A month has gone by since the last earnings report for Groupon (GRPN Quick QuoteGRPN - Free Report) . Shares have lost about 17.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Groupon due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Groupon Posts Wider Loss in Q2, Revenues Down Y/Y

Groupon reported a second-quarter 2022 non-GAAP loss of 34 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 24 cents. The company had reported non-GAAP earnings of 33 cents per share in the year-ago quarter.

Revenues of $153.2 million missed the Zacks Consensus Estimate by 11.95%. The figure declined 42.4% on a year-over-year basis (down 41% excluding the foreign exchange effect).

Region-wise, North America revenues plunged 30% year over year to $112.1 million. International revenues fell 61% (down 56% excluding the foreign exchange effect) year over year to $41.1 million.

Quarterly Details

Service revenues were down 25.7% year over year to $153.2 million.

Local revenues of $133.6 million declined 26% year over year (down 24% excluding the foreign exchange effect). North America Local revenues decreased 27.4% while International Local revenues decreased 11.1% year over year.
 
Consolidated Travel revenues decreased 30.2% year over year to $7.68 million. North America Travel revenues declined 45.3% year over year. International Travel revenues increased 5.5% in the reported quarter.

On a consolidated basis, Goods revenues declined 82.9% year over year to $11.95 million. North America Goods revenues declined 51.5% while International Goods revenues plunged 89.5%, excluding foreign exchange effect, on a year-over-year basis.

Customer Metrics

At the end of the second quarter, Groupon had approximately 21.1 million active customers compared with 22.2 million at the end of the previous quarter.

At the end of the second quarter, the company had approximately 13.1 million active customers based in North America and 8 million active international customers.

Operating Details

In the second quarter, gross profit came in at $134 million, down 30.9% year over year.

Selling, general and administrative expenses fell 10.2% year over year to $123.9 million in the reported quarter. Marketing expenses decreased 32.8% year over year to $29.4 million.

The company reported an operating loss of $66.5 million compared with a loss of $2 million in the year-ago quarter.

Balance Sheet & Cash Flow

Groupon exited the quarter ending Jun 30, 2022, with cash and cash equivalents of $315.6 million, down from $403 million as of Mar 31, 2022.

In the second quarter, the company used $30.2 million of operating cash flow compared with $78.1 million generated in the prior quarter.
 
Groupon reported a free cash outflow of $39.3 million compared to $91.1 million of free cash flow reported in the previous quarter.

Guidance

Groupon has withdrawn its previously issued full-year 2022 revenue and adjusted EBITDA guidance, given its turnaround strategy as well as uncertain macroeconomic environment.

For the full year of 2023, Groupon expects a free cash flow of $100 million and an adjusted EBITDA margin of 15-20%.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

Currently, Groupon has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Groupon has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.