# Groupon, Inc.: Form 10-Q for the period ended Mar 31, 2026

- Company: [Groupon, Inc.](/companies/grpn.md) (CIK 1490281)
- Form: 10-Q
- Filed: 2026-05-07
- Accepted by EDGAR: May 7, 2026, 16:14 ET
- Period: 2026-03-31
- Accession: 0001628280-26-032124
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1490281/000162828026032124/grpn-20260331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1490281/000162828026032124/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2026-01-01 to 2026-03-31 | $117.2m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2026-01-01 to 2026-03-31 | $11.2m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2026-01-01 to 2026-03-31 | $106.0m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2026-01-01 to 2026-03-31 | $73.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2026-01-01 to 2026-03-31 | −$3.3m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2026-01-01 to 2026-03-31 | $4.0m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2026-01-01 to 2026-03-31 | $4.9m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2026-01-01 to 2026-03-31 | −$12.9m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2026-01-01 to 2026-03-31 | −$0.32 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2026-01-01 to 2026-03-31 | −$0.32 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2026-01-01 to 2026-03-31 | 40,532,674 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2026-01-01 to 2026-03-31 | −$10.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2026-01-01 to 2026-03-31 | $3.6m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 3 months, 2026-01-01 to 2026-03-31 | $21.3m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2026-03-31 | $225.5m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2026-03-31 | $302.0m | us-gaap:AssetsCurrent |
| Total assets | at 2026-03-31 | $595.9m | us-gaap:Assets |
| Current liabilities | at 2026-03-31 | $374.4m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2026-03-31 | $658.3m | us-gaap:Liabilities |
| Long-term debt | at 2026-03-31 | $262.4m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2026-03-31 | $45.8m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2026-03-31 | −$62.6m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 43,217 characters.

The following discussion and analysis of our financial condition and results of operations should be read together with our Condensed Consolidated Financial Statements and related notes included under Part I, Item 1 of this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements about our business and operations. Our actual results may differ materially from those we currently anticipate as a result of many factors, including those we describe under Part II, Item 1A, *Risk Factors*, and elsewhere in this Quarterly Report. See Part I*, Forward-Looking Statements,* for additional information.

### Overview

Groupon is a global scaled two-sided marketplace that connects consumers to merchants. Consumers access our marketplace through our mobile applications and our websites. We operate in two segments, North America and International, and operate in three categories, Local, Goods and Travel. See Item 1, Note 12, *Segment Information,* for additional information.

Our mission is to get people offline through quality local experiences at great value. We believe the best things in life happen offline, and as the world becomes increasingly digitized, we expect demand to grow for in-person experiences and for the digital pathways consumers use to discover and book them. Groupon sits at the intersection of consumer intent and local supply, which we believe positions us to serve as a bridge between the emerging AI economy and the millions of local merchants who power Main Street. Our strategy is to be the trusted local experience marketplace where customers go to buy quality local services and experiences at unbeatable value. We plan to grow our revenue by building long-term relationships with local merchants to strengthen our online selection and by enhancing the customer reach through experience curation and improved convenience in order to drive customer demand and purchase frequency.

We generate service revenue from Local, Goods and Travel categories. Revenue primarily represents the net commissions earned from selling goods or services on behalf of third-party merchants. Revenue is reported on a net basis as the purchase price collected from the customer less the portion of the purchase price that is payable to the third-party merchant. We also earn commissions when customers make purchases with retailers using digital coupons accessed through our websites and mobile applications.

We continue to invest in making our platform more efficient, stable and agile. By improving our technology, our customer base can enjoy a modernized experience along with seamless execution of new product innovation, improved customer experience and customer satisfaction. Central to this is our continued investment in our product and engineering organization, building the development velocity, platform depth, and technical capabilities required to deliver faster innovation and more personalized experiences for both customers and merchants. Our product agenda is focused on driving growth through smarter discovery, deeper personalization, and an increasingly seamless experience across every surface we serve.

We believe the next generation of local commerce will be driven by AI-native experiences, for which AI agents will become an important discovery and transaction channel. We are investing in AI-native capabilities on both sides of our marketplace, including personalization, AI ready search and relevance, AI ready checkout for consumers, and AI driven tools intended to improve deal creation, content quality, and merchant productivity. We are making these investments now with the goal of Groupon being well positioned for local experiences demand as this channel scales.

In the first quarter of 2026, we launched Project Foundry, a company-wide initiative to transform our operating model by embedding AI agents into the core of every function. The goal of Foundry is not the launch of a single feature or capability, but to re-architect how work is performed internally so the Company operates with the speed required to succeed in an AI-native world. The financial impact of this initiative is not yet reasonably estimable, and we expect Foundry to influence how we operate over the remainder of 2026 and in future periods.

As part of Project Foundry and the Company’s strategy to become an AI-native company, management is evaluating a range of operational initiatives to better align the Company’s cost structure with this AI-native operating model, improve its operational efficiency and become more nimble, and position the Company for

growth. These initiatives, including significant restructuring actions, have not been finalized or approved by the Board of Directors. The Company expects that it will initiate these actions in the second quarter with a reduction of its global headcount by approximately 15% and intends to announce further details about this and additional significant cost-reduction and automation actions once those plans are finalized and approved.

### How We Measure Our Business

We use several operating and financial metrics to assess the progress of our business and make strategic decisions. Certain of the financial metrics are reported in accordance with GAAP and certain of those metrics are considered non-GAAP financial measures. As our business evolves, we may make changes to the key financial and operating metrics that we use to measure our business. For further information and reconciliations to the most applicable financial measures under GAAP, refer to our discussion under the *Non-GAAP Financial Measures* section.

### Operating Metrics

- *Gross billings* is the total dollar value of customer purchases of goods and services. Gross billings is presented net of customer refunds, order discounts and sales and related taxes. The substantial majority of our revenue transactions are comprised of sales of vouchers and similar transactions in which we collect the transaction price from the customer and remit a portion of the transaction price to the third-party merchant who will provide the related goods or services. For these transactions, gross billings differs from Revenue reported in our Condensed Consolidated Statements of Operations, which is presented net of the merchant's share of the transaction price. Gross billings is an indicator of our growth and business performance as it measures the dollar volume of transactions generated through our marketplaces. Tracking gross billings also allows us to monitor the percentage of gross billings that we are able to retain after payments to merchants.
- *Units* are the number of purchases during the reporting period, before refunds and cancellations, made either through one of our online marketplaces, a third-party marketplace, or directly with a merchant for which we earn a commission. We do not include purchases with retailers using digital coupons accessed through our websites or mobile applications in our units metric. We consider units to be an important indicator of the total volume of business conducted through our marketplaces.
- *Active customers* are unique user accounts, identified by a distinct email address, 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. We consider this metric to be an important indicator of our business performance as it helps us to understand how the number of customers actively purchasing our offerings is trending. Some customers could establish and make purchases from more than one account, so it is possible that our active customer metric may count certain customers more than once in a given period. We do not include consumers who solely make purchases with retailers using digital coupons accessed through our websites or mobile applications in our active customer metric, nor do we include consumers who solely make purchases of our inventory through third-party marketplaces with which we partner.

Our gross billings and units for the three months ended March 31, 2026 and 2025 were as follows (in thousands):

|  | Three Months Ended March 31, 2026 | 2025 |
| --- | ---: | ---: |
| Gross billings | $382,546 | $386,476 |
| Units | 8,148 | 8,540 |

Our active customers for the trailing twelve months ended March 31, 2026 and 2025 were as follows (in thousands):

|  | TTM Ended March 31, 2026 | 2025 |
| --- | ---: | ---: |
| TTM active customers | 16,209 | 15,472 |

28

### Financial Metrics

- *Revenue* is earned through transactions for which we generate commissions by selling goods or services on behalf of third-party merchants. Revenue from those transactions is reported on a net basis as the purchase price collected from the customer for the offering less an agreed upon portion of the purchase price paid to the third-party merchant. Revenue also includes commissions we earn when customers make purchases with retailers using digital coupons accessed through our digital properties.
- *Cost of revenue* consists of direct and certain indirect costs incurred to generate revenue. Costs incurred to generate revenue include credit card processing fees, editorial costs, compensation expense for technology support personnel who are responsible for maintaining the infrastructure of our websites, amortization of internal-use software relating to customer-facing applications, web hosting and other processing fees attributed to the cost of service.
- *Gross profit* reflects the net margin we earn after deducting our Cost of revenue from our Revenue.
- *Contribution Profit* measures the amount of marketing investment needed to generate revenue and is defined as net revenues less cost of sales and marketing expense.
- *Adjusted EBITDA* is a non-GAAP financial measure that we define as Net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation, and other special charges and credits, including items that are unusual in nature or infrequently occurring. For further information and a reconciliation to Net income (loss) from continuing operations, refer to our discussion under the *Non-GAAP Financial Measures* section.
- *Free cash flow* is a non-GAAP liquidity measure that comprises net cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software. For further information and a reconciliation to Net cash provided by (used in) operating activities from continuing operations, refer to our discussion in the *Liquidity and Capital Resources* section.

The following table presents the above financial metrics for the three months ended March 31, 2026 and 2025 (in thousands):

|  | Three Months Ended March 31, 2026 | 2025 |
| --- | ---: | ---: |
| Revenue | $117,200 | $117,187 |
| Gross profit | 106,049 | 106,298 |
| Contribution profit | 69,716 | 71,861 |
| Adjusted EBITDA | 12,790 | 15,326 |
| Free cash flow | (13,517) | (3,759) |

### Operating Expenses

- *Marketing* expense consists primarily of online marketing costs, such as search engine marketing, advertising on social networking sites and affiliate programs, and offline marketing costs, such as television. Additionally, compensation expense for marketing employees is classified within Marketing expense. We record these costs within Marketing on the Condensed Consolidated Statements of Operations when incurred. From time to time, we have offerings from well-known national merchants for customer acquisition and activation purposes, for which the amount we owe the merchant for each voucher sold exceeds the transaction price paid by the customer. Our gross billings from those transactions generate no revenue and our net cost (i.e., the excess of the amount owed to the merchant over the amount paid by the customer) is classified as marketing expense. We evaluate marketing expense as a percentage of gross profit because it gives us an indication of how well our marketing spend is driving gross profit performance.
- *SG&A* expenses include selling expenses such as sales commissions and other compensation expenses for sales representatives, as well as costs associated with supporting the sales function such as technology, telecommunications and travel. General and administrative expenses include compensation expense for employees involved in customer service, operations, technology and product development, as well as general corporate functions, such as finance, legal and human resources. Additional costs in

general and administrative include depreciation and amortization, rent, professional fees, litigation costs, travel and entertainment, recruiting, maintenance, certain technology costs and other general corporate costs. We evaluate SG&A expense as a percentage of gross profit because it gives us an indication of our operating efficiency.

- *Restructuring and related charges* represent severance and benefit costs for workforce reductions, facilities-related costs and professional advisory fees.

### Factors Affecting Our Performance

*Attracting and retaining local merchants and suppliers.* As we focus on our local experiences marketplace, we depend on our ability to attract and retain merchants who are willing to offer their experiences on our platform. Merchants can withdraw their offerings from our marketplace at any time, and their willingness to continue offering services through our marketplace depends on the effectiveness of our marketplace offering. We are focused on improving our marketplace offering and merchant value proposition by exploring opportunities to better balance the needs of merchant partners, customers and Groupon.

*Acquiring and retaining customers*. To acquire and retain customers to drive higher volumes on our platform from new and existing customers, we are focused on strengthening our product offerings, improving the attractiveness of our offerings, and enhancing the performance of our marketing campaigns.

*Impact of macroeconomic conditions.* We have been, and may continue to be, impacted by adverse consequences of the macroeconomic environment, including but not limited to, inflationary pressures, higher labor costs, tariff and other trade policies, labor shortages, supply chain challenges and changes in consumer and merchant behavior. Judicial and executive developments relating to U.S. tariff and trade policies in Q1 2026 may further increase uncertainty regarding the scope, implementation and potential future direction of such measures, and further changes could occur. In addition, recent and potential future changes to trade and tariff policies may introduce increased pricing volatility and overall uncertainty into our operations. To minimize the impact of macroeconomic conditions on our business, and to create value for our merchants and customers, we are focusing on building long-term relationships with local merchants to enhance our inventory selection, improving the customer experience through inventory curation and expanding convenience in order to drive customer demand and purchase frequency.

### Results of Operations

### North America

### Operating Metrics

North America segment gross billings and units for the three months ended March 31, 2026 and 2025 were as follows (in thousands):

| Gross billings | Three Months Ended March 31, 2026 | 2025 | % Change |
| --- | ---: | ---: | ---: |
| Local | $260,643 | $255,656 | 2.0% |
| Goods | 4,991 | 8,621 | (42.1) |
| Travel | 20,394 | 22,242 | (8.3) |
| Total gross billings | $286,028 | $286,519 | (0.2) |
| **Units** |  |  |  |
| Local | 5,132 | 5,367 | (4.4)% |
| Goods | 137 | 259 | (47.1) |
| Travel | 76 | 89 | (14.6) |
| Total units | 5,345 | 5,715 | (6.5) |

North America TTM active customers for the trailing twelve months ended March 31, 2026 and 2025 were as follows (in thousands):

|  | Trailing Twelve Months Ended March 31, 2026 | 2025 | % Change |
| --- | ---: | ---: | ---: |
| TTM active customers | 10,980 | 10,466 | 4.9% |

#### Comparison of the Three Months Ended March 31, 2026 and 2025:

North America gross billings and units decreased by $0.5 million and 0.4 million, while TTM active customers increased by 0.5 million for the three months ended March 31, 2026 compared with the prior year period. Within our Local category, gross billings increased 2.0% year-over-year and unit volume declined, reflecting growth in transaction value that more than offset a decline in transaction volume. From a supply perspective, our Local category growth was led by our Things to Do offerings, partially offset by a deceleration in our Small Business merchant base, softness in Health, Beauty & Wellness and pressure from our Enterprise channel. From a demand perspective, paid channels delivered strong year-over-year growth, partially offset by headwinds in our managed and organic channels and the negative impact of severe winter weather in January and February.

### Financial Metrics

North America segment revenue, cost of revenue and gross profit for the three months ended March 31, 2026 and 2025 were as follows (in thousands):

| Revenue | Three Months Ended March 31, 2026 | 2025 | % Change |
| --- | ---: | ---: | ---: |
| Local | $85,537 | $85,942 | (0.5)% |
| Goods | 894 | 1,512 | (40.9) |
| Travel | 3,482 | 3,659 | (4.8) |
| Total revenue | $89,913 | $91,113 | (1.3) |
| **Cost of revenue** |  |  |  |
| Local | $7,447 | $7,478 | (0.4)% |
| Goods | 98 | 198 | (50.5) |
| Travel | 445 | 565 | (21.2) |
| Total cost of revenue | $7,990 | $8,241 | (3.0) |
| **Gross profit** |  |  |  |
| Local | $78,090 | $78,464 | (0.5)% |
| Goods | 796 | 1,314 | (39.4) |
| Travel | 3,037 | 3,094 | (1.8) |
| Total gross profit | $81,923 | $82,872 | (1.1) |
| % of Consolidated revenue | 76.7% | 77.8% |  |
| % of Consolidated cost of revenue | 71.7 | 75.7 |  |
| % of Consolidated gross profit | 77.3 | 78.0 |  |

#### Comparison of the Three Months Ended March 31, 2026 and 2025:

North America revenue, gross profit and cost of revenue decreased by $1.2 million, $0.9 million and $0.3 million for the three months ended March 31, 2026 compared with the prior year period. Our Local revenue decreased 0.5%, lagging the rate of growth in gross billings, as a result of higher promotional discounts. The decrease in cost of revenue is primarily due to a decrease in amortization of internally-developed software relating to customer-facing applications. Gross profit decreased due to the decrease in revenue, partially offset by a decrease in cost of revenue.

### Marketing and Contribution Profit

North America marketing and contribution profit for the three months ended March 31, 2026 and 2025 was as follows (in thousands):

|  | Three Months Ended March 31, 2026 | 2025 | % Change |
| --- | ---: | ---: | ---: |
| Marketing | $26,921 | $26,474 | 1.7% |
| % of Revenue | 29.9% | 29.1% |  |
| Contribution profit | $55,002 | $56,398 | (2.5)% |

#### Comparison of the Three Months Ended March 31, 2026 and 2025:

North America marketing expense and marketing expense as a percentage of revenue increased for the three months ended March 31, 2026 compared with the prior year period, primarily driven by higher investment in paid channels. Marketing expense as a percentage of revenue increased as revenue growth did not keep pace with our marketing investment due to the headwinds in our managed and organic channels, partially offset by favorable paid channel performance.

North America contribution profit decreased for the three months ended March 31, 2026 compared with the prior year period, primarily due to lower gross profit and higher marketing investment.

### International

### Operating Metrics

International segment gross billings and units for the three months ended March 31, 2026 and 2025 were as follows (in thousands):

| Gross billings | Three Months Ended March 31, 2026 | 2025 | % Change |
| --- | ---: | ---: | ---: |
| Local | $78,128 | $80,478 | (2.9)% |
| Goods | 11,302 | 12,399 | (8.8) |
| Travel | 7,088 | 7,080 | 0.1 |
| Total gross billings | $96,518 | $99,957 | (3.4) |
| **Units** |  |  |  |
| Local | 2,539 | 2,446 | 3.8% |
| Goods | 227 | 336 | (32.4) |
| Travel | 37 | 43 | (14.0) |
| Total units | 2,803 | 2,825 | (0.8) |

International TTM active customers for the trailing twelve months ended March 31, 2026 and 2025 were as follows (in thousands):

|  | Trailing Twelve Months Ended March 31, 2026 | 2025 | % Change |
| --- | ---: | ---: | ---: |
| TTM active customers | 5,229 | 5,006 | 4.5% |

#### Comparison of the Three Months Ended March 31, 2026 and 2025:

International gross billings and units decreased by $3.4 million and 0.02 million, while TTM active customers increased by 0.2 million for the three months ended March 31, 2026 compared with the prior year period. The decline in reported gross billings was primarily due to the divestiture of Giftcloud. Excluding Giftcloud, International Local gross billings grew 14.3% year-over-year, reflecting growth in both transaction volume and transaction value. From a supply perspective, growth within International Local, excluding Giftcloud was driven by an expansion of seasonally relevant supply across our major markets, led by our Things to Do offering. From a demand perspective, the deployment of our new consumer platform across International markets contributed to improved organic traffic during the quarter. In addition, there was an $8.9 million favorable impact on gross billings from year-over-year changes in foreign currency exchange rates.

### Financial Metrics

International segment revenue, cost of revenue and gross profit for the three months ended March 31, 2026 and 2025 were as follows (in thousands):

| Revenue | Three Months Ended March 31, 2026 | 2025 | % Change |
| --- | ---: | ---: | ---: |
| Local | $24,597 | $22,419 | 9.7% |
| Goods | 1,584 | 2,263 | (30.0) |
| Travel | 1,106 | 1,392 | (20.5) |
| Total revenue | $27,287 | $26,074 | 4.7 |
| **Cost of revenue** |  |  |  |
| Local | $2,634 | $2,094 | 25.8% |
| Goods | 304 | 364 | (16.5) |
| Travel | 223 | 190 | 17.4 |
| Total cost of revenue | $3,161 | $2,648 | 19.4 |
| **Gross profit** |  |  |  |
| Local | $21,963 | $20,325 | 8.1% |
| Goods | 1,280 | 1,899 | (32.6) |
| Travel | 883 | 1,202 | (26.5) |
| Total gross profit | $24,126 | $23,426 | 3.0 |
| % of Consolidated revenue | 23.3% | 22.2% |  |
| % of Consolidated cost of revenue | 28.3 | 24.3 |  |
| % of Consolidated gross profit | 22.7 | 22.0 |  |

#### Comparison of the Three Months Ended March 31, 2026 and 2025

International revenue, gross profit and cost of revenue increased by $1.2 million, $0.7 million, and $0.5 million for the three months ended March 31, 2026 compared with the prior year period. Excluding Giftcloud, International Local revenue increased 18.8%, consistent with the drivers of gross billings discussed above. The increase in cost of revenue was primarily due to Giftcloud charges in the current year that were intercompany transactions pre-divestiture in the prior year. Revenue and gross profit also had favorable impacts of $2.5 million and $2.2 million from year-over-year changes in foreign currency exchange rates.

### Marketing and Contribution Profit

International marketing and contribution profit for the three months ended March 31, 2026 and 2025 were as follows (in thousands):

|  | Three Months Ended March 31, 2026 | 2025 | % Change |
| --- | ---: | ---: | ---: |
| Marketing | $9,412 | $7,963 | 18.2% |
| % of Revenue | 34.5% | 30.5% |  |
| Contribution profit | $14,714 | $15,463 | (4.8)% |

35

#### Comparison of the Three Months Ended March 31, 2026 and 2025:

International marketing expense and marketing expense as a percentage of revenue increased for the three months ended March 31, 2026 compared with the prior year period, primarily due to a higher investment in paid channels to capitalize on expanded supply and demand opportunities.

International contribution profit decreased for the three months ended March 31, 2026 compared with the prior year period, primarily due to higher marketing investment, partially offset by growth in gross profit.

### Consolidated Operating Expenses

Operating expenses for the three months ended March 31, 2026 and 2025 were as follows (in thousands):

|  | Three Months Ended March 31, 2026 | 2025 | % Change |
| --- | ---: | ---: | ---: |
| Marketing | $36,333 | $34,437 | 5.5% |
| Selling, general and administrative (1) | 73,028 | 69,840 | 4.6 |
| Restructuring and related charges (credits) | 7 | 137 | (94.9) |
| Total operating expenses | $109,368 | $104,414 | 4.7 |
| % of Revenue: |  |  |  |
| Marketing | 31.0% | 29.4% |  |
| Selling, general and administrative | 62.3% | 59.6% |  |

(1) The three months ended March 31, 2026 includes $11.7 million of stock-based compensation expense and $2.3 million of depreciation and amortization expense. The three months ended March 31, 2025 includes $7.7 million of stock-based compensation expense and $3.4 million of depreciation and amortization expense.

#### Comparison of the Three Months Ended March 31, 2026 and 2025:

SG&A and SG&A as a percentage of revenue increased for the three months ended March 31, 2026 compared with the prior year period, due to higher stock-based compensation expense for new awards and payroll related costs, partially offset by lower amortization of internally developed software relating to non-customer facing applications.

### Consolidated Other Income (Expense), Net

Other income (expense), net includes interest expense, interest income, and foreign currency gains and losses, primarily resulting from intercompany balances with our subsidiaries that are denominated in foreign currencies.

Other income (expense), net for the three months ended March 31, 2026 and 2025 was as follows (in thousands):

|  | Three Months Ended March 31, 2026 | 2025 |
| --- | ---: | ---: |
| Other income (expense), net | $(4,371) | $7,571 |

#### Comparison of the Three Months Ended March 31, 2026 and 2025:

The change in Other income (expense), net for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 is primarily related to a $13.0 million decrease in net foreign currency gains (losses) which primarily resulted from U.S. dollar-denominated intercompany balances with our foreign subsidiaries. The decrease is primarily driven by net foreign currency losses in the current year period from the weakening of the U.S dollar relative to the Euro compared to net foreign currency gains in the prior year period.

### Consolidated Provision (Benefit) for Income Taxes

Provision (benefit) for income taxes for the three months ended March 31, 2026 and 2025 were as follows (in thousands):

|  | Three Months Ended March 31, 2026 | 2025 | % Change |
| --- | ---: | ---: | --- |
| Provision (benefit) for income taxes | $4,899 | $1,428 | NM |
| Effective tax rate | (63.7)% | 15.1% |  |

#### Comparison of the Three Months Ended March 31, 2026 and 2025:

The effective tax rates for the three months ended March 31, 2026 and 2025 were impacted by pretax losses incurred in jurisdictions that have valuation allowances against their net deferred tax assets and by benefits due to tax refunds received. The effective tax rate for the three months ended March 31, 2026 was further impacted by additional tax expense resulting from the signing of an advance pricing agreement with international tax authorities during the quarter and an increase in the Company's liability related to unremitted foreign earnings. For the three months ended March 31, 2026 and 2025, we continue to maintain a full valuation allowance against all U.S. federal and state deferred tax assets. We expect that our consolidated effective tax rate in future periods may continue to differ significantly from the U.S. federal income tax rate as a result of our tax obligations in jurisdictions with profits and valuation allowances in jurisdictions with losses.

See Item 1, Note 9, *Income Taxes*, for additional information relating to tax audits and assessments and regulatory and legal developments that may impact our business and results of operations in the future.

### Non-GAAP Financial Measures

In addition to financial results reported in accordance with GAAP, we have provided the following non-GAAP financial measures: Adjusted EBITDA, free cash flow and foreign currency exchange rate neutral operating results. These non-GAAP financial measures, which are presented on a continuing operations basis, are intended to aid investors in better understanding our current financial performance and prospects for the future as seen through the eyes of management. We believe that these non-GAAP financial measures facilitate comparisons with our historical results and with the results of peer companies who present similar measures (although other companies may define non-GAAP measures differently than we define them, even when similar terms are used to identify such measures). However, these non-GAAP financial measures are not intended to be a substitute for those reported in accordance with GAAP.

*Adjusted EBITDA*. Adjusted EBITDA is a non-GAAP performance measure that we define as Net income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation and other special charges and credits, including items that are unusual in nature or infrequently occurring. Our definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key measure used by our management and Board to evaluate operating performance, generate future operating plans and make strategic decisions. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board. However, Adjusted EBITDA is not intended to be a substitute for Net income (loss) from continuing operations.

We exclude stock-based compensation expense and depreciation and amortization because they are primarily non-cash in nature and we believe that non-GAAP financial measures excluding those items provide meaningful supplemental information about our operating performance and liquidity. For the three months ended March 31, 2026 and 2025, special charges and credits included charges related to our Italy Restructuring Plan, 2022 Restructuring Plan and 2020 Restructuring Plan. We exclude special charges and credits from Adjusted EBITDA because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons with our historical results.

The following is a reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure, Net income (loss) from continuing operations, for the three months ended March 31, 2026 and 2025 (in thousands):

|  | Three Months Ended March 31, 2026 | 2025 |
| --- | ---: | ---: |
| Income (loss) from continuing operations | $(12,589) | $8,027 |
| Adjustments: |  |  |
| Stock-based compensation | 11,911 | 7,694 |
| Depreciation and amortization | 4,191 | 5,611 |
| Restructuring and related charges (credits) | 7 | 137 |
| Other (income) expense, net | 4,371 | (7,571) |
| Provision (benefit) for income taxes | 4,899 | 1,428 |
| Total adjustments | 25,379 | 7,299 |
| Adjusted EBITDA | $12,790 | $15,326 |

*Free cash flow*. Free cash flow is a non-GAAP liquidity measure that comprises Net cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software. We use free cash flow to conduct and evaluate our business because, although it is similar to Net cash provided by (used in) from continuing operations, we believe that it typically represents a more useful measure of cash flows because purchases of fixed assets, software developed for internal use and website development costs are necessary components of our ongoing operations. Free cash flow is not intended to represent the total increase or decrease in our cash balance for the applicable period.

Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. We believe it is important to view free cash flow as a complement to our Condensed Consolidated Statements of Cash Flows. For a reconciliation of free cash flow to the most comparable GAAP financial measure, see *Liquidity and Capital Resources* below.

*Foreign currency exchange rate neutral operating results*. Foreign currency exchange rate neutral operating results show current period operating results as if foreign currency exchange rates had remained the same as those in effect in the prior year period. Those measures are intended to facilitate comparisons to our historical performance.

The following table represents the effect on our Condensed Consolidated Statements of Operations from changes in exchange rates versus the U.S. dollar for the three months ended March 31, 2026 (in thousands):

|  | Three Months Ended March 31, 2026 At Avg. Q1 2025 Rates | Exchange Rate Effect (2) | As Reported |
| --- | ---: | ---: | ---: |
| Gross billings | $373,676 | $8,870 | $382,546 |
| Revenue | 114,745 | 2,455 | 117,200 |
| Cost of revenue | 10,863 | 288 | 11,151 |
| Gross profit | 103,882 | 2,167 | 106,049 |
| Marketing | 35,379 | 954 | 36,333 |
| Selling, general and administrative | 70,542 | 2,486 | 73,028 |
| Restructuring and related charges | 6 | 1 | 7 |
| Income (loss) from continuing operations | (2,045) | (1,274) | (3,319) |

(1) Represents the financial statement balances that would have resulted had exchange rates in the reporting period been the same as those in effect in the prior year period.

(2) Represents the increase or decrease in the reported amount resulting from changes in exchange rates from those in effect in the prior year period.

### Liquidity and Capital Resources

Our principal source of liquidity is our cash balance totaling $225.5 million as of March 31, 2026. The Company’s cash requirements are subject to change as business conditions warrant and opportunities arise. We believe that the Company has sufficient liquidity to support its overall ongoing operational needs within the next 12 months, including the repayment of the 2027 Notes upon maturity on March 15, 2027.

Our net cash flows from operating, investing and financing activities from continuing operations for the three months ended March 31, 2026 and 2025 were as follows (in thousands):

| Cash provided by (used in): | Three Months Ended March 31, 2026 | 2025 |
| --- | ---: | ---: |
| Operating activities | $(9,958) | $(22) |
| Investing activities | (3,559) | (3,737) |
| Financing activities | (55,669) | (454) |

39

Free cash flow is a non-GAAP liquidity measure that comprises net cash provided by operating activities, less purchases of property and equipment and capitalized software. Our free cash flow for the three months ended March 31, 2026 and 2025 and a reconciliation to the most comparable GAAP financial measure, Net cash provided by (used in) operating activities from continuing operations, for those periods were as follows (in thousands):

|  | Three Months Ended March 31, 2026 | 2025 |
| --- | ---: | ---: |
| Net cash provided by (used in) operating activities from continuing operations | $(9,958) | $(22) |
| Purchases of property and equipment and capitalized software from continuing operations | (3,559) | (3,737) |
| Free cash flow | $(13,517) | $(3,759) |

Our revenue-generating transactions are primarily structured such that we collect cash up-front from customers and pay third-party merchants at a later date, either based upon the customer's redemption of the related voucher or fixed payment terms, which are generally weekly, throughout the term of the merchant's offering.

Our cash balances fluctuate significantly throughout the year based on many variables, including changes in gross billings and the timing of payments to merchants and suppliers.

#### Net cash provided by (used in) operating activities

For the three months ended March 31, 2026, our net cash used in operating activities from continuing operations was $10.0 million as compared with net cash used in operating activities from continuing operations of $22.0 thousand in the prior period. The increase in cash used in operating activities is primarily attributed to a larger decrease in accrued merchant and supplier payables during the three months ended March 31, 2026, compared to the prior year period. The larger decrease reflects higher accumulated accrued merchant and supplier payable balances entering the first quarter of 2026, driven by consolidated gross billings growth in the fourth quarter of 2025 compared with the fourth quarter of 2024.

#### Net cash provided by (used in) investing activities

For the three months ended March 31, 2026, our net cash used in investing activities from continuing operations was $3.6 million as compared with net cash used in investing activities from continuing operations of $3.7 million in the prior period. The net cash used in investing activities for both periods relates to purchases of property and equipment and capitalized software, which has remained consistent year-over-year.

#### Net cash provided by (used in) financing activities

For the three months ended March 31, 2026, our net cash used in financing activities from continuing operations was $55.7 million as compared with net cash used in financing activities from continuing operations of $0.5 million in the prior period. The year-over-year change from financing activities is primarily due to a $33.7 million payment to pay off the remaining aggregate principal amount of the 2026 Notes upon their scheduled maturity and $21.3 million related to repurchases of Common Stock under our share repurchase program. See Item 1, Note 5, *Financing Arrangements* for additional information regarding the payment of our 2026 Notes and Item 1, Note 7, *Stockholders' Equity (Deficit) and Compensation Arrangements* for additional information regarding our common stock repurchases.

### Matters related to the Letters of Credit

In February 2024, we prepaid the Payoff Amount to terminate all commitments to extend further credit under the Credit Agreement. The payment of the Payoff Amount terminated our obligations under the Credit Agreement, except for ordinary and customary survival terms. We were not subject to any early termination penalties under the Credit Agreement. Following the termination, we retained access to letters of credit, originally available under the Credit Agreement, pursuant to our Cash Collateral Agreement.

See Item 1, Note 5, *Financing Arrangements,* for additional information regarding the Cash Collateral Agreement.

### Matters related to the Notes

In 2021, we issued the 2026 Notes in the principal amount of $230.0 million. The Company repaid the remaining $33.7 million principal and all accrued interest on its 2026 Notes upon maturity on March 15, 2026. The 2026 Notes bore interest at a rate of 1.125% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, with an annual effective interest rate of 1.83%. The total payment included the outstanding principal balance and all accrued and unpaid interest up to the maturity date.

In November 2024, we issued $197.3 million aggregate principal amount of 2027 Notes. The 2027 Notes bear interest at a rate of 6.25% per annum, payable semi-annually March 15 and September 15 of each year, and will mature March 15, 2027, subject to earlier repurchase or conversion.

In July 2025, the Company issued $244.1 million aggregate principal amount of the 2030 Notes, consisting of (i) $20.0 million aggregate principal amount of 2030 Notes issued in exchange for $20.0 million aggregate principal amount of the Company’s outstanding 2026 Notes and (ii) $224.1 million aggregate principal amount of 2030 Notes issued in exchange for $150.0 million aggregate principal amount of the Company’s outstanding 2027 Notes with 2030 Notes Offering Participants.

The 2030 Notes are senior, unsecured obligations of the Company and accrue interest at a rate of 4.875% per annum, payable semi-annually in arrears on each June 30 and December 30, commencing December 30, 2025, and will mature on June 30, 2030, unless earlier converted, redeemed or repurchased.

See Item 1, Note 5, *Financing Arrangements,* for additional information regarding the 2026 Notes, 2027 Notes and 2030 Notes.

### Other Liquidity and Capital Resource matters

As of March 31, 2026, we had $58.8 million in cash held by our international subsidiaries, which is primarily denominated in British Pounds Sterling, Euros, Indian Rupees and Australian dollars. In general, it is our practice and intention to re-invest the earnings of our non-U.S. subsidiaries in those operations or remit such earnings in a tax-efficient manner. We have not, nor do we currently anticipate the need to, repatriate funds to the U.S. to satisfy domestic liquidity needs arising in the ordinary course of business.

### Contractual Obligations and Commitments

Our future lease payments and purchase obligations as of March 31, 2026 and through the date of this report, did not materially change from the amounts set forth in our 2025 Annual Report on Form 10-K.

For information on our commitments for financing arrangements, see Item 1, Note 5, *Financing Arrangements.*

### Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of March 31, 2026.

### Significant Accounting Policies and Critical Accounting Estimates

The preparation of Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts and classifications of assets and liabilities, revenue and expenses, and related disclosure of contingent liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP. Our significant accounting policies are discussed in Part II, Item 8, Note 2, *Summary of Significant Accounting Policies* in our Annual Report on Form 10-K for the year ended December 31, 2025. In addition, refer to the critical accounting estimates under Part II, Item 7, *Management's Discussion and Analysis of Financial Condition and Results of Operations* in our Annual Report on Form 10-K for the year ended December 31, 2025.

## Market risk

As filed, 3,934 characters.

We have operations both within the U.S. and internationally, and we are exposed to market risks in the ordinary course of our business, including the effect of foreign currency fluctuations, interest rate changes and inflation. Information relating to quantitative and qualitative disclosures about these market risks is set forth below.

### Foreign Currency Exchange Risk

We transact business in various foreign currencies other than the U.S. dollar, principally the Euro, British Pound Sterling, Canadian dollar, Indian Rupee, Polish Zloty, Czech Koruna, and, to a lesser extent, Swiss Franc and Australian dollar, which exposes us to foreign currency risk. As of March 31, 2026, the U.S. dollar index was up 1.7% over December 31, 2025. For the three months ended March 31, 2026, we derived approximately 23.3% of our revenue from our International segment. Revenue and related expenses generated from our international operations are generally denominated in the local currencies of the corresponding countries. The functional currencies of our subsidiaries that either operate or support these markets are generally the same as the corresponding local currencies. However, the results of operations of, and certain of our intercompany balances associated with, our international operations are exposed to foreign currency exchange rate fluctuations. Upon consolidation, as exchange rates vary, our revenue and other operating results may differ materially from expectations, and we may record significant gains or losses on the re-measurement of intercompany balances.

We assess our foreign currency exchange risk based on hypothetical changes in rates utilizing a sensitivity analysis that measures the potential impact on working capital based on a 10% change (increase and decrease) in currency rates. We use a current market pricing model to assess the changes in the value of the U.S. dollar on foreign currency denominated monetary assets and liabilities. The primary assumption used in this model is a hypothetical 10% weakening or strengthening of the U.S. dollar against those currency exposures as of March 31, 2026 and December 31, 2025.

As of March 31, 2026, our net working capital deficit (defined as current assets less current liabilities) from subsidiaries that are subject to foreign currency translation risk was $30.7 million. The potential increase in this working capital deficit from a hypothetical 10% adverse change in quoted foreign currency exchange rates would be $3.1 million. This compares with a $26.5 million working capital deficit subject to foreign currency exposure as of December 31, 2025, for which a 10% adverse change would have resulted in a potential increase in this working capital deficit of $2.7 million.

### Interest Rate Risk

Our cash balance as of March 31, 2026 consists of bank deposits so exposure to market risk for changes in interest rates is limited. The 2027 Notes and 2030 Notes have an aggregate principal amount of $47.3 million and $244.1 million, respectively, and bear interest at a fixed rate, so we have no financial statement impact from changes in interest rates. However, changes in market interest rates impact the fair value of the 2027 Notes and 2030 Notes along with other variables such as our credit spreads and the market price and volatility of our Common Stock. See Item 1, Note 5, *Financing Arrangements*, for additional information.

### Inflation Risk

Our business is affected by changes to our merchants' and customers' discretionary spend. As our costs are subject to inflationary pressures, periods of increased inflation could negatively impact our business by driving up our operating costs. If those pressures become significant, we may not be able to offset such higher costs through price increases or other cost efficiency measures. Our inability or failure to do so could harm our business, financial condition and results of operations.

## Controls and procedures

As filed, 1,795 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of March 31, 2026.

Based on that evaluation, our management concluded that, as of March 31, 2026, our disclosure controls and procedures are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

### Changes in Internal Control over Financial Reporting

Management did not identify changes that occurred in our internal control over financial reporting during the three months ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

## Risk factors

As filed, 6,022 characters.

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A, *Risk Factors* of our Annual Report on Form 10-K for the year ended December 31, 2025, except as supplemented below.

***Our strategy to return the Company to stabilized growth, including rebuilding Groupon as an AI-native company, may be unsuccessful, may not produce the expected benefits, and may itself create new operational, financial, and reputational risks.***

We continue to implement a strategy to become the trusted marketplace where customers go to buy local services and experiences. We are executing this by building long-term relationships with local merchants to improve our inventory selection and by improving the customer experience through inventory curation and improved convenience in order to drive customer demand and purchase frequency. We are also working to rebuild Groupon as an AI-native company by embedding AI agents into the core of every function. However, there are no assurances that these actions will be successful in returning the Company to stabilized growth. Our efforts may prove more difficult and costly than we currently anticipate and the associated costs may exceed our current cost structure.

The macroeconomic environment, including inflationary pressures, higher labor costs, tariff or other trade policies, labor shortages, supply chain challenges and resulting changes in consumer and merchant behavior, may limit our merchants' ability to offer deals or service customers, and reduce consumer discretionary spending. These factors may make it more difficult to effectively execute our strategy, including to quickly test, learn and scale initiatives relating to improving inventory selection or improving customer experience. If we are unable to effectively execute our strategy and realize its anticipated benefits, our business, financial condition and results of operations could be negatively impacted.

The success of our AI initiatives depend on numerous factors outside our control, including the pace of AI technology evolution, the availability, capability, and cost of third-party AI tools and infrastructure, and our ability to integrate and deploy AI capabilities at the required pace. The benefits we expect from our AI initiatives, including improved execution speed, throughput, talent efficiency, operational productivity, and financial performance, may not be realized in the time frame we expect or at all. The aggregate financial impact of our AI initiatives are not yet reasonably estimable, and our investments in AI-native architecture, agentic workflows, AI-ready search, checkout, and merchant-facing tools may not be recoverable.

Workforce reductions and organizational changes undertaken in connection with our transition to an AI-enabled operating model may also result in the loss of institutional knowledge, reduced employee engagement, challenges in attracting and retaining personnel with the skills required to execute our strategy, and operational inefficiencies during periods of transition. Our attempts at automation may not succeed in whole or part.

In addition to execution risks, our public statements about our AI initiatives and our AI strategy, including the pace, nature, and expected operational and financial impact of our deployment of AI agents, are subject to regulatory and litigation risk if not adequately substantiated or later viewed as inconsistent with our actual capabilities or results. Even where our statements have a reasonable basis when made, the rapid evolution of AI technology may render them stale or subject to challenge.

***Our use of AI and machine learning poses new operational, legal, and reputational risks.***

We continue to integrate AI technologies into our platform to enhance internal efficiency, marketing automation, and customer support. The use of these rapidly evolving technologies presents significant risks, including:

- Accuracy and Reputation: Generative AI models may produce inaccurate, biased, or offensive content. If our AI tools generate false deal terms or inappropriate customer communications, we could be exposed to liability for deceptive trade practices, regulatory scrutiny, and reputational harm.
- Intellectual Property and Liability: Content generated by AI, such as deal descriptions or marketing images, may not be eligible for copyright protection, limiting our ability to enforce intellectual property

rights. Additionally, if our AI vendors use copyrighted third-party data to train their models, we could face infringement claims, resulting in legal costs or restrictions on our use of AI-generated content.

- Data Security and Privacy: The use of third-party AI tools may require sharing sensitive data with vendors. If proprietary merchant information or consumer personal data is inadvertently fed into public AI models, it could be exposed or used to train models accessible to others, increasing the risk of data breaches and loss of confidential information. Even where we use non-public, enterprise, or contractually restricted third-party AI tools, sensitive or proprietary information, including, but not limited to, PII and financial or other information, may still be unintentionally exposed through employee or vendor misuse, misconfiguration, prompt injection or similar manipulation, or as a result of data breaches or cybersecurity attacks affecting our AI vendors or the underlying model providers.
- Regulatory Uncertainty: Laws and regulations governing AI are rapidly evolving. New or proposed regulations could impose significant compliance costs, restrict our ability to deploy AI tools, or require changes to our business practices.

While we continue to implement policies and controls to mitigate these risks, the effectiveness of such measures is not assured given the pace of technological and regulatory change. If any of these risks materialize, our operations, financial results, and reputation could be adversely affected.

Filed May 7, 2026.
Source: SEC EDGAR, the filing index for accession 0001628280-26-032124. Last ingested by Listed: Oct 27, 2026, 17:30 ET. No prices; not investment advice.