Groupon’s Revenue Measure Shrinks More Than 50%

About a month ago, I remarked on Groupon’s explosive revenue growth (and its equally impressive cost growth).

The company revised its financial results yesterday, and the revenue picture looks less explosive. In the latest update of its S-1 registration statement, Groupon reported $393 million in Q2 revenues. That’s a remarkable figure for such a young company but a far cry from the $878 million it previously reported.

And what happened to the almost $400 million in missing revenue? That money–payments to the merchants who provide goods and services for Groupons–is now subtracted before reporting revenue rather than deducted after as an expense. In short, Groupon went from a gross measure of revenue to a net one.

The bad news for Groupon is that the new presentation makes the company appear less than half as big as it did previously. The good news, I suppose, is that its expenses went down by the same amount.

Groupon’s effort to go public has been one of the bumpier ones in recent memory. Its first filing emphasized a profit measure, essentially profits before less marketing expenses, that was widely ridiculed. That got dropped in the second draft. And now a gigantic restatement of revenue in the third draft. Not to mention, the company’s recent difficulties with the SEC’s quiet period requirements.

3 thoughts on “Groupon’s Revenue Measure Shrinks More Than 50%”

  1. I think you meant “profits BEFORE marketing expenses”. The real issue for Groupon is that they haven’t demonstrated scale for repeat purchases: There are plenty of first time impulse buyers of “good deals”, but customers won’t buy again when they still haven’t gotten around to using the last one they bought.

  2. I’m not sure where you’re getting your information, but good topic. I needs to spend some time learning more or understanding more. Thanks for fantastic info I was looking for this info for my mission.

Comments are closed.