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Groupon Q1 Earnings Lag Estimates, Revenues Flat Year Over Year
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Key Takeaways
GRPN posted a Q1 loss of 32 cents per share as revenue stayed flat year over year.
Groupon saw strong international local growth, led by double-digit billings gains in key markets.
GRPN maintained FY26 guidance for up to 5% revenue growth and at least $60M free cash flow.
Groupon (GRPN - Free Report) posted a loss of 32 cents per share for the first quarter of 2026, falling short of the Zacks Consensus Estimate of a loss of 2 cents per share. The company had reported earnings of 18 cents per share from continuing operations in the year-ago quarter.
Revenues of $117.2 million were essentially in line with the Zacks Consensus Estimate, coming in 0.05% below. The figure was flat year over year (down 2.1% on an FX-neutral basis). The top-line performance was supported by continued strength in Things to Do and paid channel growth, partially offset by headwinds in the Small Business merchant base, Health Beauty and Wellness, the Enterprise channel and managed and organic channels, as well as adverse weather conditions in January and February.
Region-wise, North America’s revenues of $90 million missed the consensus mark by 1.91% and declined 1.1% year over year. International revenues of $27.29 million beat the consensus mark by 4.51% and increased 4.7% year over year (declined 4.8% on an FX-neutral basis)
Gross billings totaled $382.5 million in the first quarter of 2026, reflecting a 1% year-over-year decline (down 3.3% on an FX-neutral basis).
Local revenues of $110.1 million missed the Zacks Consensus Estimate by 0.27% and rose 1.6% year over year. North America Local revenues of $85.5 million declined 0.5% year over year and missed the consensus mark by 2.47%. North America Local billings of $260.6 million grew 2% year over year, driven by higher average order value and continued Things to Do momentum, partially offset by a 4% unit decline and take rate compression from higher promotional discounts.
International Local revenues of $24.6 million grew 9.7% year over year and beat the consensus mark by 6.87%, though revenues were flat on an FX-neutral basis. Excluding Giftcloud, International Local revenues grew 19% and International Local billings grew 14% year over year, with each of GRPN's four major International markets (the U.K., Germany, France and Spain) delivering double-digit billings growth.
Consolidated Travel revenues of $4.59 million beat the consensus mark by 3.8% and declined 9.2% year over year. North America Travel revenues declined 4.8% and International Travel revenues declined 20.5% year over year (down 28.4% on an FX-neutral basis). A notable bright spot was the Tours vertical, where new formats such as mystery trip packages and adventure itineraries generated meaningful customer engagement toward the end of the quarter.
On a consolidated basis, Goods revenues of $2.5 million declined 34.4% year over year (down 38.5% on an FX-neutral basis), consistent with GRPN's deliberate de-emphasis of the category. North America Goods revenues of $894 thousand declined 40.9% year over year. International Goods revenues of $1.6 million declined 30% year over year (down 36.9% on an FX-neutral basis). The Goods segment now represents only 2% of global revenues.
GRPN’s Customer Metrics
At the end of the first quarter, Groupon had 16.2 million active customers on a trailing-twelve-month basis, up 5% year over year. The metric missed the Zacks Consensus Estimate by 0.19%.
The company had approximately 10.98 million active customers based in North America, missing the consensus mark by 0.9%. GRPN had 5.23 million active international customers, beating the consensus mark by 1.34%.
Operating Details of GRPN
In the first quarter, Groupon's consolidated gross profit was flat year over year at $106 million, with gross margin steady at 90% of revenues. North America gross profit declined 1.1% year over year to $81.9 million, while International gross profit grew 3% year over year to $24.1 million (down 5.6% on an FX-neutral basis).
Consolidated gross margin was 90% of revenues, consistent with the prior quarter. Selling, general and administrative expenses rose 5% year over year to $73 million. Marketing expenses increased 6% year over year to $36.3 million, representing 31% of revenues, reflecting higher investment in paid performance channels.
GRPN reported a GAAP operating loss of $3.3 million compared with operating income of $1.9 million in the year-ago quarter. Adjusted EBITDA declined 17% year over year to $12.8 million.
GRPN's Balance Sheet & Cash Flow
Groupon exited the first quarter with cash and cash equivalents of $225.5 million, down from $296.1 million as of Dec. 31, 2025.
In the first quarter, operating cash outflow from continuing operations was $10 million, reflecting the normal seasonal timing of merchant payment settlements, compared with cash provided by operating activities of $56.6 million in the prior quarter.
Free cash flow was negative $13.5 million compared with positive $53 million in the fourth quarter of 2025.
During the quarter, GRPN repurchased 1.94 million shares for $21.3 million. As of May 7, 2026, approximately $215 million remains available under the board-authorized $300 million repurchase program.
GRPN's Q2 & FY26 Guidance
For the second quarter of 2026, Groupon expects revenues in the range of $126 million to $128 million, suggesting flat to 2% year-over-year growth. Adjusted EBITDA is expected to be between $13 million and $15 million, and free cash flow is expected to be at least $10 million.
Groupon maintains its prior guidance, expecting revenues between $513 million and $523 million, indicating year-over-year growth of 3% to 5%. Adjusted EBITDA is expected to be between $70 million and $75 million, and free cash flow is expected to be at least $60 million.
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Groupon Q1 Earnings Lag Estimates, Revenues Flat Year Over Year
Key Takeaways
Groupon (GRPN - Free Report) posted a loss of 32 cents per share for the first quarter of 2026, falling short of the Zacks Consensus Estimate of a loss of 2 cents per share. The company had reported earnings of 18 cents per share from continuing operations in the year-ago quarter.
Revenues of $117.2 million were essentially in line with the Zacks Consensus Estimate, coming in 0.05% below. The figure was flat year over year (down 2.1% on an FX-neutral basis). The top-line performance was supported by continued strength in Things to Do and paid channel growth, partially offset by headwinds in the Small Business merchant base, Health Beauty and Wellness, the Enterprise channel and managed and organic channels, as well as adverse weather conditions in January and February.
Region-wise, North America’s revenues of $90 million missed the consensus mark by 1.91% and declined 1.1% year over year. International revenues of $27.29 million beat the consensus mark by 4.51% and increased 4.7% year over year (declined 4.8% on an FX-neutral basis)
Gross billings totaled $382.5 million in the first quarter of 2026, reflecting a 1% year-over-year decline (down 3.3% on an FX-neutral basis).
Groupon, Inc. Price, Consensus and EPS Surprise
Groupon, Inc. price-consensus-eps-surprise-chart | Groupon, Inc. Quote
GRPN’s Quarterly Details
Local revenues of $110.1 million missed the Zacks Consensus Estimate by 0.27% and rose 1.6% year over year. North America Local revenues of $85.5 million declined 0.5% year over year and missed the consensus mark by 2.47%. North America Local billings of $260.6 million grew 2% year over year, driven by higher average order value and continued Things to Do momentum, partially offset by a 4% unit decline and take rate compression from higher promotional discounts.
International Local revenues of $24.6 million grew 9.7% year over year and beat the consensus mark by 6.87%, though revenues were flat on an FX-neutral basis. Excluding Giftcloud, International Local revenues grew 19% and International Local billings grew 14% year over year, with each of GRPN's four major International markets (the U.K., Germany, France and Spain) delivering double-digit billings growth.
Consolidated Travel revenues of $4.59 million beat the consensus mark by 3.8% and declined 9.2% year over year. North America Travel revenues declined 4.8% and International Travel revenues declined 20.5% year over year (down 28.4% on an FX-neutral basis). A notable bright spot was the Tours vertical, where new formats such as mystery trip packages and adventure itineraries generated meaningful customer engagement toward the end of the quarter.
On a consolidated basis, Goods revenues of $2.5 million declined 34.4% year over year (down 38.5% on an FX-neutral basis), consistent with GRPN's deliberate de-emphasis of the category. North America Goods revenues of $894 thousand declined 40.9% year over year. International Goods revenues of $1.6 million declined 30% year over year (down 36.9% on an FX-neutral basis). The Goods segment now represents only 2% of global revenues.
GRPN’s Customer Metrics
At the end of the first quarter, Groupon had 16.2 million active customers on a trailing-twelve-month basis, up 5% year over year. The metric missed the Zacks Consensus Estimate by 0.19%.
The company had approximately 10.98 million active customers based in North America, missing the consensus mark by 0.9%. GRPN had 5.23 million active international customers, beating the consensus mark by 1.34%.
Operating Details of GRPN
In the first quarter, Groupon's consolidated gross profit was flat year over year at $106 million, with gross margin steady at 90% of revenues. North America gross profit declined 1.1% year over year to $81.9 million, while International gross profit grew 3% year over year to $24.1 million (down 5.6% on an FX-neutral basis).
Consolidated gross margin was 90% of revenues, consistent with the prior quarter. Selling, general and administrative expenses rose 5% year over year to $73 million. Marketing expenses increased 6% year over year to $36.3 million, representing 31% of revenues, reflecting higher investment in paid performance channels.
GRPN reported a GAAP operating loss of $3.3 million compared with operating income of $1.9 million in the year-ago quarter. Adjusted EBITDA declined 17% year over year to $12.8 million.
GRPN's Balance Sheet & Cash Flow
Groupon exited the first quarter with cash and cash equivalents of $225.5 million, down from $296.1 million as of Dec. 31, 2025.
In the first quarter, operating cash outflow from continuing operations was $10 million, reflecting the normal seasonal timing of merchant payment settlements, compared with cash provided by operating activities of $56.6 million in the prior quarter.
Free cash flow was negative $13.5 million compared with positive $53 million in the fourth quarter of 2025.
During the quarter, GRPN repurchased 1.94 million shares for $21.3 million. As of May 7, 2026, approximately $215 million remains available under the board-authorized $300 million repurchase program.
GRPN's Q2 & FY26 Guidance
For the second quarter of 2026, Groupon expects revenues in the range of $126 million to $128 million, suggesting flat to 2% year-over-year growth. Adjusted EBITDA is expected to be between $13 million and $15 million, and free cash flow is expected to be at least $10 million.
Groupon maintains its prior guidance, expecting revenues between $513 million and $523 million, indicating year-over-year growth of 3% to 5%. Adjusted EBITDA is expected to be between $70 million and $75 million, and free cash flow is expected to be at least $60 million.
Zacks Rank & Stocks to Consider
Groupon currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader Zacks Retail-Wholesale sector are FGI Industries (FGI - Free Report) , Dillard’s (DDS - Free Report) and Canada Goose (GOOS - Free Report) . FGI Industries sports a Zacks Rank #1 (Strong Buy) at present, while Dillard’s and Canada Goose carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
FGI Industries is set to report first-quarter 2026 results on May 12. FGI shares have increased 17% year to date.
Dillard’s is set to report first-quarter fiscal 2027 results on May 21. DDS shares have declined 8.8% year to date.
Canada Goose is set to report fourth-quarter 2026 results on May 20. GOOS shares have declined 7.9% year to date.