Deals

Groupon rebounds with $559M in Q1 revenue

groupon
Image Credit: Flickr

Still reeling from a disastrous fourth quarter, Groupon beat Wall Street’s expectations and reported $559.3 million in revenue and $39.6 million in operating income for the first quarter of 2012. Monday’s earnings report is Groupon’s second since opening on the NASDAQ in November.

The company, which now has 36.9 million active customers, reported earnings Monday after market close and said that revenue increased 89 percent year-over-year. The company’s operating income of $39.6 million compares with a $117.1 million operations loss in the first quarter 2011. Groupon also reported gross billings, or the total collected from sold Groupons, of $1.35 billion for the quarter, which is more than double its gross billings of $668.2 million for the same period last year.

“We are pleased to report a record quarter that demonstrates our progress in unlocking the opportunity in local commerce for merchants and customers worldwide,” CEO Andrew Mason said in a statement.

The company performed especially well in Q1 in North America, where revenue grew 75 percent year-over-year. Groupon, Mason said in a call with investors, was able to leverage “smart deals” technology to provide better targeting and deliver performance improvements in North America. The personalization technology is in the process of being rolled out to international markets, Mason said.

Groupon said it served a total of 100,000 unique merchants in the first quarter and surpassed 1.5 million Groupons sold via Groupon Now during the quarter.

Analysts predicted a strong quarter for the deals company and pegged revenue at $530 million and operating profit, or earnings after operating costs, at $32.7 million. Groupon beat their estimates, and the company’s net loss for the quarter improved to $11.7 million (from $146.5 million in Q1 2011), or a loss of $0.02 per share.

In late March, Groupon revised its fourth quarter earnings to report revenue of $492.2 million (down $14.3 million from its original report) and an operating loss of $15 million for the quarter. Wall Street was stunned by the news and punished the company with a downward spiraling market capitalization. Groupon said at the time that it still anticipated pulling in between $510 million and $550 million during the first quarter of 2012.

Last week, Groupon made its punchcard-alternative Groupon Rewards loyalty program available to all U.S. businesses. Mason has touted the program, previously piloted in Philadelphia, as one of four key initiatives that will transform the deals giant into an “operating system for local commerce.”

Valued as high as $17.8 billion on its first day of trading, Groupon’s market capitalization plummeted to around $6 billion in recent weeks but has today jumped back into the $7 billion to $8 billion range. The stock got off to a strong start Monday morning and was trading up as high as 20 percent in anticipation of today’s earnings report. Shares are up more than 13 percent in after-hours trading at the time of this report.

Groupon said revenue for the second quarter of 2012 is expected to be between $550 million and $590 million, and operating income should be between $25 million and $45 million.

For a look at how Groupon’s stock compares with Yelp and Pandora, two other consumer internet companies that recently went public, have a look at the chart below.

GRPN Chart

GRPN data by YCharts

Photo credit: swanksalot/Flickr