Groupon Q2 Earnings Surpass Estimates, Revenues Increase Y/Y

Groupon GRPN reported earnings of 46 cents per share for the second quarter of 2025, which beat the Zacks Consensus Estimate by 48 cents. The company had incurred a loss of 25 cents per share in the year-ago quarter.

Revenues of $125.7 million beat the consensus estimate by 2.32%. The figure increased 0.9% on a year-over-year basis.

Region-wise, North America’s revenues of $100 million beat the consensus mark by 4.07% and grew 1.7% year over year. International revenues of $25.7 million missed the consensus mark by 3.96% and decreased 2.1% year over year (6.6% excluding the foreign exchange effect).

Gross billings totaled $416.7 million in the second quarter of 2025, reflecting a 12% year-over-year increase (up 10% on an FX-neutral basis).

GRPN’s Quarterly Details

Local revenues of $116.7 million beat the Zacks Consensus Estimate by 2.33% and rose 2.3% year over year. North America Local revenues increased 3%, while International Local revenues declined marginally by 0.9% year over year.

Groupon, Inc. Price, Consensus and EPS Surprise

Groupon, Inc. price-consensus-eps-surprise-chart | Groupon, Inc. Quote

Consolidated Travel revenues of $5.6 million surpassed the consensus mark by 16.48% and increased 2.7% year over year. North America Travel revenues increased 12.5% year over year. International Travel revenues declined 21.3% in the reported quarter (24.8% excluding the foreign exchange effect).

On a consolidated basis, Goods revenues of $3.4 million missed the consensus mark by 13.6% and declined 32.2% year over year. North America Goods revenues declined 58.2% and International Goods revenues decreased 0.3% year over year (5.4% excluding the foreign exchange effect).

GRPN’s Customer Metrics

At the end of the second quarter, Groupon had approximately 15.8 million active customers, unchanged from the same period of the year-ago quarter. However, the metric beat the Zacks Consensus Estimate by 1.22%.

The company had approximately 10.8 million active customers based in North America, beating the consensus mark by 4.45%. GRPN had 5 million active international customers, missing the consensus mark by 5.30%.

Operating Details of GRPN

In the second quarter, Groupon’s consolidated gross profit grew 1.6% from the year-ago period’s levels to $114.4 million. North America's gross profit increased 2.9% and International gross profit declined 7.7%, excluding the foreign exchange effect, on a year-over-year basis.

Consolidated gross margin expanded 60 basis points to 91%.

Selling, general and administrative expenses fell 8.5% year over year to $70.7 million. Marketing expenses increased 13.4% year over year to $41.4 million.

The company reported a GAAP operating profit of $13.1 million compared with a profit of $4.4 million in the year-ago quarter. Also, adjusted EBITDA declined 5.6% to $15.6 million.

GRPN’s Balance Sheet & Cash Flow

Groupon exited the quarter with cash and cash equivalents of $262.6 million, up from $226.8 million as of March 31, 2025.

In the second quarter, cash generated from operating activities was $28.4 million, up 85.7% year over year.

Groupon reported a free cash flow of $25.2 million in the reported quarter, reversing a cash outflow of $3.8 million in the previous quarter.

GRPN’s Q3 & FY25 Guidance

For the third quarter of 2025, the company expects revenues in the band of $117-$120 million, indicating 2-5% year-over-year growth. The Zacks Consensus Estimate for third-quarter 2025 revenues is pegged at $121.43 million, indicating a 6.07% year-over-year increase.

Adjusted EBITDA is expected to be between $12 million and $16 million.

Groupon expects a negative free cash flow for the third quarter.

For 2025, the company expects revenues between $497 million and $505 million, indicating year-over-year growth of 1-3%. The Zacks Consensus Estimate for 2025 revenues is pegged at $500.25 million, indicating 1.56% year-over-year growth.

Adjusted EBITDA is expected to be between $70 million and $75 million.

Groupon expects a positive free cash flow of at least $50 million for 2025.

Groupon’s Zacks Rank & Other Stocks to Consider

Currently, GRPN carries a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the broader Zacks Retail-Wholesale sector are The TJX Companies, Inc. TJX, Worksport WKSP and Performance Food Group PFGC, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of TJX have gained 9.3% year to date. It is slated to report second-quarter fiscal 2026 results on Aug. 20.

Shares of WKSP have declined 61.4% year to date. It is set to report second-quarter 2025 results on Aug. 13.

Shares of PFGC have appreciated 16.1% year to date. It is set to report fourth-quarter fiscal 2025 results on Aug. 13.

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

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research