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Posts Tagged ‘Groupon’

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.

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Daily deal leader Groupon continues to grow its revenues at a jaw-dropping pace. According to its updated S-1 filing, the company sold $878 million in Groupons in the second quarter, ten times more than a year earlier:

However, costs have been exploding too. Groupon spent almost $1 billion in Q2:

Put it all together, and Groupon has been losing hundreds of millions of dollars:

Small compared to the billions and trillions of red ink the federal government confronts, but still a formidable problem. Particularly given all the other players in this space, including a certain search company whose $6 billion acquisition offer Groupon spurned last year. I would have taken the money and run. But perhaps I am not seeing the secret ingredient that will give Groupon a persistent competitive advantage in the face of vigorous competition.

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We’ve all heard the rumors that Groupon is the fastest growing company ever. Today it finally opened its books in its preliminary filing to go public.

Wow.

In the first quarter of 2009, the online deal company mustered only a quarter of million in revenue. In the first quarter of 2011, it brought in almost $650 million.

Wow.

Only slightly less wow, by the way, is the fact that Groupon lost $103 million in the first quarter. Marketing and SG&A are expensive.

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