Groupon q4 2012 public fact sheet

Q4 2012 FACT SHEET

Our Mission: To Become the Operating System for Local CommerceUpdated March 2013

http://www.groupon.comhttp://twitter.com/groupon

https://www.facebook.com/grouponhttp://www.grouponworks.com

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OVERVIEWGroupon (NASDAQ: GRPN) is a global leader in local commerce, providing a platform for people around the world to search and discover great businesses at unbeatable prices. Groupon is reinventing the traditional small business world by providing merchants with a suite of products and services, including customizable deal campaigns, credit card payments processing capabilities and point-of-sale solutions to help them attract more customers and run their operations more effectively. By leveraging the company’s global relationships and scale, Groupon offers consumers incredible deals on the best stuff to eat, see, do and buy in 48 countries. With Groupon, shoppers discover the best a city has to offer with Groupon Local, enjoy vacations with Groupon Getaways and find a curated selection of electronics, fashion, home furnishings and more with Groupon Goods.

To subscribe to Groupon emails or search our deal marketplace, visit www.Groupon.com. To learn more about the company’s merchant solutions and how to work with Groupon, visit www.GrouponWorks.com.

REVENUE BY SEGMENT(Q2 2012)

FINANCIAL RESULTS: Q4

• Gross billings increased 24% YoY to $1.52 billion 1

• Consolidated revenue of $638.3 million, an increase of 30% YoY

• Direct revenue of $225.2 million, up 1,549% YoY 4

• Operating loss of $12.9 million (including stock-based compensation and acquisition-related expenses of $26.6M, and depreciation and amortization of $16.0M) versus operating loss of $15.0 million in Q4 2011

• GAAP loss per share of $0.12• $25.7 million of Free Cash Flow in Q4 and trailing twelve

month FCF of $171.0 million, an decrease of 83% YoY 5

• At the end of the quarter, Groupon had $1.2 billion in cash and cash equivalents and no long-term borrowings

• Marketing expense per new customer improved 61% YoY, enabling the reduction of marketing spend by 61% compared with Q4 2011

1 In absolute dollars. Gross billings defined as the total amount collected from customers, excluding any applicable taxes and net of estimated refunds2 Over the last six months3 Active defined as the total number of unique accounts who have purchased Groupons in the last twelve months4 Direct revenue defined as the amount earned from the sale of products for which Groupon is the merchant of record5 Please refer to the non-GAAP reconciliation tables in Groupon’s Q4 2012 earnings release

• 48 countries worldwide (see country list on p.3)/ 500+ markets worldwide

• Surpassed 200 million subscribers in Q3• 41.0 million active customers worldwide as of

Dec. 31, a 22% increase YoY 3

• 2000+ individual types of goods and services• More than 10,000 Groupon employees

worldwide as of Dec. 31• 10 acquisitions in 2012 and 2 acquisitions by the

end of February 2013

• Groupon recorded the largest sequential gross billings increase in history1 - the best evidence yet that consumers love Groupons!

• Consolidated units surpassed the 50 million unit mark for the first time in Q4 2012; worldwide growth hit 19% QoQ and 21% YoY; NA local unit growth reached 20% QoQ and 25% YoY

• North American Customer Satisfaction (CSAT) is among the highest ranked in e-commerce (see p. 4) and has improved internationally in almost every country 2

• Active customers increased 22% year-over-year 3

• Over 500,000 merchant partners have been featured in our marketplace as of 12/31

• Added the most unique merchants to our platform in the company’s history in Q4

• Number of active deals in North America increased to nearly 37,000

• Of the merchants featured in North America in Q4 2012, 84% continued to run deals in Deal Bank as of the end of February 2013

• Merchant Refeature Rates Remain High Over 50% of offers were with merchants refeaturing with Groupon in Q4 2012

GLOBAL REACH: Q4

Merchants Consumers

North AmericaInternational

http://investor.groupon.com/releasedetail.cfm?ReleaseID=743818



Q4 2012 FACT SHEET


CHANNELS

• Nearly 40% of North American transactions were on mobile devices in January, an increase of 44% YoY.

• Black Friday 2012 transactions via mobile were up 140% YoY, driving more than 40% of total transactions and more than half of Groupon Goods’ transactions

• The average North American mobile customer continues to spend well over 50% more than web-only customers

• International mobile mix is less than North America, but increasing at 1.5x the NA rate

• Customers with the 2.4 version of Groupon Mobile can now search the deal marketplace, just like the web platform

MOBILE - A GLOBAL M-COMMERCE LEADER

• Groupon’s 200+ million subscribers receive emails each day surprising and delighting them with curated, unbeatably-priced offers from an ever-expanding list of over 2,000 individual types of goods and services

• Email has been diversified beyond daily deals to include Groupon Getaways, GrouponLive, and Groupon Goods, a category that has already reached an annual run rate of nearly $2 billion in global billings due to a seasonally strong Q4

• Smart Deals email personalization gives Groupon the ability to customize the deals subscribers receive every day and includes input subscribers submit on their interests and curiosities

• Smart Deals has driven a nearly 30% lift in the North American email purchase rate, is now live in the UK, and will continue to roll out to most of the top European markets by Q2 2013

EMAIL - YOUR PERSONALIZED DEAL DELIVERY

• Launched in New York and Chicago in November 2012, Deal marketplace is the world’s first local e-commerce marketplace featuring a massive selection where customers can browse or search for deals on demand

• Deal marketplace, made up of Daily Deal features and the massive inventory of active deals known as Deal Bank, is an accumulation of nearly 37,000 deals in North America as of Dec. 31

• On the ‘Local’ tab of Groupon.com (‘Featured’ tab on mobile), subscribers can search the inventory of daily deals, Deal Bank deals and real-time offers by keyword and location

• Of the merchants featured in North America in Q4 2012, 84% continued to run deals in Deal Bank as of the end of February 2013

• Deal Bank drives about 50% of North American local transactions volume as of the end of February 2013

• Deal marketplace has since become available in many cities across North America

GROUPON’S DEAL MARKETPLACE - DEALS ON DEMAND!

2

Q4 2012 FACT SHEET




Market 1st Deal Sold

11. Sweden May, 2010

12. Poland May, 2010

13. Turkey May, 2010

14. Finland May, 2010

15. Ireland May, 2010

16. Norway May, 2010

17. Belgium May, 2010

18. Chile Jun, 2010

19. Greece Jun, 2010

20. Portugal Jun, 2010


1. United States Oct, 2008

2. Canada Apr, 2010

3. Germany May, 2010

4. UK May, 2010

5. France May, 2010

6. Austria May, 2010

7. Italy May, 2010

8. Spain May, 2010

9. Netherlands May, 2010

10. Switzerland May, 2010

(England, Scotland, Wales & NI)


21. Argentina Jun, 2010

22. Brazil Jun, 2010

23. Mexico Jun, 2010

24. Colombia Jun, 2010

25. Japan Aug, 2010

26. Russia Aug, 2010

27. Peru Sep, 2010

28. Taiwan Nov, 2010

29. Hong Kong Nov, 2010

30. Singapore Nov, 2010


31. Philippines Nov, 2010

32. Uruguay Nov, 2010

33. Israel Dec, 2010

34. South Africa Jan, 2011

35. Malaysia Jan, 2011

36. India Jan, 2011

37. Romania Jan, 2011

38. Ukraine Jan, 2011

39. Australia Feb, 2011

40. South Korea Mar, 2011


41. UAE Mar, 2011

42. China Mar, 2011

43. Indonesia Apr, 2011

* Puerto Rico Apr, 2011

44. New Zealand May, 2011

45. Morocco Jul, 2011

46. Denmark Sep, 2011

47. Panama Oct, 2011

48. Thailand Mar, 2012

ANATOMY OF A GROUPON DEAL

Deals sourced from high-quality merchants willing to provide discounts (e.g., $20 for $40 in value at local retailer)

Groupon offers sent to subscribers via email or browsed by consumers on the website or mobile app• 2000+ individual types of goods and services• Running nearly 37,000 active deals in North America

Featured MerchantsOver 500,000 merchants partners

Consumers41 million active customers (Dec. 31)

• North America: Groupon typically pays merchants in installments within 60 days after the Groupon is sold

• International: Merchants typically paid when the customer redeems the Groupon

Groupon pays merchants Customers able to buy deals by location and keyword on the website and mobile app

• Local Deals• Goods

5

Redeem goods or services

from merchants

4

2

3

1

Since 2008, Groupon has experienced record-setting growth, expanding from its first market in Chicago to operations in 48 countries and 500+ markets worldwide. Countries where Groupon holds the #1 market segment share 1 are highlighted in green.

GLOBAL FOOTPRINT

3

• Live• Getaways

1 Based on currently-known data; missing many competitors and markets where data is unavailable. As of Q4 2012.



Q4 2012 FACT SHEET


GROUPON MERCHANT AND CUSTOMER SATISFACTION THIRD-PARTY DATA

1 ForeSee Groupon Merchant Satisfaction Study, February 2013 (commissioned by Groupon)2 Visit GrouponWorks.com for hundreds of case studies and video testimonials from merchants3 ForeSee Groupon Customer Satisfaction Study, February 2013 (commissioned by Groupon)4 ForeSee Daily Deal Commentary, February 2012 (Independent Study)5 Utpal M. Dholakia, Rice University, July 20126 Ipsos; Groupon Merchant Study, September 2011 (commissioned by Groupon)7 The Nielsen Company; Groupon Customer Value Study, September 2011 (commissioned by Groupon)8 ForeSee Satisfaction Study of Top 100 Online Retailers, May 2012 (Independent Study)9 ForeSee Annual E-Business Report for ACSI, July 2012 (Independent Study)

“I would say that the percentage of repeat Groupon customers is close to 60-65%.”

— Aaron Hasley. Co-Owner, Wine & Palette Oklahoma City, OK 2

Groupon earns high marks in merchant satisfaction, improving scores across the globe• Merchant Satisfaction: Groupon’s February 2013 U.S. merchant

satisfaction score continues to remain best-in-class, well above traditional B2B services. 1

• International Satisfaction Continues to Improve: Groupon improved both MSAT and CSAT scores in almost every international country over the last six months (12/31). 1,2

Groupon earns high marks in customer satisfaction, which drives customers to return to merchants again

Groupon Customer Satisfaction Ranks High Relative to Benchmarks and Respected Brands 3,8,9

EcommerceAggregate

ForeSee top 100 Internet Retailers

Fortune 500

84

“I’ve tried advertising in different ways, but Groupon helped me grow more than anything else I’ve done.”

— Carla Ciccarelli. Owner, Dream DinnersModesto, CA 2

“Groupon provided us with more customers than all the other companies put together.”

— Scott Edwards. Owner, Sharkarosa Wildlife Ranch, Pilot Point, TX 2

4

76 85 77 70 80 82 79 72

84 Groupon’s February 2013 CSAT score, placing the company among the highest e-commerce companies 3

91% of daily deal customers have already or plan to conduct business with the merchant again in the near future 4

• Drives Customer Traffic: 74% of merchants indicate Groupon customers bring friends. 6

• Customers Spread the Word: Groupon experiences go viral, as 51% of customers who visited a merchant with a Groupon told others about the Groupon purchase. 7

• Enhances Perception / Awareness of Merchant: 72% of Groupon business owners say Groupon has enhanced the perception of their business. 6

of the customers from daily deals are new customers 58 10out

of

80% of customers spend beyond the value of the deal 5

Q4 2012 FACT SHEET




CATEGORIES AND MERCHANT TOOLS

Groupon’s diverse categories and integrated Merchant Operating System tools continue to help merchants grow

Cate

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Groupon Local - www.groupon.com• Groupon offers consumers incredible deals on the best stuff to eat, see, do and buy in 48 countries• Subscribers are emailed deals customized for them each day by Groupon’s Smart Deals email

personalization technology (currently available in NA; rolling out in select international markets), which includes input subscribers submit on their interests and curiosities

• Local deals are available in the deal marketplace on Groupon.com and Groupon Mobile, searchable by keyword and location

• Local deals make up a large part of Groupon’s 2,000+ individual types of goods and services featured in nearly 37,000 active deals in North America

• Groupon Local is a platform that works for everyone from national brands to small businesses• Groupon Local deals can be purchased in all of Groupon’s 48 countries and 500+ markets

Groupon Goods - www.groupon.com/goods• Launched in September 2011 in select North American and International markets• Consumer products featuring a variety of categories, including electronics, home and garden and toys• 4.3 million customers as of September 2012• Reached a seasonally strong annual run rate of $2 billion in global billings in Q4 2012• Black Friday 2012 was the biggest four-day weekend of sales since the inception of Groupon Goods

Groupon Getaways - www.groupon.com/getaways• Launched in July 2011• Groupon’s strategic partnership with Expedia to offer travel deals • Deals featuring personally curated offers from top travel partners – hotels, packages, airfare and beyond• In Q1 2012, 30% of Getaway purchases in North America were first-time Groupon customers

GrouponLive and G-Pass - www.groupon.com/live• GrouponLive launched in May 2011, G-Pass in April 2012• Partnership with Live Nation whereby Groupon serves as a local resource for LiveNation events and clients

of its global ticketing business, Ticketmaster• G-Pass allows GrouponLive customers to bypass the box office line and go straight to the entrance

Breadcrumb POS - www.breadcrumbpos.com• Launched nationwide in October 2012• A point-of-sale (POS) solution that runs on iPads for restaurants, bars and cafes• Plans start as low as $99 per month and include free installation and 24/7 phone and email support

Groupon Payments - www.grouponworks.com/payments• Launched nationwide September 2012; integrated into Breadcrumb POS• A payments service backed by a guarantee to be the lowest cost option for merchants to accept credit

cards, built into the latest version of the Groupon Merchants app for the iPhone and iPod Touch• Swiped transaction rates - MasterCard, Visa and Discover (1.8% plus $0.15 per transaction) and American

Express (3% plus $0.15 per transaction)

Groupon Rewards - www.groupon.com/joinrewards (consumers); www.groupon.com/merchants/rewards (merchants)• Launched nationwide May 2012• Easy-to-use loyalty program that allows customers to earn free Groupon Rewards vouchers by making

purchases at Rewards-enrolled businesses

Groupon Scheduler - www.groupon.com/scheduler• Launched in December 2011, released nationwide and in select countries in March 2012• Complete online booking system to track appointments available free of charge to merchants

Groupon Merchant Center - https://merchants.groupon.com• Dashboard that provides merchants with comprehensive real-time view of customer insights, feedback

and performance measurement across Groupon campaigns; tracks customer comments, customer acquisition, incremental customer spending and ROI from Groupon marketing services

GrouponWorks - www.grouponworks.com• Launched new redesigned version in July 2012• Features Groupon’s entire suite of marketing products and services for merchants and hundreds of case

studies and video testimonials from merchants

Groupon Grassroots - www.grassroots.groupon.com• First launched as G-Team in 2010, relaunched as Groupon Grassroots in April 2012• Raised over $3 million towards activating citizenship and fostering neighborhood advancement• 100% of all funds raised go directly to the defined organizations - Groupon does not take a cut!

Groupon Getaways

Groupon Goods

GrouponWorks

Groupon Payments

Groupon Rewards

Groupon Merchant Center

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Breadcrumb POS

Reso

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https://www.grouponworks.com/merchant-solutions/payments

Groupon q4 2012 public fact sheet

Economy & Finance

Transcript of Groupon q4 2012 public fact sheet