GRPN - Earnings call transcript Q4 2021

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Operator

Good day, everyone and welcome to Groupon’s Fourth Quarter and Full Year 2021 Financial Results Conference Call. [Operator Instructions] Today’s conference call is being recorded.

For opening remarks, I would like to turn the call over to Chief Communications Officer, Jennifer Beugelmans. Please go ahead.

Jennifer Beugelmans

Good morning and welcome to Groupon’s fourth quarter and full year 2021 financial results conference call.

are Deshpande today Damien Interim call Schmitz. the CEO, and Kedar CFO, On and questions will to as following responses The discussion your March XXXX, statements. of X, reflect only forward-looking and include today, views management’s results forward-looking our differ implied statements. from expressed those Actual or may in materially

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

FX-neutral will I you measures: release turn non-GAAP free call each On cash website, discuss the the measures our with is the following of and measures In will also SEC, over which U.S. the call Kedar. posted comparable disclosures with adjusted EBITDA, the today, our additional reconciliations to of Relations Investor these non-GAAP measures, to And GAAP. under am filings most results. on regarding financial happy our we flow that, including and press find to the

Kedar Deshpande

call excellence forward strategy May. provide and am morning, partners the our some about will the Good to for about to strategic first. on earnings myself assets, morning, This I about in go-forward operational Groupon. and I’m us by I why our putting excited lead observation opportunity Then customers going look on everyone sharing and merchant priorities next you little our and and thank sharing details start early our will today. to and a my approach I perspective bit to joining

from. is I’m I team pivotal I have bit of with be customer which the at to So, moment the crossroad excited about through built a retention Groupon’s why start me, career so little this in e-commerce, let journey. my came at where joining me and experience

is While leadership Zappos The product, most and led trade, was entire before and across by a managing spent that specifically I success. tech, the Groupon through years marketing, various biggest general lesson best not of growing believe I drew of in local unique learned word-of-mouth both only is business that it engineer I’m I putting maximize business the profitably. can long-term is I as and at to that customer new What consistent drives which positions drive manager way XX CEO. experience. but marketing, also deliver last recently needs software responsibilities first have growing experiences. me team tasked with a impact is to the loyalty. marketplace customer product the critical our a This long-term as acquisition company the COO

active customers, unique. is last is lifetime. million advanced very brand a platform scaled With helps new a create marketplace lot memories with of that forge capabilities, Our a over and and drives And a organic connections familiar Groupon that that special. traffic can globally XX people

very and these this local full I more believe fragmented. frequently merchant customers But partners. all create experiences inventory. merchants more marketplace to Groupon accelerate could Ultimately, a I and local outside our have the that with inventory job two-sided ability its customers not use I has felt progress. to through took perspective deliver customers off-line in, despite I its connect in over progress those yet more convince retention the to mindset see made Our because we last And with market, we which and the merchant to and on of experiences online tremendous value could is deepen characteristics, months potential. also local experiences can into XX experience, Groupon partners From our relationships highly had increase scale then positive expand the a company’s my growth Groupon has for tapped how stakeholders. and can Groupon new confident looking

Over joined. grow ahead have the than our I we a am speaking the firmly I customers more months, myself right excited employees, connection, world. ingredients frankly, of about even to reviewing immersed marketplace. have with I last seeking world And and In operations the opportunity believe our and I in been around partners few the have day all I the the business. strategy merchant and

my Here To Groupon love customers far. so start, are observations Groupon.

the You our customer in pages. on app comments in this offer partner can and reviews our see

are We memories. great creating definitely

In open merchant partners and customers, Groupon change and teammates and eager addition, better to help are outcomes to customers dedicated create will that for our very Groupon.

our Second, shoppers Groupon of local across has verticals. can horizontal a marketplace variety buy experiences who a with

of use and the cohort So shoppers. broader healthier much than typically and for can two are have Horizontal retention is critical frequency crossover dynamics purchase customer case important their strong create a because is the to applicable potential higher very vertical we marketplaces reasons. marketplaces. This drive acquisition

then average a our things customers. to often to example, which order with experiences, set, For higher values less have these spend we to vertical selection dining acquire but do, can showcase strong customers of

while Groupon positions in cost customer this increasing to keep long-term check customer value. acquisition lifetime the Over

highlighted, have this Third, already is but something bears it repeating. I

levers have drive untapped current quickly means global figure experience. in out to Fourth, scale when our have them a We out them on platform. feedback roll on global This we is scale. stage data that and monetize we we that network can growth, our tremendous new

massive merchant such customer data that our high customer e-mail reach infuse as can assets journey into We many we locked-in to have our partner rates location, better. make much so experience experience and and

our taking not right local of winning are on focus. today. advantage the finally, this We is in And focus

this are most We differentiated category. in

solid a progress. to have place accelerate and We our foundation in growth

scale with assets these exciting. of would A I that assets global amazing several are platform information. a customers, believe be has undermonetized, one company namely: Groupon and So

very of impacting job despite did controlling So of I factors XXXX, opportunity business. by power controllables And to am harness In the by a challenges, like our the three. great the encouraged the all and created modernizing team impacting local merchant the our made variants Omicron expanding America supply/demand by full We team Delta the our with XXXX. marketplace. local North grew inventory XX% partners, progress and compared imbalances our and year billings

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to the have most We to value be And been consistently your details need customers experience end trying in you proposition elements users have on my if important loyalty. retention. single of And our retaining will that this we learned create both Throughout to we every to and delighting instead, ensure about focus delight career, the partners. everything merchant delivering are you is everyone. long-term and interaction, I to through obsess and key

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mean? right more I give in new we the we term. future. we we of value through also to do density, our on great inventory customers, believe Practically my new coverage propositions Let redundancy. we takes the partners. that the of be inventory to our forward, impact is decision, be supply to certainty customer that that merchant marketplace merchant Groupon’s effectively inventory, both to to that account, example. long-term this all or order goal will attract many a platform can better we for over every long on stakeholders and We as around our marketplace us you does each of short, going benefits significant create me merchant job every more a which for with in with the breadth new create capacity value and create am focused our job add? partners better meeting of growth While partners change of still customers base. long-term supply for adding unlock helping Once be we partners I have we need customers the and the merchant creating ensure obsessed flywheel. for an digging our needs a are strategic algorithm that I In need balances of more to to process flywheel into depth How does of going speaking, of how should inventory and meaning in need We must listing make prioritizing what build the interest to our our is and believe of our business. supply better first,

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us using this need. only are realign us customers acquire for fact, some our we XX% management. better that using This yield and serve to can roughly suggests XX% to In are priorities

determined yet partners. merchant for most important haven’t with role we play While the to Groupon

trust building exploring, me our Let and with what through into walk I’m digging merchant you partners. first

will to ensure into partners have come again. economics want We to more and their merchant with economics, merchant to for of Groupon provide vital our out expectations we not that partner and and at capabilities we it’s again intend And Groupon information back partners, insight that this Today, they what type partner build what get our merchant from our on this front. we cost. to and capturing are

back We on convenience have and do selection trust. unbeatable customers table on always marketplace if is this value building core always where our as high. is be you again more and our customers One steps not is we and find critical on for can our proposition that to trust our we need value customer with any may observation, Customers stakes sure to area want proposition. in be viewed value marketplace, that able to in to we local delivering my deliver them customer make Building to This that trust experiences. long come remains marketplace taking trust and early But allows promise. our will to enjoy again. Local and experiences are Groupon

process refund be past, and customers merchant we area. transaction Groupon. building more refund to if will planned. get refund easy didn’t partner is from is continue To have to an our Groupon customer way the an not go directly in didn’t their this in a address proactive, ongoing if have invest giving example, we Trust as practices improved For a to the a honoring this,

service. need also customer to that great We make sure have we

contact our one should it we is Naturally, proposition. a that allow are easily but to reach into, just of portal. value customer digging customers through a their sense created how you account have We will into own we digging area give trust button are service customer

gaining. used organic marketing We to no not with. continue fuel strategy. we we in better to traction. will only our consumer focus position we customers pour I to our putting approaching the marketing. a where the should there indicate this be fuel spend Marketing be are the to to partners organic first, money will to we if of see see Philosophically, needs is will believe assess and this signal merchant best the to refine traction And when on is I Groupon With the on how marketing heightened should a begin we fire believe fire be gas fire.

consumer year better have to our leveraging information customer approach in forward, marketing moments even awareness doing to deploying capture of will traction. Groupon become growth While to big future, to day-to-day only the investment, disciplined we job opportunities In to be drive to have interactions, share look strategic consumers proprietary disciplined looking forward a going we from round. the our our marketing this where we see organic and been more you should and during dollars accelerate marketing mind with marketplace

All take at and a local we customers, the Groupon. that how will look of hard these are big needs we merchant require balancing picture of ideas partners

are to make and forward. customers a and lead We We merchant decisively a to marketplace. better benefit us creating customers to two-sided both sure us turning. flywheels do partners for retaining and move intend get will a Groupon. allow to Groupon delight I merchant this enable quickly to while job Doing need and our we partners both

business Over enhanced strategy are the another the and rest as the the next COVID impact we of aligning X from about we us operating expect variant, can our hear our and that world you to. of from to mission emerge months, yet

will continue the Is can, continue good for isn’t the this assess and then, working. two good replacing We This new Groupon? merchant this what the additional organization. working for what assessment of our efficiencies about drive questions and core with assessing How operating we good quickly Within inputs? supply as can we Is as is also framework, this is with this customer? partners? will to core processes each And density And our can growth automation throughout by be demand any we for areas. will gain with we manual investments.

share priorities. to our Next near use will that measure timeline and to will against medium-term and quarter, success I execution goals corresponding we our KPIs the

be mentioned in I to full As at that earlier, the you will position point, year. a for guidance we financial give

Groupon, our deliver even we of Groupon intention to focus customers, growth, of for profitable our that merchant within we will in high-level to become potential allow quarter review will and our means our With financial the bring customers goal our most the and lathers turn more reach. excellence that to it do on interest to and all I reach everything believe for everything forward, operational merchant guidance. disciplined, to important first the Moving tenet and is we act with full Damien us to for stakeholders. that, is durable, over value to long-term results a we create work of be greater we up This and partners obsessed to acting plan our that partners will with delighting

Damien Schmitz

and results Today, use joining to quarter first provide into who’s time today. I’ll our everyone our the year financial thanks operating fourth trajectory. Kedar, and outlook I and will XXXX provide our XXXX. quarter us insights of also full my on perspective further some financial for Thanks,

on EBITDA. and Starting year million detail cash, free $XXX in of to release We million and million the my press of including our drawn quarter encourage generated cash $XXX results. revenue, addition with on ended $XXX million with quarter positive gross revolver delivered $XX and XX-K, you profit of flow. which first more billings, fourth remarks, of $XXX and the prepared to In gross million review results adjusted million QX contain We our slides, I consolidated our $XXX outlook.

we team emergence prior As of Kedar stabilizing did In could which in mentioned despite in global billings the of latter great impacted significant earlier, the what XX% category. quarter demand grew on quarter, versus control. the the X% prior consumer versus year the we result, Omicron variant the quarter. the and significantly the And a part December, job focusing progress our a as Local local made

make We progress continue the base. also to composition our of customer improving

a We believe we at more quarter. deliver to actions more purchase building continue frequency, share active North unlock partners over capture we marketplace, base, us third and customer take healthier grew our to stronger, our time. the merchant customers for local to America aimed Within value allow which wallet consecutive will customer our

rebuilding of third As the markets, this X% and during the the up by And local growth in lower-value there. versus This composition active the improving in goods headwinds customer progress quarter. made a had in XX.X customers our customers prolonged encouraged quarter, in light base result, quarter. within the we the quarter, local especially of offset customers are we decline million our international local COVID we our the fourth

our grew and X.X local hit million customers North our merchants had made we XX% versus In active much inventory and quarter, goals. the over marketplace. Beauty modernizing easier XX% expanding on important local our product. local XXXX, team we customers result, fact, America, And approximately improvements The grew deal XX% inventory with active listings progress also since In in inventory our the restrictions and substantial making to third made the to removed quarter. fourth inventory of for local as repeat Wellness Offers our tools, In partner it merchant self-service our we we launching and Groupon. for a

self-service. launched During approximately via in quarter, the the America fourth North were XX% deals launched of

quarter more results. I’ll segment financial our into category fourth and insights provide our with Next, results. Starting

versus of XX% XXX the models, recovery XXXX haven’t Billings trends sequential basis as had prior points. and America with improvement Starting variants year COVID a has XX% linear emerged. been of expected, were volatile and new been grew As Local. North

as and do during October seen was a billings in Cyber XXXX so which far. Local Beauty of levels particularly and November driven Local Wellness sequentially the the period, levels, at the improved were we’ve peak billings of reached our recovery XX% trajectory of to Looking and the November percent intra highest quarter. verticals. point things strong by XXXX

December the XXX However, XX% meaningfully in and of up basis, we In the billings year the pull trend third performance variant back of on into versus International, Omicron XXXX. XXXX were levels continued with saw XX% versus Local this grew FX-neutral Local points early emergence quarter. and an basis prior the

Local quarter, saw similar already international intra at for pullback those given in with November. recovery of improved early trajectory less pronounced while remainder Looking the restrictions pullback across markets. was existing the the Omicron recovery emergence in the the and to EMEA, And we North of the America, in the North October quarter place America rates than in variants

As in said expect have recovery stricter. cycle before, restrictions we where international, prolonged we’ve more a and longer been

during Moving much with the Goods the run our simplifies fourth to Hitting the operations. marketplace third-party our here significantly to category. Goods in was Goods line expectations, we on our to quarter. category and more base milestone us cost allows model fixed this and Performance transition completed international a a

As basis. in a goods a we on third-party net recognize model, reminder, the revenue

P&L. the sequential but the associated in was quarter. fourth than planned in $XXX million basis, SG&A slightly to the down a on migration Moving expected, SG&A the with reflecting cloud. their lower expenses up costs were came

ensure growth focus opportunities. to in future on flexibility have fixed We costs we have we need to that and navigate financial invest continued recovery the controlling the to

across quarter. our marketing consideration funnel efforts to upper campaigns We to the and both awareness during diversify continue mid also drive

million, line the quarter to was increased profit, historical kept levels in in averages. third expense XX% of at gross and our we investment $XX investment our marketing with While which

we intend mentioned, to with advantage prudent spend. but growth marketing take will remain over our we of accelerate to to time, leverage opportunities As Kedar our

the generation free the includes cash we $XX of ended cash our with million on million, balance position. quarter, flow. cash a fourth the million to with of cash to returned In year Turning drawn $XXX We $XXX the revolver. which

long-term to with solid, remains COVID the balance and financial sheet drive of transient a that and growth. impacts provides liquidity Our withstand opportunities flexibility position we have the invest to in us

the XXXX Now revenue I’ll step adjusted back, than to we we are a deliver in $XXX first from of better but for approximately breakeven like position take EBITDA. at quarter, on Based in through this, others, a you year, quarter expect we volatility the many $XXX of to our seeing exited million Taking the million expectations COVID. entered we first XXXX.

color Let me give our more on outlook. you a little

pronounced impacted the impact As step-down believe performance Omicron further by you transient. to markets. billings U.S. on more higher variant. Delta a in and led might to suspect, has we with this both saw we this from this observed during Local is counts, case are seeing January the are last than Notwithstanding in continue With and Omicron being international headwind year, what based and Delta we a from we

rising, supply stayed we For lower both customers year, in sides counts demand cases COVID Similarly, partners. when response from our our down an November. example, were last Delta down, availability we after marketplace; immediate and from saw case and ramp and saw went of on merchant October recovery lower Local

wake isn’t we begun indicative again of weather and Local up the as February, of in U.S. are the parts has uptick of an performance future play restrictions in seeing always In warmed past performance, pattern volumes. we have this have Omicron. to to While in begun ease, out see

fully have of to Over they advanced, recovery pre-Omicron returned have the levels. past levels couple not weeks, although yet

other few a your models. for items to Turning

fully net in revenue total basis this a a a Goods revenue marketplace. XXXX, net in been third-party earlier, have will illustrate lower recognized effect our goods approximately result, transitioned been $XXX revenue we reported we on I if category the on reported. on mentioned As have Goods than XX% P&L, And global would to million To basis. be had Goods a XXXX, our as

a does gross revenue reminder, As change the not impact profit. recognition

to is that quarter for first reported what year-over-year the similar outlook quarter. performance assumes fourth we Our goods

SG&A provide for timing driven full our cloud also to expenses our trajectory associated with to the of and on the planned sequentially expenses. migration expect with we payroll-related increase compared quarter fourth the like expense year. current Lastly, our by We’d perspective

XXXX Local and billings international. to in North both America expect throughout recovery accelerate We

we see back in Omicron, recovery front organic conditions supply beginning on improve. and tailwinds gradually macro as to demand are step at due recovery a signs saw recedes to the resuming Omicron are and we Although

million full reminder, recorded our periods. prior benefit adjusted in vouchers sold to we variable revenue $XX from consideration year Regarding a XXXX EBITDA, related as a in

the than generate million full more adjusted in to $XXX be Excluding adjusted wanted this our you full perspectives in our understanding XXXX look our we marketplace on expectations therefore, full these assessment. May. year XXXX operating benefit, on first of year sharing continue go-forward than year EBITDA strategy forward quarter give expect and XXXX. EBITDA of baseline to we priorities, to to our call to an We expect while our and provide current updated higher financial We outlook results

generating reason are Typical Finally, wanted on throughout marketplace return cash growing historical some as closing insights net cash flow were is working cash marketplace of headwinds healthy our in for year, you a in we If it I in we with I expect cash thoughts. the a Kedar now going faced expecting, not transient to accelerates nature, no will XXXX be and we to is cash our back turn over flow to there local generation. flow recovery capital forward. characteristic flow of the provide why few free should positive Many patterns XXXX. a flow. to

Kedar Deshpande

Thanks, Damien.

Let of with moving we urgency. a me are be clear, sense

with both continue transparently be along good and can questions focusing and any going here I’m matters to the me As steps I along today to you we to communicate ask sure taking from to you with journey our regularly most, bad, and there. make right forward, findings, will on for next explain to you bring the expect did what

I know energized about the to progress the team’s are With updates additional sense a our year fourth lot of on operator, I and becoming Although Groupon’s will I to providing performance. look for and accelerate opportunities the be over ahead to next towards destination turn the Local, has questions up any and quarter. for to who excited full it more Groupon we work us, have by are of urgency. challenge of have I employees we couldn’t quarter that, forward

Operator

[Operator Instructions] Young is of the Your from Trevor first with question line Barclays.

Trevor Young

Great. few, A if Thanks. I may.

one. take let’s So, one them by

the When That helpful. downloads stabilization turn positive sort in expected of the users that was new customers. on marketing overall year, a efforts didn’t so indications the will we local driving any we And indication some engagement, but corner? was transactions, the First, of the That earlier in quite of sort thing? get that subset converting super positive are increased disclosure. far customers app that

Kedar Deshpande

morning for Kedar. I particular can add and this Good probably then insights some to Damien, that. is Thanks question. This like Trevor. your would on question to provide commentary more

So, way look have mentioned. first get that for think customers most the other That’s the we critical our and them And as are local to and foremost, local experience the customers most customers we important us, can the hoppers. I I customer aspect at overall base is get for us.

that North consecutive our very grown have three quarters We past America with performance. local and customers particular every for pleased quarter single in

what to forward, opportunities local, want add? do be can these customers Damien, customers going to on existing focused into we to get local more we engage and to continue look on. grow continue we you the will focused be – customers that’s will how Now for and

Damien Schmitz

the for thanks and question, Kedar Thanks, Trevor.

you will the in us year we goods grow those would total why key customers, transparency to we some the this customer the in accounts. local headwinds course is the local this of short-term, first further that one quarter. wanted expect in half of you. XXXX. top Note for metrics see customers And from we of over in local Omicron obviously, which is But ramps, mentioned, provide as As the is to impacting first

Trevor Young

Thanks. the this informing that XP to you How bit XP little math seeing the helpful. the on if the we gave to on EBITDA in then really a are XQ incremental That’s step-down guided really something shift. and of around a shift? down that is And that’s obviously, business Omicron continued spend the And guide, the of I what seasonality impact of know closer and EBITDA, Damien, versus kind GPs revenue and declines, to of areas any mix much breakeven? from of

Damien Schmitz

totally results, backdrop the coming fourth Yes. get Sure. here. the And in firstly of off quarter the positive question

a if seasonality back of which the unpack Omicron. is so migration bit, and the pull one-third revenue third-party. the from more around number can of business is from revenue sequential the move Two-thirds of overall And from you little goods

So, it’s mostly is an on continue Omicron story a quarter, marketplace. in transient believe this we again, first to our which

fixed As far which we associated of cloud, our other call did areas forward. structural is costs base going cost ramp the investments. at intend of really with and of we this overall, should our And kind the that no rate beyond you always cloud expenditures, OpEx grow out profiles but to as migration, planned cost the top off lower part assume run profile line

Trevor Young

helpful. to this just many a get the minority last Groupon on of And super record get has questions. liquidated so since we kind stakes. That’s of one, lot

the You up-stake your have past. some cut in

If minority comment not, what’s some or your specifically if on your plans up-stake general you towards broadly, stakes? you. philosophy these your could for Thank

Damien Schmitz

Yes.

So investment philosophically, broader create overall we evaluate long-term how we to regularly our investments portfolio, can as we do and value. our leverage with shareholder

stake of disclosures, is time. this would hold just and name our that’s do also passive a Groupon remind investment been do for you As public overall. there SumUp, great then you no the you that SumUp, for X.X% SumUp saw in at in shares recent hold it, market we a I we

Trevor Young

Great. hop back in the Thanks. queue. I will

Operator

Ng is with next of Mike the Your question Sachs. line from Goldman

Mike Ng

good Thank question. you morning. I if Two, Hey, for the could.

was doing be that could improve present areas restrictions. proactively and of refunds Thank you. low-hanging experience experience. merchant about itself just things suboptimal it the of encouraging First, level if I customer the Groupon’s focus Kedar, may to to hear wondering, like customer any similar fruit might talk as a providing improving on was about removing that experience, the you

Kedar Deshpande

Thanks Mike.

to the with on intent need better understand two merchant is coming One, a I think we are the there merchants. Groupon different platform. why things

partners. particular of we create are we sort even – these value of feedback some for those data in Unfortunately, at making working proposition understand about, or need for that points marketing inventory. or point merchants, more Groupon, are to ability example, management have from if looking acquire more them we yield we talked for have I So, they the their and on the not for were with our that going merchant the is to to customers are our the merchant capturing

So, to partners more are of more merchant we I for offer will what for information we going as data. in have our collect you terms

I right we we that are merchant sure propositions. value It’s them to what calibrate of focused time what understanding and how we have their us more complete right and information the just those the now, it’s needs go going on expectations collecting back. So, can now, through provide take am to making to for

Mike Ng

very the local quick Thank some drivers Great. much. And on little path that it just just could are might of I you Thank or you very just roadmap a bit ask modeling improvement? the you throughout reopening, things the could that that? of if much. year, there simply about Is the help talk a product improvement question, on

Kedar Deshpande

think of, growth. there different recovery, two say, just aspects are but I would I not

is expectation one us the a have for that so address. customer to we sure things of growth to And make for we happen, that to consistently focused create

customers, saving we for money or the example, are for time we consistently our that. saving do So if for to have if we are customers the

then say, if a so some very on are is under that are props. are why what other some drive value are consistent also trends, global very But growth trust what value And is well. But verticals lagging. making within which And those us. are prop, coming some current are the verticals and and will we aspects peel that’s for recovery, will those back important we and in there value that features, sure see there our the rapidly, are one And what props general, which it’s based for as that us. understanding There is geographies. you and are back is thing in

going through for particular still myself. that So, understanding

Mike Ng

on role. and the congratulations Great. new Kedar Thanks

Kedar Deshpande

Thank you.

Operator

is your from question Wedbush. And with line the Arounian Instructions] Ygal of next [Operator

Ygal Arounian

about out, like Hey, before guys a that offers, we of the the maybe removing where like to are little bit. there. you and assessing kind aboard. the Welcome I off on talk just Is to restrictions that, where would to guess team good also joined it. and drawing market-by-market, strategy just about echo going from and to did is And put about the are that morning evolving, in right, table, kind feels you taking strategy we the it back going and board trying start on congrats, Kedar. of could to one now changing I want developing step has And we thinking bridging talk growing we refining that and of back lot a there to density focus get, inventory place Maybe

Kedar Deshpande

Thanks the question, for Sure. and thank for you the congratulations.

has building in pretty last the of think team I the months the inventory. great overall job a XX So, done

doesn’t this more mean going inventory I particular we have just that much buildup think traction. will back,

this the of vertical. x this KPIs are, to to intent that what not should in as that look breadth, was and going Otherwise, sure capturing a right that sure are be customer are That opposed just I there. expects buildup it. when do Groupon, on make in number not focused density. And is location oh, getting this particular amount we particular for to of particular about of supply to have in requires density expectations customer there supply right us intentional buildup. the to have both the it kind that’s now those sort have in to thing of are we is inventory That a this providers density We consistency marketplace, each have to of byproduct something make

understanding on aspect. moment. one of the So, demand That’s focus we working need to and a are we with this great have at And supply. that

Ygal Arounian

on the you just big over in view given the way, obviously, board certain all bigger and picture ways. pretty real about, and competitive and taken you line in come have local landscape? are real in with of a those experience Okay. kind how you stuff talking time Understood. so previous as share your material Google ad Maybe competitors dollars And Facebook like in

do about as content competitive how with landscape you role those players competing this team? of think in Just you your that start

Kedar Deshpande

look great think way will with first competitors, I a I am Groupon. That’s start excited at I question. what The about to

asset we is network, frankly third our I the we which that biggest have Groupon scale. in And marketplace. global mentioned on I are have local mentioned, data front The horizontal As before. three are not then as leveraging,

advertising lot focused are But is that other be not I each that focused utility a Now for on transaction we for why of different market, a go them with have different. of different was application, and utility and but local of that’s them work it there local. on application. is is one a believe a competitors customers transaction merchants there are these you the There none that to market marketplace. versus mentioned, specifically through are actually transactions. Groupon a is meant And the marketplaces both to ability different customers our local to go a has

Ygal Arounian

guide, Got that sound I the Damien, it it confident or in And could then guys but it. you incremental good there. investment, nothing highlighted for year as more. ask XQ if will as the full And the be mentioned pretty one cloud EBITDA kind in of EBITDA was XXXX. at you least

go investment now? levels to the also strategy there isn’t reassess to where beginning product. Thanks are the and where to of And put platform, place that improve you and just the to the get refine kind confidence You need this want guys. at plan what to do of to you kind there see of – need incremental of to right that what gives you you the in

Damien Schmitz

levels, both into of The on EBITDA that full initial with the America mainly Ygal. out Thanks about that But the top in I year. trajectory, we investment of bottom going year ramping thinking said of our Q&A running that get wanted reflection I off are have at a we really that believe line we here have baseline are in before and initial is perspective said grow growth, we can want for international year the and as a question, we – to is view don’t given lower we kind kind we we how communicate profile throughout remarks, think local of have North line that consistently in that that the and of I shared base ramping but right the now. before, cost firmly we of SG&A performance one And as forward. fixed our earlier we much

You those will really incremental see within our of be And really kind investment of investments in portfolio. any any instead, totality. existing shouldn’t rebalancing

Ygal Arounian

Alright. Great. Thanks for the all color.

Operator

Trevor Young from line follow-up of question a with Barclays. the have We

Trevor Young

your just back to spend Great. the ad willingness organic demand in What to to before add you your factors Thanks. in you view, gating is comments at made in least as what’s that Kedar, from lean on there that the kind of prepared on? will, some spark, the demand like organic extent remarks or the if to coming about initially are the Thanks. one to fuel two fire. you or keeping

Kedar Deshpande

vertical important sorry, see, getting replicate sort take traffic the for other particular that into, we is are look Thanks hey, these there technological particular to verticals are can across can that’s Organic particular always customers, not demand demand signals the way. is happening. is understanding back. to we customers, and advantage which then organic not undercurrent the for general, the we across what on that’s organic What is is if best across that. that And – of organic to question, our different is that cases, in marketplace different verifying Today, comes board. demand, seeing geographies, particular not And providing other demand what and of to to are might the look things we out we context are geographies our the the which that to in in – make the Trevor. me we find demand more showcasing what is for sure customers even the that, why go and at getting be some geography actually sort hey, experience back, of there back themes,

Trevor Young

Thank Right. you.

Operator

today’s This concludes conference call.

disconnect. now may You

Groupon (GRPN) 1 Mar 222021 Q4 Earnings call transcript