Why Local Marketplace Groupon Shares Are Tanking Today

Groupon Inc GRPN reported Q3 FY23 revenue of $126.5 million, missing the consensus of $129.6 million.

North America revenue decreased 12% Y/Y to $94.9 million due to a decline in engagement on the platform that resulted in fewer unit sales. 

International revenue fell 14% Y/Y (19% Y/Y FX-neutral basis) to $31.5 million owing to lower demand for the Goods and Local categories and a reduced engagement on its platform. 

Global billings decreased by 3.5% Y/Y to $418.8 million on lower billings in Travel and Goods businesses. Global units sold in Q3 was 10.1 million, down 18% Y/Y in Q3.

Adjusted EBITDA stood at $18.2 million vs a loss of $(8.60) million a year ago.

Adjusted EPS loss of $(0.12) missed the consensus of $0.11.

Net cash used in operating activities came in at $(13.9) million in Q3, and cash and cash equivalents stood at $101.33 million as of September 30, 2023.

GRPN plans to raise around $100 million between fully backstopped equity rights offering and non-core asset sales.

Groupon Board of Directors has approved an $80.0 million fully backstopped rights offering. Also, the company inked a deal to sell a portion of its investment in SumUp for about $10 million at the same economic terms as the October sale.

GRPN's co-founder Eric Lefkofsky planned to resign as a member of the board, effective November 9, 2023.

"As the fast transformation comes to an end, we are now switching from a cost cutting first mindset to topline first mindset. We are turning our focus to delivering projects across product, engineering, sales, marketing and revenue management that we expect will reinvigorate our marketplace and position our business to return to growth," said Dusan Senkypl, Interim CEO of Groupon."

Price Action: GRPN shares traded lower by 32.27% at $9.17 premarket Friday.