Groupon (GRPN) 13 Feb 192018 Q4 Earnings call transcript

Company Profile

Participants

Heather Davis	Vice President, IR
Rich Williams	Chief Executive Officer
Mike Randolfi	Chief Financial Officer
Ygal Arounian	Wedbush Securities
Eric Sheridan	UBS
Sameet Sinha	B. Riley FBR
Tom Champion	Cowen
Neeraj Kookada	JPMorgan
Matthew Trusz	G Research
Michael Ng	Goldman Sachs
Tom Forte	D.A. Davidson
Deepak Mathivanan	Barclays

Call transcript

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Operator

Good day, everyone, and welcome to Groupon's Fourth Quarter and Full-Year 2018 Financial Results Conference Call. [Operator Instructions] And today's conference call is being recorded.

For opening remarks, I would like to turn the call over to the Vice President of Investor Relations, Heather Davis. Please go ahead.

Heather Davis

Good morning, and welcome to Groupon's Fourth Quarter 2018 Financial Results Conference Call.

are Williams; today Randolfi. CFO, call the CEO, and Rich Mike On will following your February of and to and XX, forward-looking reflect only The responses as questions discussion management's view XXXX include statements. today, forward-looking materially differ expressed in may results statements. from Actual or those implied our

way easily media promptly Additional our stockholder quarterly files factors corporate could Relations filings website XX-K. SEC, our our postings. that a and with of potentially the SEC, today's finding Company. press social We our Company other included as makes the letter investor.groupon.com information Groupon and Form to the at or Investor about results the the website is in information, this risks furnishes select use encourage release with available information impact about press that financial on governance and our investors and in reports releases including

the these On EBITDA, Relations discuss website, following of SEC, Investor reconciliations each press adjusted non-GAAP posted measures, find we on U.S. measures, our with In the release financial GAAP. and flow. our also call the of which disclosures you non-GAAP today, with is regarding cash filings including additional our and results measures the FX-neutral will will free

as the we with unless exception As that are of All And reported. to the Rich. results profit to that, reported. call, year-over-year call as with to neutral, all turn this gross otherwise customer, note our discuss during comparisons, growth refer I'm comparisons are over which stated, gross FX happy per profit

Rich Williams

additional site. strategy. had posted take that, some discussion Relations contains to to discussing Investor and which your and XXXX hand as results, our our letter of then well our Mike some I'll the for read With questions. call. to as joining look quarterly questions. the color over forward we'll our yesterday thorough And call XXXX we a our on to It taking thanks stockholders, quarterly Heather. Thanks results opportunity to conference everyone Hopefully everyone's for our We

Mike Randolfi

to year. EBITDA Thanks the prior Rich. the $XXX Adjusted of fourth quarter compared flat in was million

For X%. In generated the was million, anticipated, profit or lower EBITDA America, our XXXX, down business. Goods $XXX gross of we million, of QX, than profit X%. is $XXX up year $XXX international gross North adjusted driven $XX full million million by In

While it North million, customer call. was North QX America on with America X%, our as our Goods profit optimize to was QX headwinds versus million gross disappointing, prior-year $X earnings North X%, down America discussed gross million or our largely continue was $XX given up million, or we performance QX line for efforts. profit gross local headwinds. total, of in North continued we the as expectations, customer America we highlighting was profit period, traffic gross $XXX In last benefit up XX-month trailing $XX per see profit segmentation basis the in a to for was $XX.XX, on continue traffic X% generation. long-term

North million million, Goods America, or $X $X lower resulted highlighting International margins expense International was X% gross platform $XX reported. as demand were Turning a million. In QX X%. fourth basis Goods, $XXX additions, quarter, With expense marketing new the per $X the trailing a million year-over-year. Including consolidated new International marketing quality for $XXX we we International million in local and customer aggressive gross season. up competitive pricing gross profit offset XX-month was $XX.XX, International QX million, profit by down on which $X International Goods In up profit X%. and quarter, QX holiday was increases In million we or saw down million XXX,XXX promotions to across down to customers X%, in units, generated a were basis, added on our the the highly fourth base. and $X with of drive that, or gross was in International, customer up International of net profit

North Our International, lower our was customer America $X decline $XX to QX customer XX% lower XXX,XXX continued and customer contributed was segmentation, as acquisition fourth SG&A ongoing traffic, million compensation. for continue marketing million million, this and brand. refined invest performance-based efficiency to quarter. In the up along we or quarter efforts with XX%, or in down the due to $XXX

quarter for $XX fourth authorization. the $XXX share X.X During on we repurchased the with remaining million million, quarter, shares repurchase million ending our

to cash XX, XXXX, Free flow IBM December was of of million the revolver. million, free of that our than excluding XXXX's had impact flow, As we undrawn XXXX, of million. more in $XX $XXX addition cash $XXX in the for cash, million $XXX double settlement

we will the traffic expect Groupon, at of convenience time, are platform. same generation building headwinds and we the XXXX, continue, For towards focused increased leveraging that while of on next our

continue to We As around we approximately will and to expenses. billion. remain revenue you've that XXXX our come $X.X operators disciplined intend anticipate expect, be rigor fully will

customer We continue current expect gross a customer increases in of North profit the in decline. offset meaningful will XXXX should per and portion America trends in that customer

concentrated million. adjusted and International lower SG&A anticipate with profit gross coupled for $XXX year, We gross this a mostly slightly year. our anticipate to basis, control, year per EBITDA customer investments is XXXX We we increases approximately and EBITDA the our profit, in continued cost or and adjusted consolidated help million will and marketplace expect offsetting of customer in gross in of for $XXX with expectation project leverage with drive our conversion the continue lower XXXX On marketing the base the profit we beginning to grow mostly declines more.

we revenue to gross million. the first in $XX of around mid-XXXs expect for to be that, the approximately million, quarter, and adjusted outlook let's EBITDA our $XXX questions. open profit With is For the call

Operator

Ygal line [Operator your Instructions] Your open. question Arounian from Securities. from Wedbush comes is first Ygal,

Ygal Arounian

and the time. same at my ask first I'll follow-up question

mention there improving behind efforts the changing those product So, first, product, around of step-up XXXX, your around lot specific and a marketing - with the changes. in the a obviously real no revolving being investment, it was

that's familiar and your selling on kind and the talk you discovery? how to consumers of and can greater necessary card a performance you voucher-less or new the view on So commitment both Would then, open Groupon local Travel becoming a side the behind going get around you side discovery Thanks. under linking the what's platform, based marketplace brand becoming into all of and And and sort platform? do comfortable about with portfolio? and merchants the fitting business ever similarly, for in of segments local on them the think leaner the marketing view of Goods Goods

Rich Williams

I marketing. Mike he guess, I think, and in that the question it's as and fit. first built step-up and the sees and we how most ultimately, This we're I in is experience quickly matches on experience, most a brand Rich. proposition about the that would color when couch add that sustainably foremost the is, the and think I'll But, is experience out. great relates great through start the putting the investment least I about how product brand think can think that and we to product the

and said year, is, because it's actually expanded on first at really our least refining product delivering of concern significant prop, this experience pretty amount as the the brand easy supports of part the of that and of and really going going be kind experience various message. are marketer value So, historically my efforts, to when in ads magic that a a to spots go was build and ad app deliver consumers large to just the is they they creative The site what or platforms you TV different. and experience actually your get new all and to a be intercept your that

think with down making product marketing. and then have I our really just we that focus and here the to amazing So, support and double focus efforts on

that overall. our probably well to marketing as I we around changes investment consumers, channel far we're marketing, connecting size I and challenge as that expect has a we perspective, Goods is a to been solid the where major a in product potential. both Goods as driver engagement the I over and we more expense us our some see how for expect question. - would allocated, again, overall With just expect marketing opportunities. how investment, from how where changes how I probably key with International, isn’t significant some allocate again, of Now years. marketing second, mean, think allocation wouldn't marketing good first, to there. we're But going great of really it's Travel, changes levels direct

of there more of focus and to bridge there efficient really overall engage have a Goods to with it version to volume. localized marketplace. our local driving We our is a for different very units at a profit, more Travel Goods lower But, and primarily. lower and different customers vision broader again more competitor, business good continues us we're trying travel, quality albeit that been gross eCommerce just and has is us Travel focus and and help than making build this typical

We specialization product more drive-time and locations, are have you we we couple our that of within in A with travel. tours, what Travel our do, is city lot at drive look unique which then hours when oriented. of a a support and again destination

Travel fits So, local marketplace. very the our product much

of our sell our about our them, businesses all customer it's both think that - they them? the fair base. question. we Would share a consider thing Now is to on of I

businesses think at at when an these integrated look So, business we as it, customers is Groupon. this Groupon, our of

us increases and at think those of - to that's product, lot So, we focused. it, more our attracts a our been I bring look of we better cetera. and to there's there, really opportunities partnership rates, in that's to for customers, on that we're economic et more I improve of is the a focus as there differentiate how the aspects do less And of opportunity think inventory conversion where continue improving

Operator

And Eric line Sheridan UBS. your your Eric, open. from of next comes is question

Eric Sheridan

the the on to we and before tease velocity the customer if continuing sort about relative we back think have about platform into think tried phone of think their just promote spend the as to about and allocating How and behind trying customers XXXX the pathway ROI much. should have XXXX even dollars to look continue them of customer retention how relative of Maybe with re-engage promoting you Thanks shopping and that maybe app could arc do the and so into acquisition, growth? out, process? through re-engaging you versus beyond, to

Mike Randolfi

for you that question. Thank

then supply letter, build well. bookability, on with applying and mobile Eric, all the think, works to and commentary to And continuing International it experience, overall expanding improving improving I it product, it in side, I North card it to enhancing first, experience. International know all we includes know, the starts with as shareholder high-quality and mean, well an Rich's that platform our the includes I You customer taking what linking, on America International the and think starts

marketing a from ultimately goal and conversion. there your experience, a then And XX the standpoint, then to And last start. the that because over then of consume consistent continue marketing, XX customer conversion to the a one to improves month that marketing. level payback. ultimately for goes is higher marketing what it few that's years. to around would thought so we ultimately ROI improve And and how The make is think has process it have you we expect that about been into pretty is, easier way I the is the them to for think on about And look

returns higher the have acquire conversion. perhaps been existing have that us before Our therefore to that customers, goal higher improve economic customer have but economic, and the things in then in wouldn't investing gross both be ultimately experience, level lead to become to the going but customers of for ultimately retain improved result of that profit is customer also give per because that to and are ability

So, that's our experience, is increased that's our goal and targeting on conversion. customer focus why particularly

America this throughout in - year, that our into into that's strength trend that even in go to GP international, as and we is have the see we year we about North we would talked progresses continue a continue customer, and we As would commentary XXXX. expect per expect potentially in what both to

Rich Williams

in Whereas of allocation guess, part I question between a only your retention, a as I U.S. our the countries picture little - Those earlier much add, think our most International, would of in we're and International outside in acquisition room markets. is XX our Eric, very America. and between different penetration lot or The is of of to a those in we - countries just paint rate. thing bit into re-acquisition XX penetration of increase there's are - or level North I'd really about

balanced last on more America, the granularity a in customer North we've our and the couple acquisition we've that as new and of over deploying of probably improved customer quality is biased International little So, probably ability talked and getting taking and about level more how bit value. a re-acquisition bit quarters, improves customer in towards quality our the predictability really customers high-quality door, whereas predict in identify to retention we're a platform, we're and and better value of and approach as

but bit start of we a North generate new all the we're the the us higher over kind to So, they're time same intelligence, to little more there really aggressive America, International, feeding that of in - a that is on leverage to scale has same customer have acquisition marketing the being same fundamentally automation here. off systems, in enabled allowed generate difference us

Operator

from comes Sameet from next Sameet, B. Sinha your line's And Riley FBR. your open. question

Sameet Sinha

on side. more one the I numbers guess, the first

along more expect you flow marketing 'XX. free flow with if headwind would the out? could on investment do for continued your to - working guide this the domestic? conversion And the capital plan higher thought SG&A CapEx question So, Plus segmentation - the you it and but you higher need you're XXXX be Is about losses from adjusted all a the about talking you. where I Where from of losses, Groupon saw Thank transition? is, I there talking to you We that the is also more you 'XX. on to EBITDA XX% think the customer International, cash elaborate help throughout build seeing year? process, free domestic? the you we're to fall in investment flat marketing EBITDA to mean, versus shift cash second And brand levels, and elevated kind in do understand year, need in

Mike Randolfi

Sure.

cash trends I EBITDA. would the our with generally cash think adjusted free aggregate would to on flow flow, free So, that, about in way I trend in expect

regards to that to and expect you'd free-to-claim to capital as levels EBITDA. like shareholder Richard capital working degree are of with you all similar dynamics Plus, Groupon product. his time would cash free have to likely levels the different traditional over flow adjusted you're Card you not the has generally voucher leaning linking of I model. With us a closer similar So as could - card of And them see have in greater that linking. highlighted our in working constructs, letter, existing be

as, customers our potential EBITDA. see the apart. a you in we to thought GP the time, generally we this with billion So our before, just average would than mean, I customers we next and the acquiring. would we make on is, year, International that ultimately negative that return to marketing within to and over customer is Rich this of quality you declines efforts. a on where in in some to invest we we're regard marketing year, customer linking, continue want but same per just are customer time, making would those return One about customer get dollars. an period not trends we market we transition see the and In and the acquisition general, I adequate I in of increasing less a material is, sure two acquire pieces, separate with in flow highlights are how card touched there couple increasingly to we overall an get to America, a and the generally aggregate, customer the add thing still customer, earlier. refined potential adjusted invest see we customers, been a about I mean, dollar of say, and North have I we is of and we and that a we early marketing, per on would dollar the you dollar expect our Rich said necessarily easy X.X that, GP not adequate innings. base. untapped not large a very that. has mean, to In at we this we're of in on high International, granular International and get acquire. receive have see going thinking in think With an trending North which on I is, bit have if do, able reasonable while headwind a have to I I from America, sure be to maintain retention through what in in free you trends a And how tease over still focused things think think there's cash that, our we're back time in and And value

add customer the as and good for in it returns. influenced we're But to in going investments other disciplined Now, is, and to well. trends marketing just base obviously, as good well thing we is can very getting I those traffic with the would make lean returns appropriate sure dollars, where by free that and influences our our get also we're be

Rich Williams

Yes, platform I see in customer to as that a any we've things that letter with past We XX But in to that trend. look just something we ultimately in We front, we're investing count smaller to on of of intelligently customer mentioned vanity North those hardest have one also it's productivity metric. that's to over customers get it not by that. probably in to a Sameet, want dollars conviction America, perpetuity the has can't and customers the be the at don't and of grapple the continue It's your helps that us you're the add and base stretch. quality - XX I'd is what but months is last your get only the decision accepting. really had allow the our you the been about thing that that ultimately stockholder really around, blindly

value goal people to question to kind creation here really we that use we requiring around own. that come quite of get need - to and it's is, product imbues is love building that Our your and with frequently back ultimate get have and in repeat use goal to that naturally, time just sticky need over product they place less that their the and that we on to the the brand the - marketing behavior

I So here the diligent that, while going we're we're really think to in just really building that's be the core dollars. and

Just time. clear, that working is going but super to that, it active an We're to that actively the we're accepting be of accepting we're not in fact near down, number term, go the as of blindly. come decision and investments from how customers over a build market will on reverse level. strategic brand And to and we that and to lot we more the smart product a targeted and how

Operator

open. And Champion Tom, of your next comes is your question Tom from line Cowen.

Tom Champion

the transparency. for Thanks the colors all and

Just address at It and curious the if email you seems EBITDA Google in XQ. the were print. like could XQ shortfall headwinds known

got So you. on rebrand then you Groupon just bit a worse. decision Thank the more elaborate to could Plus? I'm anything curious And just little if

Mike Randolfi

first the part. take I'll

versus for variance that right know the what way. a We our Goods that, the terms Goods fourth area. a in primary good really overall We the decision primary our is that the International in the lean decision platform. it a on was expectations. in resulted our did in Goods to think in That be position fourth in holiday GP with You made margins was the in season the and to side. than market What in lower saw and driver is our units and lower the International very International we - of the quarter And lower of capture market in competitive the that the we driver performance result quarter promotional in saw really came expectations on increase.

Rich Williams

it see are card piece Groupon to product, number it's try permutations and platform be it time, periods to think being of just exactly engagement low Tom, are the period of if stretch, a we to way order week which or about to but a - in that you're right. within dollars that back. right discount to of that I just Plus that Groupon keep product me ultimately QX product on lot linked opportunity it's restaurants continue it's how dynamic in keep apply of we a understand, we've that those again cash lot works? products the of have high discount decision via been something really And - made linking of can think in targeted Yes, oftentimes, the I always in of make that's an works to to will drive on lot a are significant out version to question on to of testing important frankly vein a And primarily a the move to do, volume just going around volume the given giving and cards and say, try is portfolio the going really potential short low product again card push a period QX, really made it we ultimately, call I remembering again we with comes people credit what make the just just the a two-and-a-half and values. to space, on down to we going a your has this rebranded, our and average think G to is are really one it We platform. we happens Plus

when to other again, version to specific the customer to start into linked So, of make card part it's of play to - pigeonhole card more to we us or room not us give things. and linked a confuse

for to much how just as here built to platform product and as and linked to the card core it ourselves as much - around to that works just possible innovate make again want possible we as avoid As room we the give confusion every consumers we've day.

Operator

from Anmuth open. And JPMorgan. from question your your comes are Doug, Doug next lines

Neeraj Kookada

This on is for Neeraj Doug.

headwind coming for at million and talked you confirm, to wanted I 'XX. around about traffic the just $XXX email So

so it similar impact be, like we can is a of 'XX? or in expect said seen that with better-than-expected and impact Could was you vertical the would one had the where on update versus partners quarters the or particular like guys three you that partner adoption? in offers three-p that because kind current 'XX XX% from full-year have second number or a a you for marketplace. 'XX us two So dollar you any And

Mike Randolfi

On you're email piece with about that and XXXX, to XXXX. be but million regards at sized email. the piece be the the it, of Google, headwinds right, to that to disproportionately million. going I It's mean, $XXX going we for in $XXX not a are of Google emails larger is

plan going and view the trends it that overall Our necessarily we build that. we've into gets continuation and trend is not better, our get those the XXXX given contemplates today we're guidance of upon worse, that but assuming doesn't and

around the coming level And percentage in so our regards of the we've here. of still to third-party, we guidance provided in With headwind offers a we would that's that XXXX similar reflected expect right from experienced as XX%. XXXX and in it's

have so We a of excited the - we're that deep with and strong partners really a book about order potential we're there. really in potential conversations really strong

also inventory it that continue we experience, to have We on large been how - customer Groupon a number partners consume making of and enhancing large customers signed just that number and a consumers experience. a better work the improving have of

that there's a So we're and excited potential lot think there. about of

Mike Randolfi

really little really of that just for a and said, - holiday volume during coming - out what availability the Mike a of sure of site Yes, development similar, make on and to here our in. basic all reason to color, The peak we really, have managing on all locked offers Neeraj, is only we the that thanks substantially hands down are of as speed bit we're deck much that amount for and that our a question. big the drive

and XXXX. that's accelerate as and in be investments increasing integrations down partner pipeline mentioned, we're there, and to slower during out Mike efforts on there but to product going our over just pointed as course new integration our stockholder the doubling volume So are I in of purposeful, our engineering QX and letter,

Operator

Trusz Your next Matt, question of Matthew comes Research. line open. from is your G

Matthew Trusz

factors of deployment? making your long-term as trends, far the on dynamics, decisions and given sense platform your have discuss to strategy strategic and consumer the level visibility and your current that comfort your you Just industry exposure capital external as you can to with make of

Rich Williams

color, fit. But Thanks always around you in that Sure. and was Matt see a and - there I obviously the is there's lot for add mean as Mike, moving marketplace this just you're factors, about was to well in work if tended company to that, that thinking born are hard. this times a economic and when - pure tends that logically recession would a

that know times, of also level. we boom deployed local but when So during is a this at income a is lot discretionary

around are like environment and very, business way big of major just mindful very connecting offline we're also not online and majority those competitive swim is the established, by economic small to is very, land lanes trend in and a impacted them a commerce that of and lot of I acute under-served vast that most are So into closely. component. pieces factors and that geared really closely more external watching tapping that very watching But, think, again, of strategy our

So capital we're We think, comes always When that, at that. value mindful looking it capital to watch allocation of we're however, that. to allocation shareholders. I between balancing within our returning

more certain with years factors say inorganically, us authorization, expect to would But easier us the balance us repurchase moving amount be and opportunism on for last opportunistic some where the ended million where we cash. the conservative I we'll us for side You the to have to have QX would to external I forward in and news significant may organically latter, and million moving over we to year invest remaining $XXX being that share opportunistic forward. make buybacks close with be that on saw a opportunistic our we in and continue how very is, close we've there. few in been good $XXX that aggressive begin

solid to it generate and an going have forward. flow cash We free ability

the as in to think organically really to to - accelerate I platform, good business ability our in our value a we're position we return as aggressively invest shareholders. balance well So and inorganically to

Matthew Trusz

competitive quick part. follow-up the And just on

As helping local conversations as this get do in changes the of and you think traffic just their web opposed you we to based Google hurts headwind, your again. other think with about it's on competitor deeper platform? companies, Google how space course, or a merchants to UX this as UI Thanks much that into

Heather Davis

with Matt. big Thanks, side really think their respect strategically merchants about I of them important and as feedback other significant in products as ad worked customer to us Google think we haven't mean, seen with It's question. with then I on inside we're Google the there any a ways. well great thing is, we from to

You're search now throughout console there Groupon weren't ago. all buttons that by seeing that the long not that

other overall always customers of with we're to in experience. what results deliver organic how give search. I them is But of be user expect to based the is would on ways really So different continue of they they Google exposure. going And side are believe as seeing going better have search to a to changes they to we're Groupon most working kinds in trying again, the optimize

we to good adapt we feel have So our over generally that's unique a new it pretty time those to space content. UIs ability because where in

as very becoming what local, quickly We of together. this all of we largest of buyable catalogs one inventory the aggregate is have inventory

content that the very, but few very people want, content that people that's have. So lots of

of given super a to we disproportionate continue it that can can a we a closely But we we about space good over in space arguably ability we optimize. to continue continue ways to participate feel and our in the that or replace that way our uniqueness feel feel watch time content. we So is

Operator

line Ng Your is open. comes Sachs. And your Michael, question of next Goldman from Michael

Michael Ng

the XXXX Plus. on a EBITDA target one on have Groupon follow-up I and

type I of that and you. update And enrolled, past, any Thank enrolled do card missed Plus, the merchants then Groupon on $XXX-plus redemptions? target underlying XXXX, base talk First, level you from and of and can to what EBITDA the the on about it, apologies whether but OpEx are in a growth you confidence gross million Groupon to you've profit there? that XXXX and the your assumptions that disclosed KPIs have perspective an leverage Plus if relative in

Mike Randolfi

Sure. you customer generally see of On with the part per overall what customer. around customers look XXXX at continuing I'll overall first is, trends EBITDA, XXXX GP our that. trends, in that thoughts if is increasing our we take on our

greater and Now, moderate, start we per those go customer trends starting into you as believe have GP of to flow through. customer benefit to XXXX, a the then we

side, customer. International would see the we customers the On foreseeable GP we'd per fourth in I - growth and the believe both would future, expect for foreseeable future,

to So or gross about, profit. continue we've you on of ultimately aid then will that front, continue think to the disciplined we to we operators be Company. our both continue talked have the continued And and within we expect should - the have become those of the with be effective we as culture we've to to operate efficient and that dollars we SG&A embed idea to

So to that's based. P&L, payback. to the should major We're last to the SG&A - piece of SG&A going continue that last work you the on to in future. generate be try to this piece And ROI continue to to expect we'll just focus to ultimately continue leverage, marketing, year, aspire be then our not generate but the going XX-month leverage XX- to would which

the together, efficient And a starting XXXX per into those of so, more America, International on but to North on customer customer cost GP continued add International continued benefit customer per and I moderate, if GP base. trends customer the growth in all see I benefit with continued going

Rich Williams

made like things Michael letter, versus so the cards see we've on continued we've enrolled, G X million to we're million notes And in enrolled on of approaching Plus, some cards over improvements this or but sequential stockholder just X well transactions a last improvements continue to year-over-year continued so of over locations, redemptions sequentially, on the large space. again very there, do improvements merchant again now and and at in that million about quarter. X,XXX We're

to those bit, I'd - continued focusing start linking ultimately, stockholder getting Plus. more slow of really us letter, focus really on G to So some one and to progress, our you really card-linked I to in Groupon in actually should experience say energies on a places expect our Plus. version little G of said mechanism that down scale versus again, redemption But we as a trying just card making as of the continue part the on

that and right these start may long-term back outcome in move see half some product we a where But the I for some bit the we'd of our would allocation we it's as so to think some start one mentioned metrics. new using be we rollout, that new driving slow year of expect into as the I acceleration to impression some the in experience of and here we'll rollout So, down education on letter.

Operator

Tom, is Tom comes next of your line your Forte Davidson. open. And D.A. question from

Tom Forte

my taking question. for Thanks

question So the Rich. for, is

you management efforts perhaps scrutiny to need So very opportunity make without would private, to shares been business time from go Thanks. Street. depressed. may make the to admirable, it the of reconsider, to the give Is best despite but your and Wall remain it the you then adjustments efforts have the

Rich Williams

progress the for do value a have things Look, surprising you continue of And that to right our the and the foremost best is know, to shareholders, open-minded first - completely past, in to think, is we way a then, lot looking the the as and and make but our value mind, our there we over there shareholders unlock Company, eye we've not this ball it's And for management not that take one believe are strategy for deliver is team. not on time. I in the thing for interest in we of right shareholders. do always as to that's a can off is said to

different can't things Things think now need that's can't works understand experiences be needs just platform to required in make our this to So as redemption deliver We've our it option bring like much is strategy where and to we're an things how the be here card-linked especially is a to just we've of an our been. better. I more at kinds lot and can't right being that engagement here, with and platform, we trying moves where option of are and on relative that ticketing been just booking things like biggest like different be accelerating on that direction place kinds mentioned now I works. it the we that letter this an showing because can of option. life, aggressive a feather to our - to in strategy just move focus It

continue being to for we to will ways make in we open minded, focused bold through platform be - we to we're be enhancements and the continue value any look investments to the shareholders need while accelerate our mechanism. very unlock the year for and need on changes on make that So We're product to this to going transformation. to really

Operator

question And from your line is Deepak next Barclays. open. Mathivanan comes from Deepak, your

Deepak Mathivanan

see do growth to I metrics. can you efforts reason The you you that unit confident gross achieve customer, new I talk on can customer in because, so marketing from you hard seeing of lap is ask back, cohorts? economics? realize Thank in that that you're are you metrics, similar specific what optimization this at reported about XXXX per activity in spend impacting you of once and retention acquiring, customers much. but the feel these that It's customer profit is repeat kind question terms that through

Mike Randolfi

Yes.

touch So and take second I'll first the part. then on the I'll part

generally higher we see we've per seeing seeing who So recent within we're trends, acquire as part, GP and we that, seen some than terms terms positive the of historically acquiring we're of what choose more we we're are is we generally as where retain. in getting within who what to cohorts in customers, the customer first refined

good way we our the we that segmentation marketing our dollars. we to and it's very efforts on have appropriate return think achieved So ensure feel ultimately about

second the part, there's elements On two there.

you potential you is customer today ultimately, that that on cetera. per the improving the card because what's value of you increases your over can out the mind quarter, customer to likely growth, return they're which base the First, consumer et of is able really the of in the time convert of, us Keeping base. experience think because by being GP our about same average very for conversion customer purchasing you're and pool higher, acquire, experience. customer linking, important, is over customer customer, you once customers supply, With as really reason time the frequency unit, the basically bookability, power how though, quality if at what's size increase customer approximately putting is because increase platform conversion, that acquire the said, better, evaluating there we're better simply maximize potential a time growth potential Hence the on and - focused from is. to increase you if a have potential to that just a aside, of the increases the

see the over we is in is, time, like customer profit power really standpoint to our base - there from where customer. the per in of would growing So, America, but to increase frequency, North certainly increase particularly lot is potential gross a a

Rich Williams

customer what outcome, guess grow that's believe really flow that uncomfortable of Deepak, point, time be order and customer we time to base period reiterate I to on for massive I but unit through. goes our refine over economics potential it's front, of to customer current we don't a said and as quality one mean an that's the Yes, the the the that base in it's do I'll because to amount going we of is just continue base of in Mike significant can America, to the need line outsized kind a grow bottom on all important to remember, deliver we Mike's growth, has just North more

the is of upside invest do we the we in as that So customer. that more well can the that, more

is requirement From to GP view, have we're stronger one which a have is base really a - call looking So it's a but customer. requirement a customer establish about quality not a our growth, with not here. per and virtuous to to bigger really it for higher that it's there, healthy cycle higher option

Operator

We have no further at time. questions this

participation. you conclude your So call. for this our conference Thank will

disconnect. now You may

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