Groupon Manages Adult-Level Earnings

Groupon, Inc. (NASDAQ: GRPN) is out with its quarterly earnings report and frankly it looks and feels like an earnings report from adults rather than from what has looked and felt like the adolescents that have been in charge of the company’s…

By Jon C. Ogg
Published May 14, 2012, 4:23pm ET · 2 min read

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Groupon, Inc. (NASDAQ: GRPN) is out with its quarterly earnings report and frankly it looks and feels like an earnings report from adults rather than from what has looked and felt like the adolescents that have been in charge of the company’s controls and procedures so far.  The net loss was $0.02 EPS, but on a non-GAAP basis used by analysts the couponing website reported $0.02 EPS on a revenue gain of 89% with some $559.3 million in sales. Thomson Reuters had estimates of $0.01 EPS on $530.8 million in sales. The company’s cost of revenue rose to $119.5 million from $39.7 million a year ago.  Marketing costs were said to be down almost 50% to $116.6 million, but SG&A costs effectively doubled to $283.5 million.  Total operating expenses rose to $519.6 million from $412.6 million a year ago.

Revenue guidance for the second quarter 2012 is now projected to grow at 40% to 50% in a range of $550 million to $590 million.  Income from operations is put at $25 million to $45 million, which includes approximately $35 million of stock-based compensation. Estimates next quarter are $0.03 EPS and $559.34 million in sales.

The site reported that first quarter gross billings actually increased 103% to $1.35 billion in the first quarter 2012.  For the quarter, operating cash flow increased 367% to $83.7 million and free cash flow was $70.6 million for the first quarter 2012.

North American revenues grew 75%.  Groupon surpassed the 35 million active customer mark with a 140% gain to 36.9 million active customers.  More than 100,000 unique merchants were served in a single quarter.

Groupon ended this last quarter with $1.2 billion in cash and cash equivalents and no long-term debt.  Groupon’s lock-up period has been extended from May 2, 2012 to June 1, 2012.

Shares closed up 18.5% at $11.73 against a post-IPO range of $9.63 to $31.14 and the company had a market capitalization rate of $7.57 billion.  The after-market reaction so far has shares up almost 12% at $12.95 in active trading.

JON C. OGG

Contact [email protected] for any questions or corrections.

Jon C. Ogg

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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