• | Fourth quarter gross profit of $386.9 million, $1.33 billion for the full year |
• | Fourth quarter net income from continuing operations of $51.1 million, $28.6 million for the full year |
• | Fourth quarter Adjusted EBITDA of $105.3 million, $249.9 million for the full year |
• | Fourth quarter GAAP earnings per diluted share from continuing operations of $0.08, non-GAAP earnings per diluted share of $0.07 for the fourth quarter |
• | Fourth quarter operating cash flow of $270.6 million, $137.5 million for the full year |
• | Fourth quarter free cash flow of $255.1 million, $78.3 million for the full year |
• | 2018 Adjusted EBITDA guidance of $260 million to $270 million |
• | North America gross profit in the fourth quarter 2017 increased 6% to $265.0 million from $250.8 million in the fourth quarter 2016. In Local, gross profit increased 6% to $196.7 million driven by continued benefits from our marketing investment and larger customer base. Goods gross profit increased 8% to $54.7 million driven by solid performance during the holiday season. Gross Profit in Travel was $13.6 million versus $15.1 million in the fourth quarter 2016. |
• | During the quarter we continued to make improvements to the customer experience by investing in our voucherless initiatives. We now have approximately 2.7 million cards linked in Groupon+, one of our leading voucherless initiatives, and continue to deepen supply in our more than 25 Groupon+ markets. |
• | North America active customers reached 32.7 million as of December 31, 2017, reflecting the addition of 200 thousand net new active customers during the fourth quarter 2017. Active customers represent unique user accounts that have made a purchase during the trailing twelve months either through one of our online marketplaces or directly with a merchant for which we earned a commission. |
• | International gross profit increased 21% (12% FX-neutral) in the fourth quarter 2017 to $121.9 million. Gross profit increased 19% (11% FX-neutral) in Local, 33% (22% FX-neutral) in Goods, and 2% (5% FX-neutral decline) in Travel. We continue to focus on execution of our product, supply, and marketing initiatives, and these initiatives contributed to our positive fourth quarter results in International. |
• | International active customers increased by 200 thousand net new active customers during the fourth quarter 2017 to 16.8 million as of December 31, 2017. |
• | Gross billings were $1.58 billion in the fourth quarter 2017, down 2% (4% FX-neutral) from $1.61 billion in the fourth quarter 2016. Gross billings reflect the total dollar value of customer purchases of goods and services. |
• | Revenue was $873.2 million in the fourth quarter 2017, down 4% (6% FX-neutral) from $904.9 million in the fourth quarter 2016 reflecting our continued focus on maximizing gross profit, including the shift toward offerings in our higher margin, more differentiated Local category, from our Goods category. These strategic actions are expected to continue to create a headwind for revenue. |
• | Gross profit was $386.9 million in the fourth quarter 2017, up 10% (8% FX-neutral) from $351.9 million in the fourth quarter 2016. |
• | SG&A declined 6% year-over-year to $224.7 million in the fourth quarter 2017 as we continue to realize operating leverage from our previously completed restructuring actions. |
• | Marketing expense was $112.5 million in the fourth quarter 2017, up 24% year-over-year. We generated strong results from our offline marketing including our campaigns focused on the holiday season and Groupon local merchants, which aired in the fourth quarter. |
• | Net income from continuing operations was $51.1 million in the fourth quarter 2017. This compares to a net loss of $39.5 million in the fourth quarter 2016. |
• | Net income attributable to common stockholders was $47.7 million, or $0.08 per diluted share. Non-GAAP net income attributable to common stockholders was $42.7 million, or $0.07 per diluted share. |
• | Adjusted EBITDA, a non-GAAP financial measure, was $105.3 million in the fourth quarter 2017, up 31% from $80.2 million in the fourth quarter 2016. This result is the highest quarterly Adjusted EBITDA in our history and was driven by our focus on optimizing gross profit combined with operating leverage from previously implemented streamlining initiatives. |
• | Global units sold declined 6% year-over-year to 54.6 million in the fourth quarter 2017, as we leveraged demand on our site and mobile app to maximize gross profit, which in some instances resulted in fewer units. Units in North America were down 7% with a significant portion of that decline due to the divestiture of certain OrderUp assets and investments in scaling Groupon+. Units are defined as purchases before refunds and cancellations made either through one of our online marketplaces or directly with a merchant for which we earned a commission. |
• | Operating cash flow was $270.6 million in the fourth quarter 2017. Free cash flow, a non-GAAP financial measure, was $255.1 million in the fourth quarter 2017. |
• | Cash and cash equivalents as of December 31, 2017 were $880.1 million, and we had no outstanding borrowings under our $250.0 million revolving credit facility. |
• | Gross Billings were $5.65 billion in 2017, down 1% compared with $5.69 billion in 2016. |
• | Revenue was $2.84 billion in 2017, down 6% compared with $3.01 billion in 2016. |
• | Gross profit was $1.33 billion in 2017, up 4% compared with $1.28 billion in 2016. |
• | Net income from continuing operations was $28.6 million in 2017, compared with a net loss of $166.2 million in 2016. |
• | Net income attributable to common stockholders was $14.0 million, or $0.02 per diluted share. Non-GAAP net income attributable to common stockholders was $70.0 million, or $0.11 per diluted share. |
• | Adjusted EBITDA was $249.9 million in 2017, up 39% compared with $179.9 million in 2016. |
• | Global units sold declined 3% year-over-year to 188.9 million in 2017. |
• | Operating cash flow for 2017 was $137.5 million. Free cash flow, a non-GAAP financial measure, was $78.3 million in 2017. |
• | In 2017, we repurchased 16,906,334 shares of our common stock for an aggregate purchase price of approximately $60.0 million. Up to $135.2 million of common stock remains available for repurchase under Groupon’s share repurchase program as of December 31, 2017. The timing and amount of share repurchases, if any, will be determined based on market conditions, limitations under our Amended and Restated Credit Agreement, share price and other factors, and the program may be terminated at any time. |
• | stock-based compensation, |
• | amortization of acquired intangible assets, |
• | acquisition-related expense (benefit), net, |
• | special charges and credits, including restructuring charges, |
• | non-cash interest expense on convertible senior notes, |
• | non-operating foreign currency gains and losses related to intercompany balances and reclassifications of cumulative translation adjustments to earnings as a result of business dispositions or country exits, |
• | non-operating gains and losses from minority investments that we have elected to record at fair value with changes in fair value reported in earnings, |
• | non-operating gains and losses from the sale of minority investments, and |
• | income (loss) from discontinued operations. |
December 31, | |||||||
2017 | 2016 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 880,129 | $ | 862,977 | |||
Accounts receivable, net | 98,294 | 71,272 | |||||
Prepaid expenses and other current assets | 94,025 | 94,441 | |||||
Current assets of discontinued operations | — | 63,246 | |||||
Total current assets | 1,072,448 | 1,091,936 | |||||
Property, equipment and software, net | 151,145 | 169,452 | |||||
Goodwill | 286,989 | 274,551 | |||||
Intangible assets, net | 19,196 | 42,915 | |||||
Investments (including $109,751 and $110,066 at December 31, 2017 and December 31, 2016, respectively, at fair value) | 135,189 | 141,882 | |||||
Other non-current assets | 12,538 | 28,635 | |||||
Non-current assets of discontinued operations | — | 12,006 | |||||
Total Assets | $ | 1,677,505 | $ | 1,761,377 | |||
Liabilities and Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 31,968 | $ | 28,551 | |||
Accrued merchant and supplier payables | 770,335 | 770,992 | |||||
Accrued expenses and other current liabilities | 331,196 | 366,456 | |||||
Current liabilities held of discontinued operations | — | 47,052 | |||||
Total current liabilities | 1,133,499 | 1,213,051 | |||||
Convertible senior notes, net | 189,753 | 178,995 | |||||
Other non-current liabilities | 102,408 | 101,342 | |||||
Non-current liabilities of discontinued operations | — | 2,927 | |||||
Total Liabilities | 1,425,660 | 1,496,315 | |||||
Commitments and contingencies | |||||||
Stockholders' Equity | |||||||
Common stock, par value $0.0001 per share, 2,010,000,000 shares authorized; 748,541,862 shares issued and 559,939,620 shares outstanding at December 31, 2017; 736,531,771 shares issued and 564,835,863 shares outstanding at December 31, 2016 | 75 | 74 | |||||
Additional paid-in capital | 2,174,708 | 2,112,728 | |||||
Treasury stock, at cost, 188,602,242 shares at December 31, 2017 and 171,695,908 shares at December 31, 2016 | (867,450 | ) | (807,424 | ) | |||
Accumulated deficit | (1,088,204 | ) | (1,099,010 | ) | |||
Accumulated other comprehensive income (loss) | 31,844 | 58,052 | |||||
Total Groupon, Inc. Stockholders' Equity | 250,973 | 264,420 | |||||
Noncontrolling interests | 872 | 642 | |||||
Total Equity | 251,845 | 265,062 | |||||
Total Liabilities and Equity | $ | 1,677,505 | $ | 1,761,377 |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenue: | ||||||||||||||||
Third-party and other | $ | 346,568 | $ | 318,427 | $ | 1,266,452 | $ | 1,206,441 | ||||||||
Direct | 526,598 | 586,438 | 1,577,425 | 1,807,174 | ||||||||||||
Total revenue | 873,166 | 904,865 | 2,843,877 | 3,013,615 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Third-party and other | 37,601 | 36,025 | 160,810 | 150,031 | ||||||||||||
Direct | 448,647 | 516,934 | 1,349,206 | 1,582,931 | ||||||||||||
Total cost of revenue | 486,248 | 552,959 | 1,510,016 | 1,732,962 | ||||||||||||
Gross profit | 386,918 | 351,906 | 1,333,861 | 1,280,653 | ||||||||||||
Operating expenses: | ||||||||||||||||
Marketing | 112,462 | 90,952 | 400,918 | 352,175 | ||||||||||||
Selling, general and administrative | 224,720 | 238,046 | 901,781 | 994,027 | ||||||||||||
Restructuring charges | 10 | 12,060 | 18,828 | 40,438 | ||||||||||||
Gain on sale of intangible assets | — | — | (17,149 | ) | — | |||||||||||
Gains on business dispositions | — | — | — | (11,399 | ) | |||||||||||
Acquisition-related expense (benefit), net | — | 1,345 | 48 | 5,650 | ||||||||||||
Total operating expenses | 337,192 | 342,403 | 1,304,426 | 1,380,891 | ||||||||||||
Income (loss) from operations | 49,726 | 9,503 | 29,435 | (100,238 | ) | |||||||||||
Other income (expense), net | (2,112 | ) | (54,737 | ) | 6,710 | (71,289 | ) | |||||||||
Income (loss) from continuing operations before provision (benefit) for income taxes | 47,614 | (45,234 | ) | 36,145 | (171,527 | ) | ||||||||||
Provision (benefit) for income taxes | (3,457 | ) | (5,779 | ) | 7,544 | (5,318 | ) | |||||||||
Income (loss) from continuing operations | 51,071 | (39,455 | ) | 28,601 | (166,209 | ) | ||||||||||
Income (loss) from discontinued operations, net of tax | (223 | ) | (10,749 | ) | (1,974 | ) | (17,114 | ) | ||||||||
Net income (loss) | 50,848 | (50,204 | ) | 26,627 | (183,323 | ) | ||||||||||
Net income attributable to noncontrolling interests | (3,127 | ) | (2,384 | ) | (12,587 | ) | (11,264 | ) | ||||||||
Net income (loss) attributable to Groupon, Inc. | $ | 47,721 | $ | (52,588 | ) | $ | 14,040 | $ | (194,587 | ) | ||||||
Basic net income (loss) per share (1): | ||||||||||||||||
Continuing operations | $ | 0.09 | $ | (0.07 | ) | $ | 0.03 | $ | (0.31 | ) | ||||||
Discontinued operations | (0.00 | ) | (0.02 | ) | (0.00 | ) | (0.03 | ) | ||||||||
Basic net income (loss) per share | $ | 0.09 | $ | (0.09 | ) | $ | 0.03 | $ | (0.34 | ) | ||||||
Diluted net income (loss) per share (1): | ||||||||||||||||
Continuing operations | $ | 0.08 | $ | (0.07 | ) | $ | 0.03 | $ | (0.31 | ) | ||||||
Discontinued operations | (0.00 | ) | (0.02 | ) | (0.01 | ) | (0.03 | ) | ||||||||
Diluted net income (loss) per share | $ | 0.08 | $ | (0.09 | ) | $ | 0.02 | $ | (0.34 | ) | ||||||
Weighted average number of shares outstanding (1) | ||||||||||||||||
Basic | 558,170,245 | 570,546,159 | 559,367,075 | 576,354,258 | ||||||||||||
Diluted | 570,734,081 | 570,546,159 | 568,418,371 | 576,354,258 |
(1) | The structure of the Company's common stock changed during the year ended December 31, 2016. For additional information, refer to Note 11, Stockholders' Equity, and Note 17, Income (Loss) per Share, in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Operating activities | |||||||||||||||
Net income (loss) | $ | 50,848 | $ | (50,204 | ) | $ | 26,627 | $ | (183,323 | ) | |||||
Less: Income (loss) from discontinued operations, net of tax | (223 | ) | (10,749 | ) | (1,974 | ) | (17,114 | ) | |||||||
Income (loss) from continuing operations | 51,071 | (39,455 | ) | 28,601 | (166,209 | ) | |||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization of property, equipment and software | 28,440 | 29,376 | 114,795 | 116,961 | |||||||||||
Amortization of acquired intangible assets | 5,410 | 5,305 | 23,032 | 18,948 | |||||||||||
Stock-based compensation | 21,726 | 22,763 | 82,044 | 115,123 | |||||||||||
Restructuring-related long-lived asset impairments | — | 283 | — | 328 | |||||||||||
Gains on business dispositions | — | — | — | (11,399 | ) | ||||||||||
Gain on sale of intangible assets | — | — | (17,149 | ) | — | ||||||||||
Gain on sale of investment | — | — | (7,624 | ) | — | ||||||||||
Impairment of investment | 2,944 | — | 2,944 | — | |||||||||||
Deferred income taxes | (242 | ) | (3,980 | ) | 603 | (10,448 | ) | ||||||||
(Gain) loss, net from changes in fair value of contingent consideration | — | (38 | ) | 48 | 4,092 | ||||||||||
(Gain) loss from changes in fair value of investments | (5,482 | ) | 40,840 | (382 | ) | 48,141 | |||||||||
Amortization of debt discount on convertible senior notes | 2,794 | 2,522 | 10,758 | 7,376 | |||||||||||
Change in assets and liabilities, net of acquisitions: | |||||||||||||||
Restricted cash | 4,315 | (985 | ) | 6,952 | (1,317 | ) | |||||||||
Accounts receivable | (19,580 | ) | (14,124 | ) | (18,793 | ) | (16,584 | ) | |||||||
Prepaid expenses and other current assets | 7,188 | 26,748 | 4,074 | 35,043 | |||||||||||
Accounts payable | 5,417 | 7,731 | (199 | ) | 5,121 | ||||||||||
Accrued merchant and supplier payables | 168,013 | 195,673 | (29,823 | ) | 26,729 | ||||||||||
Accrued expenses and other current liabilities | (965 | ) | 16,199 | (40,361 | ) | (32,124 | ) | ||||||||
Other, net | (485 | ) | 5,735 | (22,023 | ) | (10,853 | ) | ||||||||
Net cash provided by (used in) operating activities from continuing operations | 270,564 | 294,593 | 137,497 | 128,928 | |||||||||||
Net cash provided by (used in) operating activities from discontinued operations | (223 | ) | (5,931 | ) | (2,418 | ) | (11,823 | ) | |||||||
Net cash provided by (used in) operating activities | 270,341 | 288,662 | 135,079 | 117,105 | |||||||||||
Investing activities | |||||||||||||||
Purchases of property and equipment and capitalized software | (15,442 | ) | (19,254 | ) | (59,158 | ) | (68,287 | ) | |||||||
Cash derecognized upon dispositions of subsidiaries | — | — | — | (1,128 | ) | ||||||||||
Acquisitions of businesses, net of acquired cash | — | 15,479 | — | 14,539 | |||||||||||
Proceeds from sale of intangible assets | — | — | 18,333 | — | |||||||||||
Proceeds from sales and maturities of investments | — | — | 16,561 | 1,685 | |||||||||||
Acquisitions of intangible assets and other investing activities | (309 | ) | (274 | ) | (1,059 | ) | (2,395 | ) | |||||||
Net cash provided by (used in) investing activities from continuing operations | (15,751 | ) | (4,049 | ) | (25,323 | ) | (55,586 | ) | |||||||
Net cash provided by (used in) investing activities from discontinued operations | — | (1,718 | ) | (9,548 | ) | (1,900 | ) | ||||||||
Net cash provided by (used in) investing activities | (15,751 | ) | (5,767 | ) | (34,871 | ) | (57,486 | ) | |||||||
Financing activities | |||||||||||||||
Proceeds from issuance of convertible senior notes | — | — | — | 250,000 | |||||||||||
Issuance costs for convertible senior notes and revolving credit agreement | — | (50 | ) | — | (8,147 | ) | |||||||||
Purchase of convertible note hedges | — | — | — | (59,163 | ) | ||||||||||
Proceeds from issuance of warrants | — | — | — | 35,495 | |||||||||||
Payments for purchases of treasury stock | — | (49,738 | ) | (61,233 | ) | (165,357 | ) | ||||||||
Taxes paid related to net share settlements of stock-based compensation awards | (4,341 | ) | (6,450 | ) | (27,681 | ) | (29,777 | ) | |||||||
Proceeds from stock option exercises and employee stock purchase plan | 27 | 2 | 5,513 | 4,978 | |||||||||||
Distributions to noncontrolling interest holders | (3,383 | ) | (2,660 | ) | (12,357 | ) | (11,811 | ) | |||||||
Payments of contingent consideration related to acquisitions | — | — | (7,790 | ) | (285 | ) | |||||||||
Payments of capital lease obligations | (8,727 | ) | (8,637 | ) | (34,025 | ) | (30,598 | ) | |||||||
Other financing activities | — | — | (473 | ) | — | ||||||||||
Net cash provided by (used in) financing activities | (16,424 | ) | (67,533 | ) | (138,046 | ) | (14,665 | ) |
Effect of exchange rate changes on cash and cash equivalents, including cash classified within current assets of discontinued operations | 3,306 | (13,263 | ) | 26,124 | (6,470 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents, including cash classified within current assets of discontinued operations | 241,472 | 202,099 | (11,714 | ) | 38,484 | ||||||||||
Less: Net increase (decrease) in cash classified within current assets of discontinued operations | — | 1,202 | (28,866 | ) | (186 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | 241,472 | 200,897 | 17,152 | 38,670 | |||||||||||
Cash and cash equivalents, beginning of period | 638,657 | 662,080 | 862,977 | 824,307 | |||||||||||
Cash and cash equivalents, end of period | $ | 880,129 | $ | 862,977 | $ | 880,129 | $ | 862,977 |
Q4 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | |||||||||||||||||||||||
North America Segment: | Q4 2017 | ||||||||||||||||||||||||||
Gross Billings (2): | Y/Y Growth | ||||||||||||||||||||||||||
Local | $ | 590,684 | $ | 587,766 | $ | 615,833 | $ | 606,184 | $ | 605,460 | 2.5 | % | |||||||||||||||
Travel | 90,059 | 114,163 | 112,670 | 93,186 | 84,504 | (6.2) | |||||||||||||||||||||
Goods | 431,388 | 262,588 | 245,924 | 229,479 | 369,973 | (14.2) | |||||||||||||||||||||
Total Gross Billings | $ | 1,112,131 | $ | 964,517 | $ | 974,427 | $ | 928,849 | $ | 1,059,937 | (4.7) | % | |||||||||||||||
Revenue: | |||||||||||||||||||||||||||
Local | $ | 209,799 | $ | 200,545 | $ | 207,534 | $ | 194,090 | $ | 223,410 | 6.5 | % | |||||||||||||||
Travel | 19,023 | 20,462 | 22,320 | 18,300 | 17,413 | (8.5) | |||||||||||||||||||||
Goods | 421,931 | 252,350 | 222,058 | 201,824 | 333,862 | (20.9) | |||||||||||||||||||||
Total Revenue | $ | 650,753 | $ | 473,357 | $ | 451,912 | $ | 414,214 | $ | 574,685 | (11.7) | % | |||||||||||||||
Gross Profit: | |||||||||||||||||||||||||||
Local | $ | 185,280 | $ | 169,342 | $ | 179,609 | $ | 162,914 | $ | 196,708 | 6.2 | % | |||||||||||||||
Travel | 15,052 | 15,165 | 17,755 | 14,060 | 13,614 | (9.6) | |||||||||||||||||||||
Goods | 50,437 | 36,430 | 36,496 | 30,934 | 54,651 | 8.4 | |||||||||||||||||||||
Total Gross Profit | $ | 250,769 | $ | 220,937 | $ | 233,860 | $ | 207,908 | $ | 264,973 | 5.7 | % | |||||||||||||||
Operating income (loss) | $ | 12,265 | $ | (14,783 | ) | $ | (12,033 | ) | $ | (6,995 | ) | $ | 33,766 | 175.3 | % | ||||||||||||
International Segment: | Q4 2017 | ||||||||||||||||||||||||||
Gross Billings: | Y/Y Growth | FX Effect (3) | Y/Y Growth excluding FX (3) | ||||||||||||||||||||||||
Local | $ | 221,337 | $ | 191,219 | $ | 189,408 | $ | 202,991 | $ | 229,167 | 3.5 | % | (6.1) | (2.6) | % | ||||||||||||
Travel | 60,099 | 53,161 | 45,981 | 49,837 | 59,666 | (0.7) | (6.2) | (6.9) | |||||||||||||||||||
Goods | 211,963 | 149,079 | 154,417 | 159,820 | 233,422 | 10.1 | (8.8) | 1.3 | |||||||||||||||||||
Total Gross Billings | $ | 493,399 | $ | 393,459 | $ | 389,806 | $ | 412,648 | $ | 522,255 | 5.8 | % | (7.2) | (1.4) | % | ||||||||||||
Revenue: | |||||||||||||||||||||||||||
Local | $ | 68,900 | $ | 63,575 | $ | 66,108 | $ | 71,574 | $ | 80,209 | 16.4 | % | (7.6) | 8.8 | % | ||||||||||||
Travel | 12,141 | 11,002 | 10,796 | 9,801 | 12,187 | 0.4 | (6.7) | (6.3) | |||||||||||||||||||
Goods | 173,071 | 125,692 | 133,803 | 138,877 | 206,085 | 19.1 | (10.0) | 9.1 | |||||||||||||||||||
Total Revenue | $ | 254,112 | $ | 200,269 | $ | 210,707 | $ | 220,252 | $ | 298,481 | 17.5 | % | (9.2) | 8.3 | % | ||||||||||||
Gross Profit: | |||||||||||||||||||||||||||
Local | $ | 63,987 | $ | 59,194 | $ | 62,303 | $ | 67,860 | $ | 75,991 | 18.8 | % | (8.0) | 10.8 | % | ||||||||||||
Travel | 11,087 | 10,036 | 9,996 | 8,922 | 11,334 | 2.2 | (6.9) | (4.7) | |||||||||||||||||||
Goods | 26,063 | 19,284 | 21,908 | 24,735 | 34,620 | 32.8 | (10.6) | 22.2 | |||||||||||||||||||
Total Gross Profit | $ | 101,137 | $ | 88,514 | $ | 94,207 | $ | 101,517 | $ | 121,945 | 20.6 | % | (8.5) | 12.1 | % | ||||||||||||
Operating income (loss) | $ | (2,762 | ) | $ | 3,103 | $ | 4,635 | $ | 5,782 | $ | 15,960 | 677.8 | % | ||||||||||||||
Consolidated Results of Operations: | |||||||||||||||||||||||||||
Gross Billings: | |||||||||||||||||||||||||||
Local | $ | 812,021 | $ | 778,985 | $ | 805,241 | $ | 809,175 | $ | 834,627 | 2.8 | % | (1.7) | 1.1 | % | ||||||||||||
Travel | 150,158 | 167,324 | 158,651 | 143,023 | 144,170 | (4.0) | (2.5) | (6.5) | |||||||||||||||||||
Goods | 643,351 | 411,667 | 400,341 | 389,299 | 603,395 | (6.2) | (2.9) | (9.1) | |||||||||||||||||||
Total Gross Billings | $ | 1,605,530 | $ | 1,357,976 | $ | 1,364,233 | $ | 1,341,497 | $ | 1,582,192 | (1.5) | % | (2.2) | (3.7) | % | ||||||||||||
Revenue: | |||||||||||||||||||||||||||
Local | $ | 278,699 | $ | 264,120 | $ | 273,642 | $ | 265,664 | $ | 303,619 | 8.9 | % | (1.8) | 7.1 | % | ||||||||||||
Travel | 31,164 | 31,464 | 33,116 | 28,101 | 29,600 | (5.0) | (2.6) | (7.6) | |||||||||||||||||||
Goods | 595,002 | 378,042 | 355,861 | 340,701 | 539,947 | (9.3) | (2.9) | (12.2) | |||||||||||||||||||
Total Revenue | $ | 904,865 | $ | 673,626 | $ | 662,619 | $ | 634,466 | $ | 873,166 | (3.5) | % | (2.6) | (6.1) | % | ||||||||||||
Gross Profit: | |||||||||||||||||||||||||||
Local | $ | 249,267 | $ | 228,536 | $ | 241,912 | $ | 230,774 | $ | 272,699 | 9.4 | % | (2.0) | 7.4 | % | ||||||||||||
Travel | 26,139 | 25,201 | 27,751 | 22,982 | 24,948 | (4.6) | (2.9) | (7.5) | |||||||||||||||||||
Goods | 76,500 | 55,714 | 58,404 | 55,669 | 89,271 | 16.7 | (3.6) | 13.1 | |||||||||||||||||||
Total Gross Profit | $ | 351,906 | $ | 309,451 | $ | 328,067 | $ | 309,425 | $ | 386,918 | 9.9 | % | (2.4) | 7.5 | % | ||||||||||||
Operating income (loss) | $ | 9,503 | $ | (11,680 | ) | $ | (7,398 | ) | $ | (1,213 | ) | $ | 49,726 | 423.3 | % | ||||||||||||
Net cash provided by (used in) operating activities from continuing operations | $ | 294,593 | $ | (136,233 | ) | $ | (20,695 | ) | $ | 23,861 | $ | 270,564 | (8.2) | % | |||||||||||||
Free Cash Flow | $ | 275,339 | $ | (150,309 | ) | $ | (36,080 | ) | $ | 9,606 | $ | 255,122 | (7.3) | % |
Q4 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | |||||||||||||||||
Other Metrics: | |||||||||||||||||||||
Active Customers (4) | |||||||||||||||||||||
North America | 31.1 | 31.6 | 31.9 | 32.5 | 32.7 | ||||||||||||||||
International | 16.8 | 16.7 | 16.4 | 16.6 | 16.8 | ||||||||||||||||
Total Active Customers | 47.9 | 48.3 | 48.3 | 49.1 | 49.5 | ||||||||||||||||
TTM Gross Billings / Average Active Customer | |||||||||||||||||||||
North America | $ | 138 | $ | 136 | $ | 133 | $ | 129 | $ | 123 | |||||||||||
International | 102 | 101 | 101 | 102 | 102 | ||||||||||||||||
Consolidated | 124 | 123 | 121 | 120 | 116 | ||||||||||||||||
TTM Gross Profit / Average Active Customer | |||||||||||||||||||||
North America | $ | 31 | $ | 30 | $ | 30 | $ | 30 | $ | 29 | |||||||||||
International | 23 | 22 | 23 | 23 | 24 | ||||||||||||||||
Consolidated | 28 | 27 | 28 | 27 | 27 | ||||||||||||||||
Consolidated Units | 57.9 | 45.7 | 44.5 | 44.1 | 54.6 | ||||||||||||||||
Year-over-year unit growth: | |||||||||||||||||||||
North America | 3.2 | % | (0.4 | ) | % | (1.9 | ) | % | (0.1 | ) | % | (6.6 | ) | % | |||||||
International | (0.3 | ) | (8.7 | ) | (7.8 | ) | (1.5 | ) | (3.9 | ) | |||||||||||
Consolidated | 2.0 | (3.1 | ) | (3.8 | ) | (0.5 | ) | (5.7 | ) | ||||||||||||
Headcount (5) | |||||||||||||||||||||
Sales (6) | 2,626 | 2,624 | 2,485 | 2,457 | 2,407 | ||||||||||||||||
Other | 4,641 | 4,496 | 4,176 | 4,159 | 4,265 | ||||||||||||||||
Total Headcount | 7,267 | 7,120 | 6,661 | 6,616 | 6,672 |
(1) | We disposed of our operations in 11 countries, primarily based in Asia and Latin America, between November 2016 and March 2017. The financial results of our operations in those 11 countries are presented as discontinued operations in the accompanying consolidated financial statements and tables. All prior period financial information and operational metrics have been retrospectively adjusted to reflect this presentation. |
(2) | Represents the total dollar value of customer purchases of goods and services. |
(3) | Represents the change in financial measures that would have resulted had average exchange rates in the reporting periods been the same as those in effect in the prior year periods. |
(4) | Reflects the total number of unique user accounts that have made a purchase during the TTM either through one of our online marketplaces or directly with a merchant for which we earned a commission. |
(5) | Including employees of discontinued operations, our headcount decreased by 1,651 employees, or 20%, year-over-year in the fourth quarter of 2017, from 8,323 total employees in the prior year period. |
(6) | Includes merchant sales representatives, as well as sales support personnel from our continuing operations. |
Q4 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | ||||||||||||||||
Income (loss) from continuing operations | $ | (39,455 | ) | $ | (20,869 | ) | $ | (5,403 | ) | $ | 3,802 | $ | 51,071 | |||||||
Adjustments: | ||||||||||||||||||||
Stock-based compensation (1) | 22,563 | 19,650 | 21,392 | 18,235 | 21,673 | |||||||||||||||
Depreciation and amortization | 34,681 | 34,067 | 34,679 | 35,231 | 33,850 | |||||||||||||||
Acquisition-related expense (benefit), net | 1,345 | 12 | 36 | — | — | |||||||||||||||
Restructuring charges | 12,060 | 2,731 | 4,584 | 11,503 | 10 | |||||||||||||||
Gain on sale of intangible assets | — | — | — | (17,149 | ) | — | ||||||||||||||
Non-operating expense (income), net | 54,737 | 4,602 | (5,878 | ) | (7,546 | ) | 2,112 | |||||||||||||
Provision (benefit) for income taxes | (5,779 | ) | 4,587 | 3,883 | 2,531 | (3,457 | ) | |||||||||||||
Total adjustments | 119,607 | 65,649 | 58,696 | 42,805 | 54,188 | |||||||||||||||
Adjusted EBITDA | $ | 80,152 | $ | 44,780 | $ | 53,293 | $ | 46,607 | $ | 105,259 |
(1) | Represents stock-based compensation recorded within Selling, general and administrative, Cost of Revenue and Marketing. Non-operating expense (income), net, includes $0.2 million, $0.1 million, $0.0 million, $0.1 million and $0.1 million of additional stock-based compensation for the three months ended December 31, 2016, March 31, 2017, June 30, 2017, September 30, 2017 and December 31, 2017, respectively. Restructuring charges include $0.8 million of additional stock-based compensation for the three months ended September 30, 2017. |
Year Ending December 31, 2018 | |||
Expected income (loss) from continuing operations range | $25,000 to $35,000 | ||
Expected adjustments: | |||
Stock-based compensation | 95,000 | ||
Depreciation and amortization | 112,000 | ||
Non-operating expense (income), net | 20,000 | ||
Provision (benefit) for income taxes | 8,000 | ||
Total expected adjustments | $235,000 | ||
Expected Adjusted EBITDA range | $260,000 to $270,000 |
Three Months Ended December 31, 2017 | Year Ended December 31, 2017 | ||||||
Net income attributable to common stockholders | $ | 47,721 | $ | 14,040 | |||
Less: Net income attributable to noncontrolling interest | (3,127 | ) | (12,587 | ) | |||
Net income | 50,848 | 26,627 | |||||
Less: Loss from discontinued operations, net of tax | (223 | ) | (1,974 | ) | |||
Income from continuing operations | 51,071 | 28,601 | |||||
Less: Provision (benefit) for income taxes | (3,457 | ) | 7,544 | ||||
Income from continuing operations before provision (benefit) for income taxes | 47,614 | 36,145 | |||||
Stock-based compensation (1) | 21,726 | 81,168 | |||||
Amortization of acquired intangible assets | 5,410 | 23,032 | |||||
Acquisition-related expense (benefit), net | — | 48 | |||||
Restructuring charges | 10 | 18,828 | |||||
Gain on sale of intangible assets | — | (17,149 | ) | ||||
Gain on sale of investment | — | (7,624 | ) | ||||
Losses (gains), net from changes in fair value of investments | (5,482 | ) | (382 | ) | |||
Intercompany foreign currency losses (gains) and reclassifications of translation adjustments to earnings | (112 | ) | (16,177 | ) | |||
Non-cash interest expense on convertible senior notes | 2,794 | 10,758 | |||||
Non-GAAP income from continuing operations before provision (benefit) for income taxes | 71,960 | 128,647 | |||||
Non-GAAP provision (benefit) for income taxes | 27,103 | 50,452 | |||||
Non-GAAP net income | 44,857 | 78,195 | |||||
Net income attributable to noncontrolling interest | (3,127 | ) | (12,587 | ) | |||
Non-GAAP net income attributable to common stockholders | 41,730 | 65,608 | |||||
Plus: Cash interest expense from assumed conversion of convertible senior notes (2) | 1,004 | 4,337 | |||||
Non-GAAP net income attributable to common stockholders plus assumed conversions | $ | 42,734 | $ | 69,945 | |||
Weighted-average shares of common stock - diluted | 570,734,081 | 568,418,371 | |||||
Incremental dilutive securities | 46,296,300 | 46,296,300 | |||||
Weighted-average shares of common stock - non-GAAP | 617,030,381 | 614,714,671 | |||||
Diluted net income per share | $ | 0.08 | $ | 0.02 | |||
Impact of non-GAAP adjustments and related tax effects | (0.01 | ) | 0.09 | ||||
Non-GAAP net income per share | $ | 0.07 | $ | 0.11 |
(1) | Represents stock-based compensation expense recorded within Selling, general and administrative, Cost of Revenue, Marketing, and Other (income) expense, net. Restructuring charges include $0.8 million of additional stock-based compensation for the twelve months ended December 31, 2017. |
(2) | Adjustment to interest expense for assumed conversion of convertible senior notes excludes non-cash interest expense that has been added back above in calculating non-GAAP net income (loss) attributable to common stockholders. |
Q4 2016 | Q1 2017 | Q2 2017 | Q3 2017 | Q4 2017 | ||||||||||||||||
Net cash provided by (used in) operating activities from continuing operations | $ | 294,593 | $ | (136,233 | ) | $ | (20,695 | ) | $ | 23,861 | $ | 270,564 | ||||||||
Purchases of property and equipment and capitalized software from continuing operations | (19,254 | ) | (14,076 | ) | (15,385 | ) | (14,255 | ) | (15,442 | ) | ||||||||||
Free cash flow | $ | 275,339 | $ | (150,309 | ) | $ | (36,080 | ) | $ | 9,606 | $ | 255,122 | ||||||||
Net cash provided by (used in) investing activities from continuing operations | $ | (4,049 | ) | $ | (14,020 | ) | $ | (13,782 | ) | $ | 18,230 | $ | (15,751 | ) | ||||||
Net cash provided by (used in) financing activities | $ | (67,533 | ) | $ | (45,726 | ) | $ | (47,924 | ) | $ | (27,972 | ) | $ | (16,424 | ) |