Groupon Q3 Earnings Miss Estimates, Revenues Increase Y/Y

Groupon GRPN reported a loss of $2.92 per share for the third quarter of 2025, missing the Zacks Consensus Estimate, which was pegged at earnings of a cent per share. The company had reported earnings of 33 cents per share in the year-ago quarter.Revenues of $122.8 million beat the consensus estimate by 0.77%. The figure increased 7.3% on a year-over-year basis (6.2% FX-neutral).Region-wise, North America’s revenues of $96 million beat the consensus mark by 4% and grew 11% year over year. International revenues of $26.8 million missed the consensus mark by 2.89% and decreased 2.8% year over year (7.5% excluding the foreign exchange effect).Gross billings totaled $416.1 million in the third quarter of 2025, reflecting a 11% year-over-year increase (up 10% on an FX-neutral basis).Groupon, Inc. Price, Consensus and EPS Surprise Groupon, Inc. price-consensus-eps-surprise-chart | Groupon, Inc. QuoteGRPN’s Quarterly DetailsLocal revenues of $114.7 million beat the Zacks Consensus Estimate by 3.71% and rose 9.3% year over year. North America Local revenues increased 12%, while International Local revenues declined 1.2% year over year (5.9% FX-neutral). Excluding Giftcloud divestiture, International Local revenue increased 8%.Consolidated Travel revenues of $4.7 million missed the consensus mark by 2.26% and increased 8.8% year over year. North America Travel revenues increased 10.3% year over year. International Travel revenues increased 5.6% in the reported quarter (1% excluding the foreign exchange effect).On a consolidated basis, Goods revenues of $3.4 million missed the consensus mark by 28.14% and declined 34.9% year over year. North America Goods revenues declined 50.9% and International Goods revenues decreased 20.4% year over year (25.2% excluding the foreign exchange effect).GRPN’s Customer MetricsAt the end of the third quarter, Groupon had approximately 16.1 million active customers, up 4% from the same period of the year-ago quarter. However, the metric beat the Zacks Consensus Estimate by 4.34%.The company had approximately 11 million active customers based in North America, beating the consensus mark by 7%. GRPN had 5.1 million active international customers, missing the consensus mark by 0.97%.Operating Details of GRPIn the third quarter, Groupon’s consolidated gross profit grew 8.7% from the year-ago period’s levels to $111.8 million. North America's gross profit increased 12.8% and International gross profit declined 4.1%, excluding the foreign exchange effect, on a year-over-year basis.Consolidated gross margin expanded to 91%, consistent with the prior quarter.Selling, general and administrative expenses fell 4.3% year over year to $68.3 million. Marketing expenses increased 14.3% year over year to $41.4 million, representing 37% of gross profit.The company reported a GAAP operating income of $2.2 million compared with an operating loss of $5.6 million in the year-ago quarter. Adjusted EBITDA increased 18.8% to $17.5 million.GRPN’s Balance Sheet & Cash FlowGroupon exited the quarter with cash and cash equivalents of $238.5 million, down from $262.6 million as of June 30, 2025.In the third quarter, cash used in operating activities was $20.5 million compared with cash used of $16.3 million in the year-ago quarter.Groupon reported a free cash flow of negative $24.6 million in the reported quarter compared with negative $25.2 million in the previous quarter.GRPN’s Q4 & FY25 GuidanceFor the fourth quarter of 2025, the company expects revenues in the band of $135-137 million, indicating 4-6% year-over-year growth. The Zacks Consensus Estimate for fourth-quarter 2025 revenues is pegged at $121.88 million, indicating a 6.47% year-over-year increase.Adjusted EBITDA is expected to be between $21 million and $23 million.Groupon expects a positive free cash flow for the fourth quarter.For 2025, the company expects revenues between $500 million and $505 million, indicating year-over-year growth of 2-3%. The Zacks Consensus Estimate for 2025 revenues is pegged at $504.5 million, indicating 2.42% year-over-year growth.Adjusted EBITDA is expected to be between $70 million and $72 million.Groupon expects a positive free cash flow of $60 million for 2025.Groupon’s Zacks Rank & Other Stocks to ConsiderCurrently, GRPN carries a Zacks Rank #4 (Sell).Some other top-ranked stocks in the broader Zacks Retail-Wholesale sector are JD.com JD, Home Depot HD and FAT Brands FAT.JD.com and Home Depot currently carry a Zacks Rank #2 (Buy) while FAT Brands carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Shares of FAT Brands have declined 72.4% year to date. It is slated to report third-quarter 2025 results on Nov. 12.Shares of JD.com have declined 22.5% year to date. It is slated to report third-quarter 2025 results on Nov. 13.Shares of Home Depot have declined 15% year to date. It is slated to report third-quarter fiscal 2026 results on Nov. 18.Zacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Home Depot, Inc. (HD): Free Stock Analysis Report Groupon, Inc. (GRPN): Free Stock Analysis Report JD.com, Inc. (JD): Free Stock Analysis Report FAT Brands Inc. (FAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks