GRPN — Groupon, Inc.

Summary of Groupon's Q1 2026 Earnings Call

1. Key Financial Results and Metrics:

• Global Billings: $383 million, down 1% year-over-year, slightly below guidance.
• Revenue: $117 million, flat year-over-year, within guidance range.
• Adjusted EBITDA: $12.8 million, slightly below guidance; includes $2 million in severance costs due to a 5% headcount reduction.
• Free Cash Flow: Not explicitly stated but expected to be at least $60 million for the full year.
• Share Buybacks: 2.8 million shares repurchased for $29.7 million at an average price of $10.58.

2. Strategic Updates and Business Highlights:

• Project Foundry: A major initiative to transform Groupon into an AI-native company, embedding AI across all functions to enhance operational speed and efficiency.
• AI Initiatives: Piloting AI voice agents for merchant outreach and deploying AI-driven marketing strategies. Expecting all leaders to utilize AI agents by the end of Q2.
• Platform Upgrades: Successful deployment of new iOS and Android apps, and a customer data platform aimed at improving customer lifetime value.
• International Performance: Strong growth in international markets, although facing challenges in specific regions like the Emirates.

3. Forward Guidance and Outlook:

• Full Year Guidance: Billing growth of 3% to 5%, revenue between $513 million and $523 million, and adjusted EBITDA of $70 million to $75 million.
• Q2 Guidance: Billings flat to up 2%, revenue between $126 million and $128 million, and adjusted EBITDA of $13 million to $15 million. Cautious due to tough comparisons with previous large enterprise campaigns.

4. Bad News, Challenges, or Points of Concern:

• Headwinds: Notable challenges in North America local markets, including a slowdown in small and medium business (SMB) merchant acquisition and a decline in enterprise performance.
• Weather Impact: Severe winter weather in January and February contributed to performance pressures.
• Declining Metrics: First quarter showed a deceleration in health, beauty, and wellness categories after four quarters of growth.

5. Notable Q&A Insights:

• Merchant Acquisition Challenges: CEO Dusan Senkypl acknowledged that weather and SEO headwinds affected SMB merchant acquisition, but expressed optimism about AI's potential to enhance outreach efforts.
• AI Voice Agents: Initial feedback on AI calls has been positive, with the technology improving to the point where it is indistinguishable from human interaction.
• Cost Reduction vs. Growth: While headcount reductions are planned, the focus is on operational efficiency rather than cost-cutting due to financial distress.
• Capital Allocation: If liquidity from SumUp's potential IPO materializes, Groupon will consider share buybacks and investments in growth opportunities.

Overall, Groupon's Q1 2026 results reflect a mix of challenges and strategic initiatives aimed at leveraging AI to drive future growth, despite current pressures in key markets.