Categories AlphaGraphs, Earnings, Technology

Groupon stock jumps on upbeat Q3 earnings

Groupon Inc. (GRPN) reported a jump in earnings for the third quarter helped by a benefit related to the IBM settlement as well as lower costs and expenses. The bottom line exceeded analysts’ expectations while the top line missed consensus estimates. Following this, the stock inched up over 5% in the premarket session.

Net income soared to $47.2 million or $0.08 per share from $2.94 million or $0.00 per share in the previous year quarter. Non-GAAP EPS increased to $0.04 from $0.01 a year ago. The adjusted EPS was better than the analysts’ expectations of $0.02.

Groupon third quarter 2018 Earnings Infographic
Groupon Q3 2018 Earnings Infographics

Revenue for the quarter dropped by 7% to $592.9 million, reflecting lower customer traffic and its continued focus on revenue generation that maximizes long-term gross profit. The reported revenue was worse than the consensus estimates of $601.89 million.

Gross billings, total income the company gets from the sale of goods and services, decreased 9.3% to $1.22 billion. Active customers on the site fell to 48.8 million from 49.1 million during the prior year period.

North America active customers were 31.4 million as of September 30, 2018, and trailing twelve-month gross profit per active customer increased 3%. International active customers increased to 17.4 million as of September 30, 2018, and trailing twelve-month gross profit per active customer grew 7%.

Global units sold declined 11% to 39.5 million as a result of lower traffic and its continued focus on maximizing long-term gross profit, which resulted in fewer units.

Groupon shares fall as Q2 results miss analysts estimate

Units in North America were down 17% with a significant portion of that decline was due to the focus on long-term gross profit optimization in goods as well as continued scaling of Groupon Plus, a cash-back restaurant deal, and the sale of certain OrderUp assets that occurred in the second half of 2017.

For the full year 2018, Groupon continues to expect adjusted EBITDA to be $280 million to $290 million. The company said increasing its daily mobile traffic from roughly 65% to over 80% over the past three years has meant facing a near-term financial headwind that it believes will pay dividends over time.

Shares of Groupon ended Tuesday’s regular session down 0.31% at $3.26 on the Nasdaq. The stock has fallen over 40% in the past year and over 36% in the year so far.

 

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